EXHIBIT 99.B5(e)
PRUDENTIAL XXXXXXXX SERIES FUND, INC.
(Prudential Xxxxxxxx Active Balanced Fund)
SUBADVISORY AGREEMENT
Agreement made as of this 23rd day of January, 1998 between Prudential
Investments Fund Management LLC (PIFM or the Manager), a New York Limited
Liability Corporation, 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 January
23, 1998 (the Management Agreement), with Prudential Xxxxxxxx Series Fund, Inc.
(the Corporation), a Maryland corporation 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 the Corporation;
WHEREAS, the shares of common stock of the Corporation are divided into
separate series or portfolios, each of which is established pursuant to a
resolution of the Board of Directors of the Corporation, and the Board of
Directors 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 Xxxxxxxx Active Balanced Fund (the Fund) with Xxxxxxxx Associates
LLC (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 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 Fund
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 Board of
Directors of the Corporation, 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
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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, PIC shall act in conformity with the Articles of Incorporation, By-
Laws and Prospectus of the Fund and the Corporation and with the instructions
and directions of the Manager and of the Board of Directors of the Corporation
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 Corporation'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 PIC will give primary consideration to securing the most
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favorable price and efficient execution. Within the framework of this policy,
PIC may consider the financial 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 Corporation 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
Board of Directors of the Corporation such periodic and special reports as the
Board may reasonably request.
(vi) PIC shall provide the Corporation'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.
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(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.
(b) PIC shall authorize and permit any of its directors, officers and employees
who may be elected as Board of Directors or officers of the Corporation 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 Corporation'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
Corporation required by Rule 31a-1 under the 1940 Act. PIC agrees that all
records which it maintains for the Corporation are the property of the
Corporation and PIC will surrender promptly to the Corporation any of such
records upon the Corporation'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 Corporation pursuant to the Management Agreement and shall
oversee and review PIC's performance of its duties under this Agreement.
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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 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
Corporation 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 Director, officer
or employee of the Corporation 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
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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.
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 Xxxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxx
Xxxxxx 00000-0000, Attention: Secretary; or (2) to the Subadviser at Prudential
Plaza, 000 Xxxxx Xxxxxx, 0xx xxxxx, Xxxxxx, Xxx Xxxxxx, 00000, Attention: Chief
Investment Officer.
9. 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.
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 INVESTMENTS FUND MANAGEMENT LLC
By _____________________________________________
Xxxxx X. Xxxxxx
President
THE PRUDENTIAL INVESTMENT CORPORATION
By ______________________________________________
Xxxxxxxx X. Xxxxxx
Senior Vice President
E:XXXXXXXX\AGRMTS\
XXX-XXXXXX.XX
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