PRUDENTIAL-BACHE SHORT-TERM GLOBAL INCOME FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 25th day of October, 1990 between
Prudential Mutual Fund Management Inc., a Delaware Corporation ( "PMF" or the
"Manager" ), and The Prudential Investment Corporation, a New Jersey corporation
(the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement,
dated October 25, 1990 (the "Management Agreement"), with Prudential-Bache
Short-Term Global Income Fund, Inc. (the "Fund"), a Maryland corporation and a
non-diversified open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act"), pursuant to which PMF will act
as Manager of the Fund.
WHEREAS, PMF desires to retain the Subadviser to provide
investment advisory services to the Fund in connection with the management of
the Fund 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 Directors of the Fund, the Subadviser 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 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 the Fund's
investments and 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
Articles of Incorporation, By-Laws and Prospectus of the Fund and
with the instructions and directions of the Manager and of the
Board of Directors of the Fund and will conform to and comply with
the 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 the Fund and will
place orders with or through such persons, brokers, dealers or
futures commission merchants (including but not limited to
Prudential-Bache Securities Inc.) to carry out the policy with
respect to brokerage as set forth in the Fund's Registration
Statement and 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. It is understood that
Prudential-Bache Securities Inc. may be used as principal broker
for securities transactions but that no formula has been adopted
for allocation of the Fund's investment transaction business. It
is also understood that it is desirable for the Fund 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 the Fund 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 the Fund with such brokers
or futures commission merchants, subject to review by the Fund's
Board of Directors 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 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
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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 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 Trustees such periodic and special reports as the Trustees
may reasonably request.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions
concerning the Fund's assets and shall provide the Manager with
such information upon request of the Manager.
(vi) The investanent 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
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. 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 l(a)
hereof.
2. The Manager shall continue to have responsibility for all
services to be provided to the Fund 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 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.
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' not 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.
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 stockholders, sales literature or
other material prepared for distribution to stockholders 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.
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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 MUTUAL FUND MANAGEMENT, INC.
By /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Executive Vice President
THE PRUDENTIAL INVESTMENT CORPORATION
By /s/ [signature omitted]
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