THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of the ____ day of ____________, 2000, between Prudential
Investments Fund Management LLC (the "Manager"), and Massachusetts Financial
Services Company (the "Adviser") a corporation organized under the laws of the
State of Delaware.
WHEREAS, the Manager will enter into a management agreement (the
"Management Agreement") with The Prudential Series Fund, Inc. (the "Fund"), a
Maryland corporation and a diversified open-end management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"), pursuant
to which the Manager will act as manager of the Fund.
WHEREAS, shares of the Fund are divided into separate series or
portfolios, each of which is established pursuant to a resolution of the
Directors of the Fund, and the Directors may from time to time terminate such
portfolios or establish and terminate additional portfolios.
WHEREAS, the Manager desires to retain the Adviser to provide investment
advisory services to the portfolios of the Fund identified in Exhibit A attached
hereto (the "Portfolios") in connection with the management of the Fund and to
manage such portion of the Portfolios as the Manager shall from time to time
direct, and the Adviser is willing to render such investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
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1. (a) Subject to the supervision of the Manager and of the
Directors of the Fund, the Adviser shall manage investment operations of
the Portfolios as the Manager shall direct. Such supervision, however,
shall not require prior approval of discretionary investment decisions
made by the Adviser except as may be required by applicable law, the
Portfolios' investment policies and restrictions and/or any limitations
imposed on the Adviser by the Directors of the Fund and/or the Manager
pursuant to paragraph (ii) below. The Adviser shall manage the composition
of the Portfolios, including the purchase, retention and disposition
thereof, in accordance with the Portfolios' 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")
relating to the Portfolios contained in the Fund's registration statement
under the 1940 Act and the Securities Act of 1933, as amended, subject to
the following understandings:
(i) The Adviser shall provide supervision of the Portfolios'
investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Portfolios,
and what portion of the assets it manages will be invested or held
uninvested as cash. The Adviser is hereby authorized, for and on behalf of
the Fund, with respect to the Portfolios, in its discretion to determine
how to vote all proxies received with respect to securities held in the
Portfolios and direct the Custodian as to the voting of such proxies.
(ii) In the performance of its duties and obligations under this
Agreement, the Adviser shall act in conformity with applicable law, this
Agreement, the Articles of Incorporation, By-Laws and Prospectus of the
Fund and the Portfolios and with the written instructions and directions
of the Manager and of the Directors of the Fund, and will conform to and
comply with the requirements of
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the 1940 Act, section 817(h) and Subchapter M of the Internal Revenue Code
of 1986, as amended, and all other applicable federal and state laws and
regulations. The Manager agrees to provide promptly to the Adviser a copy
of the documents mentioned above and all changes made to such documents,
together with a list of companies the securities of which are not to be
bought or sold for the Portfolios (such list shall include each security
name, cusip number, sedol and/or applicable ticker) and a list of
affiliated brokers and underwriters for reporting transactions under
applicable provisions of the 1940 Act. These documents and any amendments
thereto shall not be deemed effective with respect to the Adviser until
three business days after the Adviser's receipt thereof.
(iii) The Adviser shall determine the securities, futures,
commodities or other assets to be purchased or sold by the Portfolio, and
will place orders pursuant to its determination with or through such
persons, brokers, dealers or futures commission merchants (including but
not limited to Prudential Securities Incorporated) in compliance with
applicable law. In providing the Portfolio with investment supervision, it
is recognized that the Adviser will seek best price and execution. Within
the framework of this policy, the Adviser 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 Adviser's other clients may be a party. It is understood that
Prudential Securities Incorporated may be used as broker for securities
transactions but that no formula has been adopted for allocation of the
Portfolios' investment transaction business. It is also understood that it
is desirable for the Fund that the Adviser 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
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allocating brokerage to other brokers on the basis of seeking the most
favorable price and best execution. Therefore, the Adviser is authorized
to place orders for the purchase and sale of securities and commodities or
other assets for the Portfolios with such brokers or futures commission
merchants, subject to review by the 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 Adviser in connection with the Adviser's services to
other clients.
On occasions when the Adviser deems the purchase or sale of a
security, commodity or other asset to be in the best interest of the
Portfolios as well as other clients of the Adviser, the Adviser, to the
extent permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities, commodities or other
assets to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and best execution. In such event,
allocation of the securities, commodities or other assets so purchased or
sold, as well as the expenses incurred in the transaction, will be made by
the Adviser in the manner the Adviser considers to be the most equitable
and consistent with its fiduciary obligations to the Fund and to such
other clients.
(iv) In providing the services to be rendered by it hereunder, the
Adviser shall maintain all books and records with respect to the 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 the Directors such periodic and special reports as the Board may
reasonably request.
(v) The Adviser shall provide the Fund's custodian (the "Custodian")
on each business day with information relating to all transactions
concerning the Portfolio's assets it manages and shall provide the Manager
with such information upon request of the Manager. The Adviser shall
reconcile its records of the
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Portfolio's securities and cash managed by the Adviser with statements
provided by the Custodian at least once each month. The Adviser shall
provide the Manager with a written report on each such reconciliation,
including information on any material discrepancies noted and actions
taken by the Adviser in response thereto, within five (5) days after
receipt of the Custodian bank report.
(vi) The investment management services provided by the Adviser
hereunder are not exclusive, and the Adviser shall be free to render
similar services to others.
(b) Services to be furnished by the Adviser under this Agreement may
be furnished through the medium of any of its partners, officers or employees.
(c) The Adviser shall keep the Portfolios' books and records
required to be maintained by the Adviser pursuant to paragraph 1(a)(iv) hereof
and shall timely furnish to the Manager all information relating to the
Adviser'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 Adviser
agrees that all records which it maintains for the Portfolios are the property
of the Fund, and following termination of this Agreement, will be surrendered
promptly to the Fund upon the Fund's request, provided that the Adviser may keep
copies of these records. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are required to
be maintained by it pursuant to paragraph 1(a) hereof.
(d) The Adviser agrees to maintain adequate compliance procedures to
ensure its compliance with the Investment Advisers Act of 1940 ("Advisers Act")
and other applicable state and federal laws and regulations.
(e) The Adviser shall furnish to the Manager, within 15 days after
the end of each calendar quarter, a report detailing (i) the average annual
total return of each Portfolio for the preceding quarter and for the preceding
1, 5 and 10 year periods (the
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"Portfolio Return"); and (ii) a comparison of the Portfolio Return with the
return of an appropriate securities index and with an appropriate mutual fund
peer group.
(f) At least once annually, the Adviser, at its expense, shall
require those of its personnel who are primarily responsible for managing each
Portfolio to make a presentation at such regular or special meeting of the
Fund's Board that the Fund may convene.
2. The Manager acknowledges that the Adviser is not the compliance agent
for the Fund or for the Portfolios, and does not have all of the books and
records necessary to perform certain compliance testing. The Adviser shall
perform such compliance testing as it deems reasonable based upon its books and
records with respect to the Portfolios and shall certify compliance to the
Manager accordingly. The Manager shall continue to have responsibility for all
services to be provided to the Portfolios pursuant to the Management Agreement,
and shall oversee and review the Adviser's performance of its duties under this
Agreement.
3. The Manager shall compensate the Adviser for the services provided and
the expenses assumed pursuant to this Subadvisory Agreement at the annual rate
for each Portfolio managed by the Adviser as set forth in Exhibit A attached
hereto. This fee will be computed daily and paid quarterly. The quarterly
management fee will be paid to the Adviser not later than the tenth business day
of the quarter following the quarter in which such services were rendered, and
will be based upon the average net asset values of all the issued and
outstanding shares of the Portfolios as determined as of the close of each
calendar day of the quarter pursuant to the Articles of Incorporation, By laws,
and currently effective Prospectus of the Portfolios. Payments of the quarterly
management fee will be accompanied by documentation that verifies the
calculation of such fee. If the management of the Portfolios by the Adviser
commences or terminates at any time other than the beginning or end of a
quarter, the management fee will be prorated for that portion of such quarter
during which this Agreement was in force.
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4. The Adviser, its affiliated firms or their employees, officers, or
directors, shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Portfolios, their shareholders, 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 their
part in the performance of their duties or from reckless disregard of their
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 Directors or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Portfolio, or by the Manager or the Adviser 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. Adviser shall promptly notify Manager in the event that
there is a change in the ownership of Adviser that may constitute an assignment
of this Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Adviser's partners, officers or employees 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 dissimilar nature, nor limit
the Adviser'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
Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared
for distribution to
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shareholders of the Fund or the public, which refer to the Adviser
in any way; provided, however, that any such item which describes or
characterizes the Adviser's investment process with respect to a
Portfolio, the names of any of its clients (other than the Fund or
advisory clients of the Manager and its affiliates) or any of its
performance results shall be furnished to the Adviser by first class
or overnight mail, facsimile transmission equipment or hand delivery
prior to use thereof, and such item shall not be used if the Adviser
reasonably objects to such use in writing within seventy-two (72)
hours (or such other time as may be mutually agreed) after receipt
thereof (provided, however, that if such item is not received by the
Adviser during normal business hours on a business day, such period
shall end seventy-two (72) hours after the start of normal business
hours on the next succeeding business day).
8. The Fund and the Manager agree that all information which has or
will come into their possession or knowledge concerning the
operations and procedures of the Adviser shall be held by the Fund
and the Manager in confidence. The Fund and the Manager shall make
no use of such information other than for the performance of this
Agreement, shall disclose such information only to their directors,
officers, or employees or those of their affiliated firms and shall
not disclose such information to any other person without the
written consent of the Adviser. The Manager and the Fund agree not
to refer to any designation comprised in whole or in part of the
names or marks "Massachusetts Financial Services Company," "MFS
Investment Management" or "MFS" or any other trademark relating to
MFS in any advertisement or other document without the prior consent
of the Adviser. Similarly, the Adviser and its affiliates shall not
refer to the Manager, the Fund, the Portfolios, or other Prudential
affiliates in any advertisement or
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other document without the Manager's prior written consent. Upon
termination of this Agreement, each party shall cease all use of any
such name or xxxx as soon as reasonably practicable.
9. Any written notice required by or pertaining to this Agreement shall be
personally delivered to the party for whom it is intended, at the address stated
below, or shall be sent to such party by prepaid first class mail or facsimile.
If to Prudential: The Prudential Series Fund Inc.
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: General Counsel
If to the Adviser: Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax # (000) 000-0000
Attention: Legal Department
10. 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.
11. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS.
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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________________________________
Name:
Title:
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By________________________________
Name:
Title:
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EXHIBIT A
SERIES OF THE PRUDENTIAL SERIES FUND, INC. TO BE MANAGED BY
THE ADVISER, AND SUB-ADVISORY FEES
SERIES:
-------
SP MFS Capital Opportunities Portfolio and SP MFS Mid Cap Growth Portfolio
SUB-ADVISORY ANNUAL FEES AS A % OF AVERAGE DAILY NET ASSETS:
------------------------------------------------------------
0.400% on the first $300 million
0.375% on the next $300 million
0.350% on the next $300 million
0.325% on the next $600 million
0.250% over $1.5 billion
