Exhibit-99.(d)(2)(ii)
SUBADVISORY AGREEMENT
Agreement made as of this 24th day of July, 2003 between Prudential
Investments LLC (PI or the Manager), a New York limited liability company, and
Westcap Investors, LLC (Westcap or the Subadviser).
WHEREAS, the Manager has entered into separate Management Agreements (each,
a Management Agreement) (i) dated August 25, 1999, with Strategic Partners Style
Specific Funds and (ii) dated November 9, 1992, with The Target Portfolio Trust
(together with Strategic Partners Style Speciifc Funds, the Trusts). Each Trust
is a Delaware statutory trust and a diversified, open-end management investment
company registered under the Investment Company Act of 1940 as amended (the 1940
Act). Under each Management Agreement, PI acts as Manager of the Trusts; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment
advisory services to each Trust and one or more of each Trust's respective
series as specified in Schedule A hereto (individually and collectively, with
the Trusts, 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
Trustees of the Fund, the Subadviser shall manage such portion of the
Fund's portfolio, including the purchase, retention and disposition
thereof, in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Prospectus (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 copies
of the Declaration of Trust, By-Laws and Prospectus of the Fund
provided to it by the Manager (the Fund Documents) and with the
instructions and directions of the Manager and of the Board of
Trustees 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,
as amended, and all other applicable federal and state laws and
regulations. In connection therewith, the Subadviser shall, among
other things, prepare and file such reports as are, or may in the
future be, required by the Securities and Exchange Commission (the
Commission). The Manager shall provide Subadviser timely with copies
of any updated Fund documents.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by such portion of the Fund's
portfolio, 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 Trustees 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. The Manager (or Subadviser) to the Fund each
shall have discretion to effect investment transactions for the Fund
through broker-dealers (including, to the extent legally permissible,
broker-dealers affiliated with the Subadviser(s)) qualified to obtain
best execution of such transactions who provide brokerage and/or
research services, as such services are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Fund to pay any such broker-dealers an amount of
commission for effecting a portfolio transaction in excess of the
amount of commission another broker-dealer would have charged for
effecting that transaction, if the brokerage or research services
provided by such broker-dealer, viewed in light of either that
particular investment transaction or the overall responsibilities of
the Manager (or the Subadviser) with respect to the Fund and other
accounts as to which they or it may exercise investment discretion (as
such term is defined in Section 3(a)(35) of the 1934 Act), are
reasonable in relation to the amount of commission..
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 effected by it as
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
the Fund's Board of Trustees such periodic and special reports as the
Trustees may reasonably request. The Subadviser shall make reasonably
available its employees and officers for consultation with any of the
Trustees 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 or its affiliate 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. The Subadviser
recognizes that its services may be terminated or modified pursuant to
this process.
(vii) The Subadviser acknowledges that the Manager and the Fund
intend to rely on Rule 17a-10 under the 1940 Act, and the Subadviser
hereby agrees that it shall not consult with any other subadviser to
the Fund with respect to transactions in securities for the Fund's
portfolio or any other transactions of Fund assets.
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Trustees 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 Fund required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records which it maintains for the Fund 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) In connection with its duties under this Agreement, the Subadviser
agrees to maintain adequate compliance procedures to ensure its compliance
with the 1940 Act, the Investment Advisers Act of 1940, as amended, 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 compliance procedures pursuant to paragraph 1(d) hereof
as the Manager may reasonably request.
(f) The Subadviser shall be responsible for the voting of all shareholder
proxies with respect to the investments and securities held in the Fund's
portfolio, subject to such reporting and other requirements as shall be
established by the Manager.
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. The Manager shall provide (or
cause the Fund's custodian to provide) timely information to the Subadviser
regarding such matters as the composition of assets in the portion of the Fund
managed by the Subadviser, cash requirements and cash available for investment
in such portion of the Fund, and all other information as may be reasonably
necessary for the Subadviser to perform its duties hereunder (including any
excerpts of minutes of meetings of the Board of Trustees of the Fund that affect
the duties of the Subadviser).
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. Liability for payment of compensation by the Manager to the
Subadviser under this Agreement is
contingent upon the Manager's receipt of payment from the Fund for management
services described under the Management Agreement between the Fund and the
Manager. Expense caps or fee waivers for the Fund that may be agreed to by the
Manager, but not agreed to by the Subadviser, shall not cause a reduction in the
amount of the payment to the Subadviser by the Manager.
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, provided, however, that nothing in this Agreement shall be deemed to
waive any rights the Manager or the Fund may have against the Subadviser under
federal or state securities laws. The Manager shall indemnify the Subadviser,
its affiliated persons, its officers, directors and employees, for any liability
and expenses, including attorneys fees, which may be sustained as a result of
the Manager's willful misfeasance, bad faith, gross negligence, reckless
disregard of its duties hereunder or violation of applicable law, including,
without limitation, the 1940 Act and federal and state securities laws. The
Subadviser shall indemnify the Manager, its affiliated persons, its officers,
directors and employees, for any liability and expenses, including attorneys'
fees, which may be sustained as a result of the Subadviser's willful
misfeasance, bad faith, gross negligence, reckless disregard of its duties
hereunder or violation of applicable law, including, without limitation, the
1940 Act and federal and state securities laws.
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 Trustees of the Fund
or by vote of a majority of the outstanding voting securities (as defined in the
▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) or upon the
termination of the Management Agreement. The Subadviser agrees that it will
promptly notify the Fund and the Manager of the occurrence or anticipated
occurrence of any event that would result in the assignment (as defined in the
▇▇▇▇ ▇▇▇) of this Agreement, including, but not limited to, a change or
anticipated change in control (as defined in the ▇▇▇▇ ▇▇▇) of the Subadviser;
provided that the Subadviser need not provide notice of such an anticipated
event before the anticipated event is a matter of public record.
Any notice or other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (1) to the Manager at Gateway Center Three, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Secretary; (2) to the Fund
at Gateway Center Three, 4th Floor, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Secretary; or (3) to the
Subadviser at __________________.
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 Trustee,
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.
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.
10. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act, shall be resolved by reference to such term or provision of the
1940 Act and to interpretations thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the Commission issued pursuant to the 1940 Act. In
addition, where the effect of a requirement of the 1940 Act, reflected in any
provision of this Agreement, is related by rules, regulation or order of the
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
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 LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: EVP & CAO
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WESTCAP INVESTORS, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
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SCHEDULE A
As compensation for services provided by Westcap Investors LLC, Prudential
Investments LLC (PI) will pay Westcap Investors, LLC a fee equal, on an
annualized basis, pursuant to the following schedule:
ANNUAL FEE
FUND/SERIES: (AS A % OF AVERAGE NET ASSETS):
Strategic Partners Style Specific Funds
Strategic Partners Small Capitalization
Growth Fund 0.50%
The Target Portfolio Trust
Small Capitalization Growth Portfolio 0.50%
Dated as of July 24, 2003.
