EXHIBIT 99.B5(d)
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
(Prudential Active Balanced Fund)
Subadvisory Agreement
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Agreement made as of this 1st day of June, 1998 between Prudential
Investments Fund Management LLC, a New York limited liability company (PIFM or
the Manager), and The Prudential Investment Corporation, a New Jersey
Corporation (the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement, dated January
23, 1998 (the Management Agreement), with The Prudential Investment Portfolios,
Inc., formerly Prudential Xxxxxxxx Series Fund, Inc. (the Fund), a Maryland
corporation and 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 Prudential Active Balanced Fund (the Series).
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Series in connection with the management of the Series
and the Subadviser is willing to render such investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Board of
Directors of the Fund, the Subadviser shall manage the investment
operations of the Series and the composition of the Series' portfolio,
including the purchase, retention and disposition thereof, in accordance
with the Series' 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 the Series'
investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Series,
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 and By-Laws of the Fund and Prospectus of the Series
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.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by the Series 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 Registration Statement and the Series'
Prospectus or as the Board of Directors may direct from time to time.
In providing the Series 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 Series' investment transaction
business. It is also understood that it is desirable for the Series
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 Series 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 Series 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
Series 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
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the manner the Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Series and to such
other clients.
(iv) The Subadviser shall maintain all books and records with
respect to the Series' 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 Directors may
reasonably request.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the Series' 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 trustees,
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 trustees, 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.
2. The Manager shall continue to have responsibility for all services to
be provided to the Fund pursuant to the Management Agreement and shall
oversee and review the Subadviser's performance of its duties under this
Agreement.
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3. The Manager shall reimburse the Subadviser for reasonable costs and
expenses incurred by the Subadviser determined in a manner acceptable to
the Manager in furnishing the services described in paragraph 1 hereof.
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 no more than
120 days unless approved by a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Series, and thereafter 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
Series, 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 stockholders, sales literature or other material prepared for
distribution to stockholders of the Series 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 Series 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
THE PRUDENTIAL INVESTMENT CORPORATION
BY: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Senior Vice President
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