Exhibit(d)(17)
The Prudential Series Fund, Inc.
Value Portfolio
Subadvisory Agreement
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Agreement made as of this 1/st/ day of February, 2001 between Prudential
Investments Fund Management LLC (PIFM or the Manager) and Deutsche Asset
Management Inc. (the Subadviser or Deutsche).
WHEREAS, the Manager has entered into a Management Agreement, dated
September 7, 2000 (the Management Agreement), with The Prudential Series Fund,
Inc. (the Fund), a diversified, open-end management investment company
registered under the Investment Company Act of 0000 (xxx 0000 Xxx), pursuant to
which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto (individually and collectively, with the Fund, referred to
herein as the Fund) and to manage such portion of the Fund as the Manager shall
from time to time direct, and the Subadviser is willing to render such
investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors of the Fund, the Subadviser shall manage such portion of the
investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus(es) (such
Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of
the Fund's investments as the Manager shall direct and shall determine
from time to time what investments and securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the assets
will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Manager and of the Board of
Directors of the Fund, co-operate with the Manager's (or its
designee's) personnel responsible for monitoring the Fund's compliance
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986 and all other applicable federal and
state laws and regulations. In connection therewith, the Subadviser
shall, among
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other things, prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(iii) The Subadviser shall determine the securities and futures contracts
to be purchased or sold by such portion of each Fund's series, as applicable,
and will place orders with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to Prudential Securities
Incorporated or any broker or dealer affiliated with the Subadviser) to carry
out the policy with respect to brokerage as set forth in the Fund's Prospectus
or as the Board of Directors may direct from time to time. In providing the Fund
with investment supervision, it is recognized that the Subadviser will give
primary consideration to securing the most favorable price and efficient
execution. Within the framework of this policy, the Subadviser may consider the
financial responsibility, research and investment information and other services
provided by brokers, dealers or futures commission merchants who may effect or
be a party to any such transaction or other transactions to which the
Subadviser's other clients may be a party. It is understood that Prudential
Securities Incorporated (or any broker or dealer affiliated with the Subadviser)
may be used as principal broker for securities transactions, but that no formula
has been adopted for allocation of the Fund's investment transaction business.
It is also understood that it is desirable for the Fund that the Subadviser have
access to supplemental investment and market research and security and economic
analysis provided by brokers or futures commission merchants who may execute
brokerage transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and efficient execution. Therefore, the Subadviser is authorized to place
orders for the purchase and sale of securities and futures contracts for the
Fund with such brokers or futures commission merchants, subject to review by the
Fund's Board of Directors from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers or futures commission merchants may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of a security
or futures contract to be in the best interest of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by applicable
laws and regulations, may, but shall be under no obligation to, aggregate the
securities or futures contracts to be sold or purchased in order to obtain the
most favorable price or lower brokerage commissions and efficient execution. In
such event, allocation of the securities or futures contracts so purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with respect to
the Fund's portfolio transactions required by subparagraphs (b)(5), (6), (7),
(9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act, and shall
render to
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the Fund's Board of Directors such periodic and special reports as the Directors
may reasonably request. The Subadviser shall make reasonably available its
employees and officers for consultation with any of the Directors or officers or
employees of the Fund with respect to any matter discussed herein, including,
without limitation, the valuation of the Fund's securities.
(v) The Subadviser shall provide the Fund's Custodian on each business day
with information relating to all transactions concerning the portion of the
Fund's assets it manages, and shall provide the Manager with such information
upon request of the Manager.
(vi) The investment management services provided by the Subadviser
hereunder are not to be deemed exclusive, and the Subadviser shall be free to
render similar services to others. Conversely, Subadviser and Manager understand
and agree that if the Manager manages the Fund in a "manager-of-managers" style,
the Manager will, among other things, (i) continually evaluate the performance
of the Subadviser through quantitative and qualitative analysis and
consultations with such Subadviser (ii) periodically make recommendations to the
Fund's Board as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to the Fund's
Board regarding the results of its evaluation and monitoring functions.
Subadviser recognizes that its services may be terminated or modified pursuant
to this process.
b) The Subadviser shall authorize and permit any of its directors, officers
and employees who may be elected as Directors or officers of the Fund to serve
in the capacities in which they are elected. Services to be furnished by the
Subadviser under this Agreement may be furnished through the medium of any of
such Directors, officers or employees.
(c) The Subadviser shall keep the Fund's books and records required to be
maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely
furnish to the Manager all information relating to the Subadviser's services
hereunder needed by the Manager to keep the other books and records of the
Series required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that all
records which it maintains for the Series are the property of the Fund, and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund's request, provided, however, that the Subadviser may retain a copy of such
records. The Subadviser further agrees to preserve for the periods prescribed by
Rule 31a-2 of the Commission under the 1940 Act any such records as are required
to be maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures to ensure
its compliance with the 1940 Act, the Investment Advisers Act of 1940 and other
applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records prepared
in connection with (i) the performance of this Agreement and (ii) the
maintenance of
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compliance procedures pursuant to paragraph 1(d) hereof as the Manager may
reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement.
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation
therefor, a fee equal to the percentage of the Fund's average daily net
assets of the portion of the Fund managed by the Subadviser as described in
the attached Schedule A.
4. The Subadviser shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Manager in connection with the matters to
which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Subadviser's part in the
performance of its duties or from its reckless disregard of its obligations
and duties under this Agreement.
5. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940
Act; provided, however, that this Agreement may be terminated by the Fund
at any time, without the payment of any penalty, by the Board of Directors
of the Fund or by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of the Fund, or by the Manager or the
Subadviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment
(as defined in the 0000 Xxx) or upon the termination of the Management
Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Subadviser's directors, officers or employees who may also be a
Director, officer or employee of the Fund to engage in any other business
or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or a dissimilar nature,
nor limit or restrict the Subadviser's right to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
7. During the term of this Agreement, the Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Fund or the public, which refer to the
Subadviser in any way, prior to use thereof and not to use material if the
Subadviser reasonably objects in writing five business days (or such other
time as may be mutually agreed) after receipt thereof. Sales literature may
be furnished to the Subadviser hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery.
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8. This Agreement may be amended by mutual consent, but the consent of
the Fund must be obtained in conformity with the requirements of the 1940
Act.
9. This Agreement shall be governed by the laws of the State of New
York.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
BY: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Executive Vice President
DEUTSCHE ASSET MANAGEMENT INC.
BY: /s/ Xxxxxxx Xxxxxxxx
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Schedule A
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As compensation for Deutsche's services, PIFM will pay Deutsche a fee equal, on
an annualized basis, to the following:
0.29 of 1% on the first $50 million of the average net assets under Deutsche's
management, and
0.23 of 1% on the next $250 million of the average net assets under Deutsche's
management, and
0.15 of 1% over $300 million under Deutsche's management.
For purposes of computing the fees set out above, PIFM will aggregate the assets
of The Prudential Series Fund, Inc. - Prudential Value Portfolio and Prudential
Value Fund under Deutsche's management. The parties may aggregate the assets of
other Prudential mutual fund portfolios which XxXX may subadvise in the future
with the portfolios described above by amending this Schedule A.
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