PRUDENTIAL WORLD FUND, INC.
(The Fund)
International Stock Series
MANAGEMENT AGREEMENT
Agreement made as of the 18th day of September, 1996 between the Fund,
a Maryland corporation, on behalf of its International Stock Series, and
Prudential Mutual Fund Management, Inc., a Delaware corporation (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
International Stock Series 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 corporate 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 administrator of its corporate 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. The
Manager will enter into agreements, dated the date hereof, with each of Mercator
Asset Management, L.P. (Mercator) and The Prudential Investment Corporation
("PIC") pursuant to which each shall furnish to the Fund and its International
Stock Series the investment advisory services specified therein in connection
with the management of the Fund. Such agreements in the forms attached as
Exhibit A are hereinafter referred to as the "Subadvisory Agreements." The
Manager will continue to have responsibility for all investment advisory
services furnished pursuant to the Subadvisory Agreements.
2. Subject to the supervision of the Board of Directors of the Fund,
the Manager shall administer the Fund's corporate 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 the Subadvisory Agreements, the Manager shall manage the
investment operations of the International Stock Series and the composition of
the International Stock Series' portfolio, including the purchase, retention and
disposition thereof, in accordance with the International Stock Series'
investment objective, policies and restrictions as stated in the Prospectus
(hereinafter defined) and subject to the following understandings:
(a) The Manager shall provide supervision of the International Stock
Series' investments and determine from time to time what investments or
securities will be purchased, retained, sold or loaned by the International
Stock Series, and what portion of the assets will be invested or held
uninvested as cash.
(b) The Manager, in the performance of its duties and
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obligations under this Agreement, shall act in conformity with the Fund's
Articles of Incorporation and By-Laws, and Prospectus (hereinafter defined)
of the International Stock Series and with the instructions and directions
of the Board of Directors of the Fund and will conform to and comply with
the requirements of the 1940 Act and all other applicable federal and state
laws and regulations.
(c) The Manager shall determine the securities and futures contracts
to be purchased or sold by the International Stock Series 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 and
the International Stock Series' Prospectus (hereinafter defined) or as the
Board of Directors may direct from time to time. In providing the
International Stock Series with investment supervision, it is recognized
that the Manager will give primary consideration to securing the most
favorable price and efficient execution. Consistent with this policy, the
Manager 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 may be a party.
It is understood that Prudential Securities
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Incorporated may be used as principal broker for securities transactions
but that no formula has been adopted for allocation of the International
Stock Series' investment transaction business. It is also understood that
it is desirable for the International Stock Series that the Manager have
access to supplemental investment and market research and security and
economic analysis provided by brokers or futures commission merchants and
that such brokers may execute brokerage transactions at a higher cost to
the International Stock Series than may result when allocating brokerage to
other brokers or futures commission merchants on the basis of seeking the
most favorable price and efficient execution. Therefore, the Manager is
authorized to pay higher brokerage commissions for the purchase and sale of
securities and futures contracts for the International Stock Series to
brokers or futures commission merchants who provide such research and
analysis, 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 broker or futures commission
merchant may be useful to the Manager in connection with its services to
other clients.
On occasions when the Manager deems the purchase or sale of a security
or a futures contract to be in the best interest of the International Stock
Series as well as other clients of the Manager, Mercator or PIC, the
Manager, to the extent permitted by applicable laws and regulations, may,
but shall
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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 in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the International Stock Series, the Fund
and to such other clients.
(d) The Manager shall maintain all books and records with respect to
the International Stock Series' 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 shall be responsible for the financial and accounting
records to be maintained by the International Stock Series (including those
being maintained by the Fund's Custodian).
(f) The Manager shall provide the Fund's Custodian on each business
day with information relating to all transactions concerning the
International Stock Series' 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.
3. The Fund has delivered to the Manager copies of each
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of the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Fund, as filed with the Secretary
of State of Maryland (such Articles of Incorporation, as in effect on the
date hereof and as amended from time to time, are herein called the
"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 Securities and Exchange Commission (the "Commission") relating to
the Fund and its International Stock Series, and shares of the Fund's
Common Stock and all amendments thereto;
(e) Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
(f) Prospectus of the Fund and its International Stock Series (such
Prospectus and Statement of Additional Information, as currently in effect
and as amended or supplemented from time to time, being herein called the
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"Prospectus").
4. The Manager 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. All services to be
furnished by the Manager under this Agreement may be furnished through the
medium of any such directors, 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 which it maintains for the International Stock Series 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 personnel of the Fund and the
Manager except the fees and expenses of Directors who are not affiliated
persons of the Manager or the International Stock Series investment
adviser,
(ii) all expenses incurred by the Manager or by the International
Stock Series in connection with managing the ordinary course of the
International Stock Series' business
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other than those assumed by the International Stock Series herein, and
(iii) the costs and expenses payable to Mercator and PIC pursuant to
the Subadvisory Agreements.
The Fund on behalf of its International Stock Series assumes and will
pay the expenses described below:
(a) the fees and expenses incurred by the International Stock Series
in connection with the management of the investment and reinvestment of the
International Stock Series' assets,
(b) the fees and expenses of Directors who are not affiliated persons
of the Manager or the International Stock Series' investment advisers,
(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
International Stock Series and the providing of any such records to the
Manager useful to the Manager in connection with the Manager's
responsibility for the accounting records of the International Stock Series
pursuant to Section 31 of the 1940 Act and the rules promulgated
thereunder, (iii) the pricing of the shares of the International Stock
Series, including the cost of any pricing service or services which may be
retained pursuant to the authorization of the Board of Directors of the
Fund, and (iv) for both mail and wire orders, the cashiering function in
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connection with the issuance and redemption of the International Stock
Series' securities,
(d) the fees and expenses of the Fund's Transfer and Dividend
Disbursing Agent, which may be the Custodian, 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 stock certificates representing, and/or non-negotiable
share deposit receipts evidencing, shares of the International Stock
Series,
(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 Securities and Exchange
Commission, registering the Fund as a broker or dealer and qualifying its
shares under state securities laws, including the preparation and printing
of the Fund's registration statements, prospectuses and statements of
additional information for filing under federal and state
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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 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's International Stock Series
pursuant to a Plan of Distribution adopted in conformity with Rule 12b-1
under the 1940 Act.
7. In the event the expenses of the Fund's International Stock Series
for any fiscal year (including the fees payable to the Manager but excluding
interest, taxes, brokerage commissions, distribution fees and litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business) exceed the lowest applicable annual
expense limitation established and enforced pursuant to the statute or
regulations of any jurisdictions in which shares of the Fund are then qualified
for offer and sale, the compensation due the Manager will be reduced by the
amount of such excess, or, if such reduction exceeds the compensation payable to
the Manager, the Manager will pay to the Fund the amount of such reduction which
exceeds the amount of such compensation.
8. For the services provided and the expenses assumed
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pursuant to this Agreement, the Fund will pay to the Manager as full
compensation therefor a fee at an annual rate of 1% of the Fund's average daily
net assets. This fee will be computed daily and will be paid to the Manager
monthly. Any reduction in the fee payable and any payment by the Manager to the
Fund pursuant to paragraph 7 shall be made monthly. Any such reductions or
payments are subject to readjustment during the year.
9. 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.
10. 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 International Stock Series, or by the Manager at any time,
without the payment of any
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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 1940 Act).
11. Nothing in this Agreement shall limit or restrict the right of any
director, 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.
12. 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.
13. 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
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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.
14. 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.
15. 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, X.X.
00000, Attention: Secretary; or (2) to the Fund at Xxx Xxxxxxx Xxxxx, Xxx Xxxx,
X.X. 00000, Attention: President.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
17. The Fund may use the name "Prudential World Fund, Inc." or any
name including the word "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
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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 "Prudential World Fund,
Inc." or any name including the word "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.
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 WORLD FUND, INC.
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxx
President
PRUDENTIAL MUTUAL FUND MANAGEMENT, INC.
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
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