Exhibit 99(d)(2)(IX)
STRATEGIC PARTNERS STYLE SPECIFIC FUNDS
THE TARGET PORTFOLIO TRUST
SUBADVISORY AGREEMENT
Agreement made as of this 6th day of October, 2003 between Prudential
Investments LLC (PI or the Manager), a New York limited liability company, and
NFJ Investment Group L.P. (NFJ or the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement (each, a
Management Agreement) (i) dated August 25, 1999, with Strategic Partners Style
Specific Funds and (ii) dated as of November 9, 1992, as amended, with The
Target Portfolio Trust (the Trusts). Each of the Trusts is a Delaware statutory
trust 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 Trusts; and
WHEREAS, the Manager desires to retain the Subadviser to provide
investment advisory services to each Trust and one or more of each Trust's
respective series as specified in Schedule A hereto (individually and
collectively, with the Trusts, 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
Trustees of each 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 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 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 Declaration of Trust, 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 Trustees 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 Trustees 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 Trustees such periodic and special reports
as the Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation
with any of the Trustees 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 its 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, 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 such 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 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.
(b) The Subadviser shall authorize and permit any of its directors,
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 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. 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.
(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 Trustees 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, 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 Trustees
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 0000 Xxx Xxxxxxx, Xxx. 0000,
Xxxxxx, XX 00000.
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 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: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
NFJ INVESTMENT GROUP L.P.
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Managing Director
SCHEDULE A
As compensation for services provided by NFJ Investment Group L.P., Prudential
Investments LLC will pay NFJ Investment Group L.P. a fee equal, on an annualized
basis, pursuant to the following schedule:
ANNUAL FEE
FUND/SERIES: (AS A % OF AVERAGE NET ASSETS):
Strategic Partners Style Specific Funds
Strategic Partners Small Capitalization
Value Fund 0.40%
The Target Portfolio Trust
Small Capitalization Value Portfolio 0.40%
Dated as of ____________, 2003.
