EXHIBIT 99.5(b)
PRUDENTIAL DEVELOPING MARKETS FUND
Subadvisory Agreement
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Agreement made as of this 1st day of June 1998 between Prudential
Investments Fund Management LLC, a New York limited liability company (PIFM or
the Manager), and The Prudential Investment Corporation, a New Jersey
Corporation (the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement, dated June 1,
1998 (Management Agreement), with Prudential Developing Markets Fund (the Fund),
a Delaware business trust and a diversified 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 certain 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).
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to each Series in connection with the management of the Series
and the Subadviser is willing to render such investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Board of
Trustees of the Fund, the Subadviser 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 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"), and subject to the following
understandings:
(i) The Subadviser shall provide supervision of each Series'
investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Series,
and what portion of the assets will be invested or held uninvested as
cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the
Declaration of Trust and By-Laws of the Fund and Prospectus of the
Series and with the instructions and directions of the Manager and of
the Board of Trustees of the Fund and will conform to and comply with
the
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requirements of the 1940 Act, the Internal Revenue Code of 1986 and
all other applicable federal and state laws and regulations.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by each Series and will place
orders with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to Prudential
Securities Incorporated) to carry out the policy with respect to
brokerage as set forth in the Fund's Registration Statement and each
Series' Prospectus or as the Board of Trustees may direct from time
to time. In providing each Series 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. 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 Subadviser 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 each Series than
may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore,
the Subadviser is authorized to place orders for the purchase and
sale of securities and futures contracts for each Series with such
brokers or futures commission merchants, 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 brokers or futures commission merchants may
be useful to the Subadviser in connection with the Subadviser's
services to other clients.
On occasions when the Subadviser deems the purchase or sale of
a security or futures contract to be in the best interest of each
Series 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
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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 each Series and to such
other clients.
(iv) The Subadviser shall maintain all books and records with
respect to each Series' portfolio transactions required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f)
of Rule 31a-1 under the 1940 Act and shall render to the Fund's Board
of Trustees such periodic and special reports as the Board may
reasonably request.
(v) The Subadviser shall provide to the Fund's Custodian on each
business day information relating to all transactions concerning each
Series' assets 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.
(b) The Subadviser shall authorize and permit any of its trustees,
officers and employees who may be elected as trustees 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 trustees, officers or employees.
(c) The Subadviser shall keep the Fund's books and records with respect to
each Series 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. 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 any such
records as are required to be maintained by it pursuant to paragraph 1(a)
hereof.
2. The Manager shall continue to have responsibility for all services to
be provided to each Series pursuant to the Management Agreement and shall
oversee and review the Subadviser's performance of its duties under this
Agreement.
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3. The Manager shall reimburse the Subadviser for reasonable costs and
expenses incurred by the Subadviser determined in a manner acceptable to
the Manager in furnishing the services described in paragraph 1 hereof.
4. The Subadviser shall not be liable for any error of judgment or for
any loss suffered by a Series 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.
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 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 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. 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 0000 Xxx) or upon the termination of the
Management Agreement.
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
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 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 each Series 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.
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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.
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 FUND MANAGEMENT LLC
BY: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Executive Vice President
THE PRUDENTIAL INVESTMENT CORPORATION
BY: /s/Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
Senior Vice President
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SCHEDULE A
TO
PRUDENTIAL DEVELOPING MARKETS FUND
SUBADVISORY AGREEMENT
Series
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Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Dated: June 1, 1998
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