Exhibit (d)(6)
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
JENNISONDRYDEN ASSET ALLOCATION FUNDS
MANAGEMENT AGREEMENT
Agreement made the 17th day of February, 2004 between The Prudential Investment
Portfolios, Inc., a Maryland corporation (the Company), on behalf of each of its
separate investment series now or hereafter created as set forth on Schedule A
to this Agreement (each, a Fund), and Prudential Investments LLC, a New York
limited liability company (the Manager).
WITNESSETH
WHEREAS, each 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 Company desires to retain the Manager to render or contract to
obtain as hereinafter provided investment advisory services to each Fund
(individually and collectively referred to herein as the Fund) 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 Company hereby appoints the Manager to act as manager of each Fund and as
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. Subject to the
approval of the Board of Directors, the Manager is authorized to enter into a
subadvisory agreement with Prudential Investment Management, Inc., Xxxxxxxx
Associates LLC, or any other subadviser, whether or not affiliated with the
Manager (each, a Subadviser), pursuant to which such Subadviser shall furnish to
the Fund the investment advisory services in connection with the management of
the Fund (each, a Subadvisory Agreement). Subject to the approval of the Board
of Directors, the Manager is authorized to retain more than one Subadviser for
the Fund, and if the Fund has more than one Subadviser, the Manager is
authorized to allocate the Fund's assets among the Subadvisers. The Manager will
continue to have responsibility for all investment advisory services furnished
pursuant to any Subadvisory Agreement. The Fund and Manager understand and agree
that the Manager may manage the Fund in a "manager-of-managers" style with
either a single or multiple subadvisers, which contemplates that the Manager
will, among other things and pursuant to an Order issued by the Securities and
Exchange Commission (SEC): (i) continually evaluate the performance of each
Subadviser to the Fund, if applicable, through quantitative and qualitative
analysis and consultations with such Subadviser; (ii) periodically make
recommendations to the Board as to whether the contract with one or more
Subadvisers should be renewed, modified, or terminated; and (iii) periodically
report to the Board regarding the results of its evaluation and monitoring
functions. The Fund recognizes that a Subadviser's services may be terminated or
modified pursuant to the "manager-of-managers" process, and that the Manager may
appoint a new Subadviser for a Subadviser that is so removed.
2. Subject to the supervision of the Board of Directors, the Manager shall
administer the Fund's 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 any Subadvisory Agreement, the Manager 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 Fund's SEC
registration statement, and subject to the following understandings:
(a) The Manager (or a Subadviser under the Manager's supervision) shall provide
supervision of the Fund's investments, and shall determine from time to time
what investments or 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.
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(b) The Manager, in the performance of its duties and obligations under this
Agreement, shall act in conformity with the Articles of Incorporation of the
Company and the Fund's SEC registration statement, and with the instructions and
directions of the Board of Directors, and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state laws and
regulations. In connection therewith, the Manager shall, among other things,
prepare and file (or cause to be prepared and filed) such reports as are, or may
in the future be, required by the SEC.
(c) The Manager (or the Subadviser under the Manager's supervision) shall
determine the securities and futures contracts to be purchased or sold by the
Fund and will place orders pursuant to its determinations with or through such
persons, brokers, dealers or futures commission merchants (including but not
limited to Wachovia Securities LLC) in conformity with the policy with respect
to brokerage as set forth in the Fund's registration statement or as the Board
of Directors may direct from time to time. In providing the Fund with investment
supervision, it is recognized that the Manager (or the Subadviser under the Man-
ager's supervision) will give primary consideration to securing the most
favorable price and efficient execution. Consistent with this policy, the
Manager (or Subadviser under the Manager's supervision) 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 (or Subadviser) may be a party, the size and difficulty in
executing an order, and the value of the expected contribution of the broker-
dealer to the investment performance of the Fund on a continuing basis. The Man-
ager (or Subadviser) of the Fund each shall have discretion to effect investment
transactions for the Fund through broker-dealers (including, to the extent
legally permissible, broker-dealers affiliated with the Subadviser(s)) qualified
to obtain best execution of such transactions who provide brokerage and/or
research services, as such services are defined in Section 28(e) of the
Securities Exchange Act, as amended (the 1934 Act), and to cause the Fund to pay
any such broker-dealers an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the brokerage or research ser-
vices provided by such broker-dealer, viewed in light of either that particular
investment transaction or the overall responsibilities of the Manager (or the
Subadviser) with respect to the Fund and other accounts as to which they or it
may exercise investment discretion (as such term is defined in Section 3(a)(35)
of the 1934 Act), are reasonable in relation to the amount of commission.
On occasions when the Manager (or a Subadviser under the Manager's supervision)
deems the purchase or sale of a security or a futures contract to be in the best
interest of the Fund as well as other clients of the Manager (or the
Subadviser), the Manager (or 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 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 (or the Subadviser) in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Fund and to such other
clients.
(d) The Manager (or the Subadviser under the Manager's supervision) shall
maintain all books and records with respect to the Fund's portfolio transactions
and shall render to the Fund's Board of Directors such periodic and special
reports as the Board may reasonably request.
(e) The Manager (or the Subadviser under the Manager's supervision) shall be
responsible for the financial and accounting records to be maintained by the
Fund (including those being maintained by the Fund's Custodian).
(f) The Manager (or the Subadviser under the Manager's supervision) shall
provide the Fund's Custodian on each business day information relating to all
transactions concerning the Fund's assets.
(g) The investment management services of the Manager to the Fund under this
Agreement are not to be deemed exclusive, and the Manager shall be free to
render similar services to others.
(h) The Manager shall make reasonably available its employees and officers for
consultation with any of the Directors or officers or employees of the Fund with
respect to any matter discussed herein, including, without limitation, the
valuation of the Fund's securities.
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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) Articles of Incorporation;
(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 Directors 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 SEC
relating to the Fund and its shares of capital stock, and all amendments
thereto; and
(e) Prospectus and Statement of Additional Information of the Fund.
4. The Manager shall authorize and permit any of its officers and employees who
may be elected as Directors 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 required to be maintained
by it pursuant to Paragraph 2 hereof. The Manager agrees that all records that
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:
(i) the salaries and expenses of all employees of the Fund and the Manager,
except the fees and expenses of Directors who are not affiliated persons of the
Manager or any Subadviser,
(ii) all expenses incurred by the Manager in connection with managing the
ordinary course of the Fund's business, other than those assumed by the Fund
herein, and
(iii) the fees, costs and expenses payable to a Subadviser pursuant to a
Subadvisory Agreement.
The Fund assumes and will pay the expenses described below:
(a) the fees and expenses incurred by the Fund in connection with the management
of the investment and reinvestment of the Fund's assets,
(b) the fees and expenses of Directors who are not "interested persons" of the
Fund within the meaning of the 1940 Act,
(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 provision 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 or valuation of the shares of the Fund, including the cost of any
pricing or valuation service or services which may be retained pursuant to the
authorization of the Board of Directors, and (iv) for both mail and wire orders,
the cashiering function in connection with the issuance and redemption of the
Fund's securities,
(d) the fees and expenses of the Fund's Transfer and Dividend Disbursing Agent
that relate to the maintenance of each shareholder account,
(e) the charges and expenses of legal counsel and independent accountants for
the Fund,
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(f) brokers' commissions and any issue or transfer taxes chargeable to the Fund
in connection with its securities and futures transactions,
(g) all taxes and corporate fees payable by the Fund 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 share certificates representing, and/or non-negotiable share
deposit receipts evidencing, shares of the Fund,
(j) the cost of fidelity, directors' 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 SEC, and paying notice filing fees under
state securities laws, including the preparation and printing of the Fund's
registration statement and the Fund's 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 Directors' meetings and of preparing, printing and
mailing reports and notices 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 business, and
(n) any expenses assumed by the Fund pursuant to a Distribution and Service Plan
adopted in a manner that is consistent 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(s) as described on the attached Schedule A with respect to
the average daily net assets of the Fund. This fee will be computed daily, and
will be paid to the Manager monthly. The Fund shall not pay any fee or other
compensation to the Manager for the services provided and the expenses assumed
pursuant to this Agreement.
8. The Manager shall not be liable for any error of judgment or for any loss
suffered by the Fund 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 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.
The Fund shall indemnify the Manager and hold it harmless from and against all
damages, liabilities, costs and expenses (including reasonable attorneys' fees
and amounts reasonably paid in settlements) incurred by the Manager in or by
reason of any pending, threatened or completed action, suit, investigation or
other proceeding (including an action or suit by or in the right of the Fund or
its security holders) arising out of or otherwise based upon any action actually
or allegedly taken or omitted to be taken by the Manager in connection with the
performance of any of its duties or obligations under this Agreement; provided,
however, that nothing contained herein shall protect or be deemed to protect the
Manager against or entitle or be deemed to entitle the Manager to
indemnification in respect of any liability to the Fund or its security holders
to which the Manager would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties, by
reason of its reckless disregard of their duties and obligations 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 with respect to 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 Fund, or by the Manager at any time, without the payment of any
penalty, on not
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more than 60 days' nor less than 30 days' written notice to the Fund. 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 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 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 Directors
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 in any way or otherwise be deemed an agent of the Fund.
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 the Fund 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 that 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 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, 0xx Xxxxx, 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 any name including the words "JennisonDryden" or
"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 any name including the words "JennisonDryden" or "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.
17. A copy of the Company's Articles of Incorporation is on file with the State
Department of Assessments and Taxation of the State of Maryland, and notice is
hereby given that this instrument is not binding upon any of the Directors or
shareholders individually but is binding only upon the assets and property of
the Fund.
18. Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the
1940 Act, shall be resolved by reference to such term or provision of the 1940
Act and to interpretations thereof, if any, by the United States courts or, in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the SEC issued pursuant to the 1940 Act. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is related by rules, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
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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 above
written.
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
By: /s/ Xxxx X. Xxxx
----------------
Xxxx X. Xxxx
President
PRUDENTIAL INVESTMENTS LLC
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Executive Vice President
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SCHEDULE A
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
JennisonDryden Asset Allocation Funds
As compensation for services provided by Prudential Investments LLC (PI), each
Fund will pay to PI a fee equal, on an annualized basis, to the following:
FUND ANNUAL FEE RATE
JennisonDryden Conservative Allocation Fund 0.20% of average daily net assets
JennisonDryden Moderate Allocation Fund 0.20% of average daily net assets
JennisonDryden Growth Allocation Fund 0.20% of average daily net assets
Schedule dated February 17, 2004
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