PRUDENTIAL PACIFIC GROWTH FUND, INC.
INTERIM SUBADVISORY AGREEMENT
Agreement made as of this 2nd day of October, 2000 between
Prudential Investments Fund Management LLC (the Manager) and Xxxxxxxx
Associates LLC (the Subadviser or Xxxxxxxx).
WHEREAS, the Manager has entered into a Management Agreement, dated
July 16, 1992 (the Management Agreement), with Prudential Pacific Growth
Fund, Inc. (the Fund), a diversified, open-end management investment company
registered under the Investment Company Act of 0000 (xxx 0000 Xxx); and
WHEREAS, The Prudential Investment Corporation (PIC) has provided
subadvisory services to the Fund under a Subadvisory Agreement dated July 16,
1992 with PIFM, as amended January 1, 2000; and
WHEREAS, certain investment advisory responsibilities are being
transitioned from PIC to Xxxxxxxx; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund, and the Subadviser is willing to render such
investment advisory services; and
WHEREAS, this Agreement is intended to supersede the Subadvisory
Agreement, dated July 16, 1992, between the Manager and PIC with respect to
the Fund.
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 the investment
operations of the Fund and the composition 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 and Statement of Investment
Information (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:
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(i) The Subadviser shall provide supervision of the
Fund's investments and 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, 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 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 the Fund, and
will place orders with or through such persons, brokers,
dealers or futures commission merchants (including but not
limited to Prudential Securities Incorporated) 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 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
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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 the Fund's Board of Directors such periodic
and special reports as the Board of Directors may reasonably
request. The Subadviser shall make reasonably available its
employees and officers for consultation with any of the
Board's members 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 Fund's assets, 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.
(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
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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 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 compliance procedures pursuant to paragraph
(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. The Manager shall pay the Subadviser for the services described in
paragraph 1 hereof as full compensation therefor, a fee equal to an
annual rate of the average daily net assets of the Fund under the
management of the Subadviser as described in the attached Schedule A.
The compensation earned by the Subadviser under this
Agreement shall be held in an interest-bearing escrow account with
the Fund's custodian or a bank. If a majority of the Fund's
outstanding voting securities approve an agreement with the
Subadviser by the end of the 150-day period beginning with the
effective date of this Agreement, the amount in the escrow account
(including interest earned) shall be paid to the Subadviser. If a
majority of the Fund's outstanding voting securities do not approve
an agreement with the Subadviser by the end of the 150-day period
beginning with the effective date of this Agreement, the Subadviser
shall be paid, out of the escrow account, the lesser of (i) any costs
incurred by the Subadviser in performing this Agreement (plus
interest earned on that amount while in escrow); or (ii) the total
amount in the escrow account (including interest earned).
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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 up to 150
days from the date hereof until an agreement with the Subadviser is
approved by a majority of the Fund's outstanding voting securities;
provided, however, that this Agreement may be terminated by the Board
of Directors of the Fund or a majority of the Fund's outstanding
voting securities on not more than 10 days written notice to the
Manager and the Subadviser. 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/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.
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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: /s/ Xxxxxx X. Xxxxx
--------------------------------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
XXXXXXXX ASSOCIATES LLC
BY: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxx
Senior Vice President
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SCHEDULE A
This fee schedule is applicable to the portion of the assets to be
managed by Xxxxxxxx that was previously managed by PIC:
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Prudential 20/20 Focus Fund 0.375% to $1 bil.
0.3325% over $1 bil.
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Prudential Equity Fund, Inc. 0.250% to $500 mil.
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0.226% next $500 mil.
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0.203% over $1 bil.
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Prudential Europe Growth Fund, Inc. 0.375%
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Prudential Global Genesis Fund, Inc. 0.500%
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Prudential Natural Resources Fund, Inc. 0.375%
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Prudential Pacific Growth Fund, Inc. 0.375%
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Prudential Sector Funds, Inc.
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Prudential Financial Services Fund 0.375%
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Prudential Technology Fund 0.375%
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Prudential Utility Fund 0.300% to $250 mil.
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0.238% next $500 mil.
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0.203% next $750 mil.
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0.170% next $500 mil.
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0.140% next $2 bil.
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0.122% next $2 bil.
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0.105% over $6 bil.
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Prudential Small Company Fund, Inc. 0.455%
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Prudential U.S. Emerging Growth Fund, Inc. 0.300%
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Prudential Value Fund (formerly Prudential Equity Income Fund) 0.300% to $500 mil.
0.238% next $500 mil.
0.214% next $500 mil.
0.191% over $1.5 bil.
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Prudential World Fund, Inc.
Prudential Global Growth Fund 0.375%
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