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Exhibit (d)(2)(i)
THE TARGET PORTFOLIO TRUST
(Large Capitalization Value Portfolio)
SUBADVISORY AGREEMENT
Agreement made on this 24th day of May, 2000, between Prudential
Investments Fund Management LLC (PIFM or the Manager), a New York limited
liability company, and X.X. Xxxxxx Investment Management Inc. (the Adviser), a
Delaware corporation.
WHEREAS, PIFM has entered into a management agreement (the Management
Agreement) with The Target Portfolio Trust (the Trust), a Delaware business
trust and an open-end management investment company registered under the
Investment Company Act of 0000 (xxx 0000 Xxx), pursuant to which PIFM will act
as manager of the Trust.
WHEREAS, shares of the Trust are divided into separate series or
portfolios (each a portfolio), each of which is established pursuant to a
resolution of the Trustees of the Trust, and the Trustees may from time to time
terminate such portfolios or establish and terminate additional portfolios.
WHEREAS, PIFM has the responsibility of evaluating, recommending,
supervising and compensating investment advisers to each portfolio of the Trust
and desires to retain the Adviser to provide investment advisory services to
the Large Capitalization Value Portfolio of the Trust (the Fund) in connection
with the management of the Trust and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Adviser is willing to render
such investment advisory services.
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NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Trustees of
the Trust, the Adviser shall manage such portion of the investment
operations of the Fund as the Manager shall direct and shall manage the
composition of such portion of the Fund, including the purchase, retention
and disposition thereof, in accordance with the Fund's 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 called the
"Prospectus") as delivered to the Adviser from time to time by the Manager
and subject to the following understandings:
(i) The Adviser shall provide supervision of such portion 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 it manages will be invested or held uninvested
as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Adviser shall act in conformity with the Agreement and
Declaration of Trust, By-Laws and Prospectus of the Trust and the Fund as
provided to the Adviser by the Manager and with the written instructions
and directions of the Manager and of the Trustees of the Trust 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.
(iii) The Adviser shall determine the securities and commodities or
other assets to be purchased or sold by such portion of the Fund and will
place orders pursuant to its determination with or through such persons,
brokers, dealers or futures commission
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merchants to carry out the policy with respect to brokerage as set forth in the
Trust's Registration Statement and Prospectus. In selecting brokers, dealers or
futures commissions merchants to execute transactions for the Fund, it is
recognized that the Adviser will give primary consideration to securing best
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 a broker for securities transactions subject to the
requirements of the 1940 Act and the Adviser's determination of best execution.
It is also understood that it is desirable for the Trust 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 Trust than may result when
allocating brokerage to other brokers solely on the basis of seeking lowest
price. Therefore, the Adviser is authorized to place orders for the purchase and
sale of securities and commodities or other assets for the Fund with such
brokers or futures commission merchants, subject to review by the Trustees 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 Fund as well as
other clients of the Adviser,
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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 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 Trust and to such other clients.
(iv) 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
Trustees such periodic and special reports as the Board may reasonably request.
(v) The Adviser shall provide the Trust's custodian (the Custodian) by
10:00 a.m. (New York time) each business day with information relating to all
transactions that occurred on the previous business day concerning the portion
of the Fund'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 Fund'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 discrepancies noted and actions taken by the Adviser in
response thereto, by the tenth business day of the following month to the extent
reasonably practicable.
(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.
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(b) Services to be furnished by the Adviser under this Agreement may
be furnished through the medium of any of its directors, officers, employees,
affiliates or agents.
(c) The Adviser shall keep the Fund's 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 Trust
required by Rule 31a-1 under the 1940 Act. The Adviser agrees that all records
which it maintains for the Fund are the property of the Trust and the Adviser
will surrender promptly to the Trust any of such records upon the Trust's
request. 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
comply with the 1940 Act, 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 copies of all records
prepared in connection with (i) the performance of this Agreement and (ii) any
reports prepared in accordance with the compliance procedures maintained
pursuant to paragraph 1(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 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
of .30 of 1% of the
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average daily net assets of the portion of the Fund managed by the Adviser. This
fee will be computed daily and paid monthly.
4. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Fund, the Trust 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 Adviser'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 Trust may have against
the Adviser under federal or state securities laws. The Manager shall indemnify
the Adviser, 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 Adviser 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 Adviser'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 Trust at any
time, without the payment of any penalty, by the Trustees or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Fund, or by the
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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) and five business days after the Adviser receives
written notice of the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Adviser's directors, 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
shareholders of the Trust or the public, which refer to the Adviser in any way;
provided, however, that any such item which describes or characterizes the
Adviser or any of its affiliates, the Adviser's investment process with respect
to the Fund, the names of any of its clients (other than the Trust or advisory
clients of PIFM 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 forty-eight (48) 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 forty-eight (48) hours after the start of normal business
hours on the next succeeding business day).
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8. This Agreement may be amended by mutual consent, but the consent of
the Trust 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 on 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
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice President
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