Exhibit (d)(4)
XXXXXX SHORT-TERM BOND FUND, INC.
MANAGEMENT AGREEMENT
Agreement made the 17/th/ day of July, 2003 between Xxxxxx Short-Term Bond Fund,
Inc. (the Fund), a Maryland corporation, and Prudential Investments 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 the Fund and one or more
of its series (individually and collectively with the Fund, 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 Fund hereby appoints the Manager to act as manager of the Fund and each
series thereof, if any (each, a Portfolio) 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 of the Fund, 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 of the Fund, 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.
(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
Fund 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 Prudential Securities Incorporated) 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 Manager'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 Manager (or Subadviser) to 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 Manager or
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 services 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.
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 common 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,
(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 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 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 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 the name "Xxxxxx Short-Term Bond Fund, Inc." or any name
including the words "Xxxxxxxx," "Xxxxxx," or "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 the
name Xxxxxx Short-Term Bond Fund, Inc." or any name including the words
"Xxxxxxxx," "Xxxxxx," "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. 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 Securities and Exchange Commission 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 Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
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.
XXXXXX SHORT-TERM BOND FUND, INC.
By:
Name: Xxxx X. Xxxx
President
PRUDENTIAL INVESTMENTS LLC
By:
Xxxxxx X. Xxxxx
Executive Vice President
and Chief Administrative Officer
SCHEDULE A
Annual Fee Rate
Xxxxxx Short-Term Bond Fund, Inc.
-Xxxxxx Short-Term Corporate Bond Fund .40%
-Xxxxxx Ultra Short Bond Fund .60% of up to $1 billion
.55% over $1 billion
Schedule dated July 17, 2003
XXXXXX SHORT-TERM BOND FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 17/th/ day of July, 2003 between Prudential
Investments LLC (PI or the Manager), a New York limited liability company and
Prudential Investment Management, Inc. (PIM or the Subadviser),
WHEREAS, the Manager has entered into a Management Agreement (the Management
Agreement) dated July 17, 2003, with Xxxxxx Short-Term Bond Fund, Inc., a
Maryland corporation (the Fund) and a diversified, open-end management
investment company registered under the Investment Company Act of 1940 as
amended (the 1940 Act), pursuant to which PI acts as Manager of the Fund; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto (individually and collectively, with the Fund, referred to
herein as the Fund) and to manage such portion of the Fund as the Manager shall
from time to time direct, and the Subadviser is willing to render such
investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of Directors of
the Fund, the Subadviser shall manage such portion 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 its
then current prospectus 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"), and
subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of the Fund's
investments as the Manager shall direct, and shall 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 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 copies of the Articles of
Incorporation, By-Laws and Prospectus of the Fund provided to it by the Manager
(the Fund Documents) and with the instructions and directions of the Manager and
of the Board of Directors of the Fund, co-operate with the Manager's (or its
designee's) personnel responsible for monitoring the Fund's compliance 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. In connection therewith, the Subadviser shall, among other
things, prepare and file such reports as are, or may in the future be, required
by the Securities and Exchange Commission (the Commission). The Manager shall
provide Subadviser timely with copies of any updated Fund documents.
(iii) The Subadviser shall determine the securities and futures contracts to be
purchased or sold by such portion of the Fund's portfolio, as applicable, and
will place orders with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to Prudential Securities
Incorporated (or any broker or dealer affiliated with the Subadviser) to carry
out the policy with respect to brokerage as set forth in the Fund's Prospectus
or as the Board of Directors may direct from time to time. In providing the Fund
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. The Manager (or Subadviser) to 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 of 1934, 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 services 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 Subadviser deems the purchase or sale of a security or
futures contract to be in the best interest of the Fund 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 the manner the Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with respect to the
Fund's portfolio transactions effected by it as 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. The Subadviser 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.
(v) The Subadviser or an affiliate shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning the
portion of the Fund's assets it manages, 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. Conversely, the Subadviser and Manager understand and agree
that if the Manager manages the Fund in a "manager-of-managers" style, the
Manager will, among other things, (i) continually evaluate the performance of
the Subadviser through quantitative and qualitative analysis and consultations
with the Subadviser, (ii) periodically make recommendations to the Fund's Board
as to whether the contract with one or more subadvisers should be renewed,
modified, or terminated, and (iii) periodically report to the Fund's Board
regarding the results of its evaluation and monitoring functions. The Subadviser
recognizes that its services may be terminated or modified pursuant to this
process.
(vii) The Subadviser acknowledges that the Manager and the Fund intend to rely
on Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and
the Subadviser hereby agrees that it shall not consult with any other subadviser
to the Fund with respect to transactions in securities for the Fund's portfolio
or any other transactions of Fund assets.
The Subadviser further acknowledges that it shall not consult with any other
subadviser of the Fund that is a principal underwriter or an affiliated person
of a principal underwriter with respect to transactions in securities for the
Fund's portfolio or any other transaction of Fund assets, and that its
investment advisory responsibilities as set forth in this Agreement are limited
to such discrete portion of the Fund's portfolio as determined by the Manager.
(b) The Subadviser 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 the
Subadviser under this Agreement may be furnished through the medium of any of
such directors, 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 or any successor regulation. 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 or any
successor regulation any such records as are required to be maintained by it
pursuant to paragraph 1(a) hereof.
(d) In connection with its duties under this Agreement, the Subadviser agrees to
maintain adequate compliance procedures to ensure its compliance with the 1940
Act, the Investment Advisers Act of 1940, as amended, and other applicable state
and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records prepared
in connection with (i) the performance of this Agreement and (ii) the
maintenance of compliance procedures pursuant to paragraph 1(d) hereof as the
Manager may reasonably request.
(f) The Subadviser shall be responsible for the voting of all shareholder
proxies with respect to the investments and securities held in the Fund's
portfolio, subject to such reporting and other requirements as shall be
established by the Manager.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement. The Manager shall provide (or
cause the Fund's custodian to provide) timely information to the Subadviser
regarding such matters as the composition of assets in the portion of the Fund
managed by the Subadviser, cash requirements and cash available for investment
in such portion of the Fund, and all other information as may be reasonably
necessary for the Subadviser to perform its duties hereunder (including any
excerpts of minutes of meetings of the Board of Directors of the Fund that
affect the duties of the Subadviser).
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation therefor, a
fee equal to the percentage of the Fund's average daily net assets of the
portion of the Fund managed by the Subadviser as described in the attached
Schedule A. Liability for payment of compensation by the Manager to the
Subadviser under this Agreement is contingent upon the Manager's receipt of
payment from the Fund for management services described under the Management
Agreement between the Fund and the Manager. Expense caps or fee waivers for the
Fund that may be agreed to by the Manager, but not agreed to by the Subadviser,
shall not cause a reduction in the amount of the payment to the Subadviser by
the Manager.
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,
provided, however, that nothing in this Agreement shall be deemed to waive any
rights the Manager or the Fund may have against the Subadviser under federal or
state securities laws. The Manager shall indemnify the Subadviser, 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 Subadviser
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 Subadviser's willful misfeasance, bad faith,
gross negligence, or 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 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 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. The Subadviser agrees that it will promptly notify the
Fund and the Manager of the occurrence or anticipated occurrence of any event
that would result in the assignment (as defined in the 0000 Xxx) of this
Agreement, including, but not limited to, a change or anticipated change in
control (as defined in the 0000 Xxx) of the Subadviser; provided that the
Subadviser need not provide notice of such an anticipated event before the
anticipated event is a matter of public record.
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; (2) to the Fund
at Gateway Center Three, 4th Floor, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000,
Attention: Secretary; or (3) to the Subadviser at Gateway Center Two, 000
Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000.
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 shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund 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.
8. 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.
9. This Agreement shall be governed by the laws of the State of New York.
10. 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 Commission 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 Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
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 LLC
By:
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
and Chief Administrative Officer
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
By:
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SCHEDULE A
XXXXXX SHORT-TERM BOND FUND, INC.
As compensation for services provided by Prudential Investment Management, Inc.,
Prudential Investments LLC will pay Prudential Investment Management, Inc. a fee
equal, on an annualized basis, to the following:
Advisory Fee
Xxxxxx Short-Term Bond Fund, Inc.
-Xxxxxx Short-Term Corporate Bond Fund,
Inc. .20%
-Xxxxxx Ultra Short Bond Fund .30% up to $1 billion,
.275% over $1 billion.
Dated as of July 17, 2003.
