EXHIBIT 99.(d)(xi)
STRATEGIC PARTNERS STYLE SPECIFIC FUNDS
THE TARGET PORTFOLIO TRUST
Subadvisory Agreement
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Agreement made as of this 2nd day of October, 2003 between Prudential
Investments LLC (PI or the Manager), a New York limited liability company, and
RS Investment Management, L.P. (RS Investments or the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement (each, a
Management Agreement) (i) dated August 25, 1999, with Strategic Partners Style
Specific Funds and (ii) dated as of November 9, 1992, as amended, with The
Target Portfolio Trust (the Trusts). Each of the Trusts 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), pursuant to which
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 each 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 and delivered to the
subadvisor by the Manager, 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 written 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 of it by the Securities and Exchange Commission
(the Commission). The Manager shall provide Subadviser
timely with copies of any updated Fund documents.
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 Wachovia
Securities LLC (or any broker or dealer affiliated with the
Subadviser) in accordance with 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. The
subadvisor agrees that in placing such orders for a Fund it
shall attempt to obtain best execution, provided that, the
Subadvisor may, on behalf of such Fund, pay brokerage
commissions to a broker which provides brokerage and
research services to the Subadvisor in excess of the amount
another broker would have charged for effecting the
transaction, provided (i) the Subadvisor determines in good
faith that the amount is reasonable in relation to the value
of the brokerage and research services provided by the
executing broker in terms of the particular transaction or
in terms of the subadvisor's overall responsibilities with
respect to such Fund and the accounts as to which the
Subadvisor exercises investment discretion, and in the
opinion of the Subadvisor, the total commissions paid by
such Fund will be reasonable in relation to the benefits to
the Fund over the long term. It is understood that Wachovia
Securities LLC (or any xxxxxx 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 borkers 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 a manner the Subadviser considers
to be the most equitable over the long 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 for the Fund in securities or other 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.
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 requested 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
1940 Act) 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 1940 Act) 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
1940 Act) of this Agreement, including, but not limited to, a change or
anticipated change in control (as
defined in the 1940 Act) 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, 000 Xxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000-0000, Attention: Secretary; (2) to the Fund
at Gateway Center Three, 4th Floor, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000,
Attention: Secretary; or (3) to the Subadviser at 000 Xxxxxx Xxxxxx, Xxx
Xxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxx.
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/Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Executive Vice President
RS INVESTMENT MANAGEMENT, L.P.
By: /s/Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: Chief Financial Officer
SCHEDULE A
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As compensation for services provided by RS Investment Management, L.P.,
Prudential Investments LLC will pay RS Investment Management, L.P. a monthly fee
equal, on an annualized basis, pursuant to the following schedule:
FUND/SERIES: ANNUAL FEE (AS A % OF AVERAGE NET ASSETS):
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Strategic Partners Style Specific Funds 0.50% of the average daily net assets of the portion of
Strategic Partners Small each Fund subadvised by RS Investment Management, LP up
Capitalization Growth Fund to $150 million in assets, and 0.45% of the average
daily net assets of the portion of the Fund subadvised
The Target Portfolio Trust by RS Investment Management, LP on all assets in excess
Small Capitalization Growth of $150 million.
Portfolio
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For purposes of the fee calculation, the assets of the Funds subadvised by RS
Investment Management, LP shall be aggregated, and combined with all other funds
managed by PI for which RS Investment Management, LP serves as a subadviser.
Dated as of October 2, 2003.
