PRUDENTIAL WORLD FUND, INC.
(The Fund)
International Stock Series
SUBADVISORY AGREEMENT
Agreement made as of the 18th day of September, 1996, between Prudential
Mutual Fund Management, Inc. (PMF or the Manager), a Delaware corporation, and
The Prudential Investment Corporation (PIC), a New Jersey Corporation.
W I T N E S S E T H
WHEREAS, the Manager has entered into a Management Agreement, dated as of
September 18, 1996 (the Management Agreement), with the Fund, on behalf of its
International Stock Series, a diversified, open-end management investment
company registered under the Investment Company Act of 0000 (xxx 0000 Xxx),
pursuant to which PMF will act as Manager of the International Stock Series;
WHEREAS, the shares of common stock 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 documents appropriately filed with the State of
Maryland, and the Directors may from time to time terminate such series or
portfolios or establish and terminate additional series and portfolios;
WHEREAS, the Manager has entered into separate subadvisory agreements with
a "Subadviser" for the International Stock Series pursuant to which investment
advisory services will be provided to the International Stock Series except with
respect to (i) the management of short-term assets, including cash, money market
instruments and repurchase agreements and (ii) the lending of portfolio
securities; WHEREAS, the Manager desires to retain PIC to provide investment
advisory services to the International Stock Series with respect to (i) the
management of short-term assets, including cash, money market instruments and
repurchase agreements and (ii) the lending of portfolio securities in connection
with the management of the International Stock Series and PIC 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 Directors of
the Fund, PIC shall manage the short-term assets and cash of the
International Stock Series, including the purchase, retention and
disposition thereof, in accordance with the International Stock Series'
investment objective, 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
collectively called the "Prospectus") and subject to the following
understandings:
(i) PIC shall provide supervision of International Stock Series'
investments and determine from time to time what investments and
securities will
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be purchased, retained, sold or loaned by International Stock 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, PIC shall act in conformity with the Fund's Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Manager and of the 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 advise PIC of the dollar amount of
International Stock Series' assets that shall be invested in
repurchase agreements, money market instruments or held in cash and
advise PIC as to the securities available for lending and the
securities to be recalled from loan.
(iv) Upon receipt of information from the Subadviser as to the
amount of funds available for short-term investment, as described in
paragraph 1(a)(iii) above, PIC shall determine the securities to be
purchased or sold by International Stock Series and will place orders
with or through such persons, brokers or dealers (including but not
limited to Prudential Securities Incorporated) to carry out the
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policy with respect to brokerage as set forth in the International
Stock Series' Registration Statement and Prospectus or as the Board of
Directors may direct from time to time. In providing International
Stock Series with investment supervision, it is recognized that PIC
will give primary consideration to securing the most favorable price
and efficient execution. Within the framework of this policy, PIC may
consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may
effect or be a party to any such transaction or other transactions to
which PIC's other clients may be a party.
On occasions when PIC deems the purchase or sale of a security to
be in the best interest of the International Stock Series as well as
other clients of PIC, PIC, to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate
the securities 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 so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by PIC in the manner PIC considers to be the most equitable and
consistent with its fiduciary obligations to the International Stock
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Series, the Fund and to such other clients.
(v) PIC shall maintain all books and records with respect to
International Stock 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 Board of
Directors of the Fund such periodic and special reports as the Board
may reasonably request. (vi) PIC shall provide the Fund's Custodian on
each business day with information relating to all transactions
concerning International Stock Series' assets and shall provide the
Manager with such information upon request of the Manager. (vii) The
investment management services provided by PIC hereunder are not to be
deemed exclusive, and PIC shall be free to render similar services to
others.
(b) PIC 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
PIC under this Agreement may be furnished through the medium of any of such
directors, officers or employees. (c) PIC shall keep the International
Stock Series' books and records required to be maintained by PIC pursuant
to paragraph 1(a)(v) hereof and shall timely furnish to the Manager all
information relating to PIC's services
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hereunder needed by the Manager to keep the other books and records of the
Fund required by Rule 31a-1 under the 1940 Act. PIC agrees that all records
which it maintains for the International Stock Series are the property of
the Fund and PIC will surrender promptly to the Fund any of such records
upon the Fund's request, provided however that PIC may retain a copy of
such records. PIC 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)(v) hereof.
2. The Manager shall continue to have responsibility for all services to be
provided to the International Stock Series pursuant to the Management Agreement
and shall oversee and review PIC's performance of its duties under this
Agreement.
3. The Manager shall reimburse PIC for reasonable costs and expenses
incurred by PIC determined in a manner acceptable to the Manager in furnishing
the services provided in paragraph 1 hereof.
4. PIC shall not be liable for any error of judgment or for any loss
suffered by a 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 PIC's part in the performance of its duties or from its
reckless disregard of its obligations and duties under this Agreement.
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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 Directors of the Fund
or by vote of a majority of the outstanding voting securities (as defined in the
0000 Xxx) of the International Stock Series, or by the Manager or PIC 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
PIC'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 PIC'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 PIC at
its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature or other material prepared for distribution to
shareholders of International Stock Series or the public, which refer to PIC in
any way, prior to
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use thereof and not to use material if PIC 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 PIC hereunder by first-class or
overnight mail, facsimile transmission equipment or hand delivery.
8. 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 Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Secretary; or (2) to PIC at Prudential Plaza, 000 Xxxxx
Xxxxxx, Xxxxxx, XX 00000-0000, Attention: President.
9. This Agreement may be amended by mutual consent, but the consent of a
Fund must be obtained in conformity with the requirements of the 1940 Act.
10. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to choice of law principles
thereof and in accordance with the 1940 Act. In the case of any conflict the
1940 Act shall control.
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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 MUTUAL FUND MANAGEMENT, INC.
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
THE PRUDENTIAL INVESTMENT CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxx
Executive Vice President
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