EXHIBIT 99.5(f)(ii)
PRUDENTIAL XXXXXX FUND
(formerly the Prudential Institutional Fund)
(Prudential Active Balanced Fund)
CASH MANAGEMENT AGREEMENT
Agreement made as of this 30th day of October, 1996 between Prudential
Mutual Fund Management LLC (PMF or the Manager), a limited liability company,
and The Prudential Investment Corporation (PIC), a New Jersey Corporation.
W I T N E S S E T H
WHEREAS, the Manager has entered into a Management Agreement, dated
October 30, 1996 (the Management Agreement), with Prudential Xxxxxx Fund (the
Trust), 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 PMF will act as Manager of the Trust;
WHEREAS, the shares of beneficial interest of the Trust are divided into
separate series or portfolios, each of which is established pursuant to a
resolution of the Trustees of the Trust, and the Trustees may from time to time
terminate such funds or establish and terminate additional funds;
WHEREAS, the Manager has entered into a separate subadvisory agreement for
the Prudential Active Balanced Fund (the Fund) with Xxxxxxxx Associates Capital
Corp. (the Subadviser) pursuant to which investment advisory services will be
provided to the Fund except with respect to (i) the management of short-term
assets, including cash, money market instruments and repurchase agreements and
(ii) the lending of portfolio securities;
WHEREAS, the Manager desires to retain PIC to provide investment advisory
services to the Active Balanced Fund with respect to (i) the management of
short-term assets, including cash, money market instruments and repurchase
agreements and (ii) the lending of portfolio securities in connection with the
management of the Trust and PIC 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 Trustees of the
Trust, PIC shall manage the short-term assets and cash of the Fund,
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 collectively called the "Prospectus") and subject to the
following understandings:
(i) PIC shall provide supervision of the Fund's investments and
determine from time to time what investments and securities will be
purchased, retained,
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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, PIC shall act in conformity with the Declaration of Trust,
By-Laws and Prospectus of the Fund and the Trust and with the
instructions and directions of the Manager and of the Trustees of the
Trust 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 advise PIC of the dollar amount of the
Fund's assets that shall be invested in repurchase agreements, money
market instruments or held in cash and advise PIC as to the securities
available for lending and the securities to be recalled from loan.
(iv) Upon receipt of information from the Subadviser as to the
amount of funds available for short-term investment, as described in
paragraph 1(a)(iii) above, PIC shall determine the securities to be
purchased or sold by the Fund and will place orders with or through
such persons, brokers or dealers (including but not limited to
Prudential Securities Incorporated) to carry out the policy with
respect to brokerage as set forth in the Trust's Registration
Statement and Prospectus or as the Trustees may direct from time to
time. In providing the Fund with investment supervision, it is
recognized that PIC will give primary consideration to securing the
most favorable price and efficient execution. Within the framework of
this policy, PIC may consider the financial
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responsibility, research and investment information and other services
provided by brokers or dealers who may effect or be a party to any
such transaction or other transactions to which PIC's other clients
may be a party. On occasions when PIC deems the purchase or sale of a
security to be in the best interest of a Fund as well as other clients
of PIC, PIC, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities 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 so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by PIC in the manner PIC considers to be the most equitable and
consistent with its fiduciary obligations to the Fund, the Trust and
to such other clients.
(v) PIC 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 Trustees of the Trust such periodic and
special reports as the Board may reasonably request.
(vi) PIC shall provide the Trust'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.
(vii) The investment management services provided by PIC
hereunder are not to be deemed exclusive, and PIC shall be free to
render similar services to others.
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(b) PIC shall authorize and permit any of its directors, officers and
employees who may be elected as Trustees or officers of the Trust to serve
in the capacities in which they are elected. Services to be furnished by
PIC under this Agreement may be furnished through the medium of any of such
directors, officers or employees.
(c) PIC shall keep the Trust's books and records required to be
maintained by PIC pursuant to paragraph 1(a)(v) hereof and shall timely
furnish to the Manager all information relating to PIC's services hereunder
needed by the Manager to keep the other books and records of the Trust
required by Rule 31a-1 under the 1940 Act. PIC agrees that all records
which it maintains for the Trust are the property of the Trust and PIC will
surrender promptly to the Trust any of such records upon the Trust's
request, provided however that PIC may retain a copy of such records. PIC
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)(v) hereof.
2. The Manager shall continue to have responsibility for all services to be
provided to the Trust pursuant to the Management Agreement and shall oversee and
review PIC's performance of its duties under this Agreement.
3. The Manager shall reimburse PIC for reasonable costs and expenses
incurred by PIC determined in a manner acceptable to the Manager in furnishing
the services provided in paragraph 1 hereof.
4. PIC 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 PIC's part in the performance of
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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 Trustees of the Trust 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 PIC 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.
6. Nothing in this Agreement shall limit or restrict the right of any of
PIC's directors, officers, or employees who may also be a Trustee, officer or
employee of the Trust 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 PIC'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 PIC 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 PIC in any way, prior to
use thereof and not to use material if PIC 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 PIC hereunder by first-class or
overnight mail, facsimile transmission equipment or hand delivery.
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8. 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 Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Secretary; or (2) to the Subadviser at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President.
9. This Agreement may be amended by mutual consent, but the consent of a
Fund must be obtained in conformity with the requirements of the 1940 Act.
10. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to choice of law principles
thereof and in accordance with the 1940 Act. In the case of any conflict the
1940 Act shall control.
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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 first above
written.
PRUDENTIAL MUTUAL FUND MANAGEMENT LLC
By /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
President
THE PRUDENTIAL INVESTMENT CORPORATION
By /s/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. Xxxxxx
Senior Vice President
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