EXHIBIT 99.5(a)
PRUDENTIAL DEVELOPING MARKETS FUND
Management Agreement
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Agreement made this 1st day of June 1998, between Prudential Developing
Markets Fund, a Delaware business trust (the Fund), on behalf of the separate
investment series of the Fund identified on Schedule A of this Agreement as may
be amended from time to time (each investment series herein referred to as a
Series), and Prudential Investments Fund Management LLC, a New York limited
liability company (the Manager).
W I T N E S S E T H
WHEREAS, the Fund is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
1940 Act); and
WHEREAS, the Fund desires to retain the Manager to render or contract
to obtain as hereinafter provided investment advisory services to each Series
and the Fund also desires to avail itself of the facilities available to the
Manager with respect to the administration of its day to day business affairs,
and the Manager is willing to render such investment advisory and administrative
services;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Manager to act as manager of each
Series and administrator of its business affairs for the period and on the terms
set forth in this Agreement. The Manager accepts such appointment and agrees to
render the services herein described, for the compensation herein provided. The
Manager is
authorized to enter into an agreement with The Prudential Investment Corporation
(PIC) pursuant to which PIC shall furnish to each Series the investment advisory
services in connection with the management of each Series (the Subadvisory
Agreement). The Manager will continue to have responsibility for all investment
advisory services furnished pursuant to the Subadvisory Agreement.
2. Subject to the supervision of the Board of Trustees of the Fund,
the Manager shall administer each Series' business affairs and, in connection
therewith, shall furnish the Fund with office facilities and with clerical,
bookkeeping and recordkeeping services at such office facilities and, subject to
Section 1 hereof and the Subadvisory Agreement, the Manager shall manage the
investment operations of each Series and the composition of each Series'
portfolio, including the purchase, retention and disposition thereof, in
accordance with each Series' investment objectives, policies and restrictions as
stated in the Prospectus (hereinafter defined) and subject to the following
understandings:
(a) The Manager shall provide supervision of each Series' investments
and determine from time to time what investments or securities will be
purchased, retained, sold or loaned by each Series, and what portion of the
assets will be invested or held uninvested as cash.
(b) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Declaration of Trust
and By-Laws of the Fund and the Prospectus (hereinafter defined) of each
Series and with the instructions and directions of the Board of Trustees of
the Fund and will conform
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to and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations.
(c) The Manager shall determine the securities and futures contracts
to be purchased or sold by each Series and will place orders pursuant to its
determinations with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to Prudential Securities
Incorporated) in conformity with the policy with respect to brokerage as set
forth in the Fund's Registration Statement and each Series' Prospectus
(hereinafter defined) or as the Board of Trustees may direct from time to
time. In providing each Series with investment supervision, it is
recognized that the Manager will give primary consideration to securing the
most favorable price and efficient execution. Consistent with this policy,
the Manager 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 other clients of the Manager 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 or a Series' investment
transaction business. It is also understood that it is desirable for each
Series that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers or futures
commission merchants and that such brokers may execute brokerage
transactions at a higher
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cost to each Series than may result when allocating brokerage to other
brokers or futures commission merchants on the basis of seeking the most
favorable price and efficient execution. Therefore, the Manager is
authorized to pay higher brokerage commissions for the purchase and sale of
securities and futures contracts for each Series to brokers or futures
commission merchants who provide such research and analysis, subject to
review by the Fund's Board of Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such broker or futures commission merchant may be
useful to the Manager in connection with its services to other clients.
On occasions when the Manager deems the purchase or sale of a security
or a futures contract to be in the best interest of each Series as well as
other clients of the Manager or the Subadviser, the Manager, 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 so 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 Manager in the
manner it considers to be the most equitable and consistent with its
fiduciary obligations to each Series and to such other clients.
(d) The Manager shall maintain all books and records with respect to
each Series' portfolio transactions and shall render to the Fund's Board of
Trustees
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such periodic and special reports as the Board may reasonably request.
(e) The Manager shall be responsible for the financial and accounting
records to be maintained by the Fund with respect to each Series (including
those being maintained by the Fund's Custodian).
(f) The Manager shall provide to the Fund's Custodian on each business
day information relating to all transactions concerning each Series' assets.
(g) The investment management services of the Manager to the Series
under this Agreement are not to be deemed exclusive, and the Manager shall
be free to render similar services to others.
3. The Fund has delivered to the Manager copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Agreement and Declaration of Trust, as registered pursuant to a
Certificate of Business Trust filed with the Secretary of State of Delaware
(such a Declaration of Trust, as in effect on the date hereof and as amended
from time to time, is herein called the "Declaration of Trust");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof
and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Trustees of the Fund
authorizing the appointment of the Manager and approving the form of this
agreement;
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-1A (the Registration Statement), as filed
with the Securities and Exchange Commission (the Commission) relating to the
Fund and
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its shares of beneficial interest and all amendments thereto;
(e) Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
(f) Prospectus of each Series and Statement of Additional 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").
4. The Manager shall authorize and permit any of its officers and
employees who may be elected as trustees or officers of the Fund to serve in the
capacities in which they are elected. All services to be furnished by the
Manager under this Agreement may be furnished through the medium of any such
officers or employees of the Manager.
5. The Manager shall keep the Fund's books and records with respect to
each Series required to be maintained by it pursuant to paragraph 2 hereof. The
Manager agrees that all records which it maintains for the Fund are the property
of the Fund and it will surrender promptly to the Fund any such records upon the
Fund's request, provided however that the Manager may retain a copy of such
records. The Manager 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 the Manager pursuant to Paragraph 2 hereof.
6. During the term of this Agreement, the Manager shall pay the
following expenses:
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(i) the salaries and expenses of all personnel of the Fund and the
Manager except the fees and expenses of trustees who are not affiliated
persons of the Manager or a Series' investment adviser,
(ii) all expenses incurred by the Manager or by the Fund in connection
with managing the ordinary course of each Series' business other than those
assumed by the Fund herein, and
(iii) the costs and expenses payable to PIC pursuant to the Subadvisory
Agreement.
The Fund assumes and will pay the expenses described below, allocable among
the Fund's Series as the Fund shall determine:
(a) the fees and expenses incurred by the Fund in connection with the
management of the investment and reinvestment of each Series' assets,
(b) the fees and expenses of trustees who are not affiliated persons
of the Manager or a Series' investment adviser,
(c) the fees and expenses of the Custodian that relate to (i) the
custodial function and the recordkeeping connected therewith, (ii) preparing
and maintaining the general accounting records of the Fund and the providing
of any such records to the Manager useful to the Manager in connection with
the Manager's responsibility for the accounting records of the Fund pursuant
to Section 31 of the 1940 Act and the rules promulgated thereunder, (iii)
the pricing of the shares of each Series, including the cost of any pricing
service or services which may be retained pursuant to the authorization of
the Board of Trustees of
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the Fund, and (iv) for both mail and wire orders, the cashiering function in
connection with the issuance and redemption of each Series' securities,
(d) the fees and expenses of the Fund's Transfer and Dividend
Disbursing Agent, which may be the Custodian, that relate to the maintenance
of each shareholder account,
(e) the charges and expenses of legal counsel and independent
accountants for the Fund,
(f) brokers' commissions and any issue or transfer taxes chargeable to
each Series in connection with its securities and futures transactions,
(g) all taxes and corporate fees payable by each Series to federal,
state or other governmental agencies,
(h) the fees of any trade associations of which the Fund may be a
member,
(i) the cost of stock certificates representing, and/or non-negotiable
share deposit receipts evidencing, shares of each Series or their respective
classes of shares,
(j) the cost of fidelity, trustees and officers and errors and
omissions insurance,
(k) the fees and expenses involved in registering and maintaining
registration of the Fund and of its shares with the Securities and Exchange
Commission, registering the Fund as a broker or dealer and paying notice
filing fees under state securities laws, including the preparation and
printing of the
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Fund's registration statements and each Series' prospectuses and statements
of additional information for filing under federal and state securities laws
for such purposes,
(l) allocable communications expenses with respect to investor
services and all expenses of shareholders' and trustees' meetings and of
preparing, printing and mailing reports to shareholders in the amount
necessary for distribution to the shareholders,
(m) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's or a Series'
business, and
(n) any expenses assumed by a Series pursuant to a Plan of
Distribution adopted in conformity with Rule 12b-1 under the 1940 Act.
7. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Manager as full compensation therefor a fee
at the annual rate of each Series' average daily net assets designated on
Schedule A with respect to each Series. This fee will be computed daily and
will be paid to the Manager monthly.
8. The Manager shall not be liable for any error of judgment or for any
loss suffered by a Series in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 0000 Xxx) or loss resulting
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from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. 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 Trustees of the Fund
or, with respect to each Series, by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of such Series, or by the Manager 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. The termination of this
Agreement with respect to any Series shall not result in the termination of this
Agreement with respect to any other Series unless explicitly so provided. This
Agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right of any
officer or employee of the Manager who may also be a 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 dissimilar nature, nor limit or restrict the right of
the Manager to engage in any other business or to render services of any kind to
any other corporation, firm, individual or association.
11. Except as otherwise provided herein or authorized by the Board of
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Trustees of the Fund from time to time, the Manager shall for all purposes
herein be deemed to be an independent contractor and shall have no authority to
act for or represent the Fund or a Series in any way or otherwise be deemed an
agent of the Fund or a Series.
12. During the term of this Agreement, the Fund agrees to furnish the
Manager at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of each Series or the public, which refer in any way to the
Manager, prior to use thereof and not to use such material if the Manager
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt thereof. In the event of termination of
this Agreement, the Fund will continue to furnish to the Manager copies of any
of the above mentioned materials which refer in any way to the Manager. Sales
literature may be furnished to the Manager hereunder by first-class or overnight
mail, facsimile transmission equipment or hand delivery. The Fund shall furnish
or otherwise make available to the Manager such other information relating to
the business affairs of the Fund or a Series as the Manager at any time, or from
time to time, reasonably requests in order to discharge its obligations
hereunder.
13. 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.
14. 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 Gateway Center Three, 000 Xxxxxxxx
Xxxxxx,
00
Xxxxxx, XX 00000-0000, Attention: Secretary; or (2) to the Fund at Gateway
Center Three, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000, Attention: President.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. The Fund may use the name "Prudential Developing Markets Fund" or
any name including the word "Prudential" only for so long as this Agreement or
any extension, renewal or amendment hereof remains in effect, including any
similar agreement with any organization which shall have succeeded to the
Manager's business as Manager or any extension, renewal or amendment thereof
remain in effect. At such time as such an agreement shall no longer be in
effect, the Fund will (to the extent that it lawfully can) cease to use such a
name or any other name indicating that it is advised by, managed by or otherwise
connected with the Manager, or any organization which shall have so succeeded to
such businesses. In no event shall the Fund use the name "Prudential
Developing Markets Fund" or any name including the word "Prudential" if the
Manager's function is transferred or assigned to a company of which The
Prudential Insurance Company of America does not have 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 DEVELOPING MARKETS FUND
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
PRUDENTIAL INVESTMENTS FUND
MANAGEMENT LLC
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Executive Vice President
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SCHEDULE A
TO
PRUDENTIAL DEVELOPING MARKETS FUND
MANAGEMENT AGREEMENT
Fund Compensation*
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Prudential Developing Markets Equity Fund Fee calculated at the
annual rate of 1.25% of
average daily net assets
Prudential Latin America Equity Fund Fee calculated at the
annual rate of 1.25% of
average daily net assets
Dated: June 1, 1998
* The Manager may voluntarily waive any portion of its compensation or reimburse
the Series for certain operating expenses as it may elect from time to time and
the Manager may terminate any such waiver or reimbursement in its sole
discretion upon reasonable advance notice to the Fund.
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