Exhibit 99.(d) (2)
PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 1st day of February, 2001 between Prudential
Investments Fund Management LLC (PIFM or the Manager), The Prudential Investment
Corporation (the Subadviser or PIC), and The Prudential Series Fund, Inc.
WHEREAS, the Manager has entered into a Management Agreement, dated
September 7th, 2000 (the Management Agreement), with The Prudential Series Fund,
Inc. (the Fund), a Maryland corporation and a diversified open-end management
investment company registered under the Investment Company Act of ▇▇▇▇ (▇▇▇ ▇▇▇▇
▇▇▇), pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to certain series of the Fund specified below (the Series, or
Portfolios), and the Subadviser is willing to render such investment advisory
services; and
WHEREAS, this Agreement between PIFM and the Subadviser is intended to
supersede the Service Agreement, dated December 31, 1984 pertaining to the Fund;
and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of Directors
of the Fund, the Subadviser shall manage the investment operations of the
Series of the Fund and the composition of the Series' portfolio, including the
purchase, retention and disposition thereof, in accordance with the Series'
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 Series'
investments and determine from time to time what investments and securities
will be purchased, retained, sold or loaned by the Series, 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. 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.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by each Series, and will place orders
with or through such persons, brokers, dealers or futures commission
merchants (including but not limited to Prudential Securities Incorporated)
to carry out the policy with respect to brokerage as set forth in the
Fund's Prospectus or as the Board of Directors may direct from time to
time. In providing the Series 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 Securities Incorporated
may be used as principal broker for securities transactions, but that no
formula has been adopted for allocation of the Series' investment
transaction business. It is also understood that it is desirable for the
Series 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 Series 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 securitiesand futures contracts for the
Series 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 Series as
well as other clients ofthe 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 Series' 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 Board of Directors such periodic and
special reports as the Directors may reasonably request. The Subadviser
shall make reasonably available its employees and officers for consultation
with any of the Directors 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 shall provide the Series' Custodian on each
business day with information relating to all transactions concerning the
Series' assets, 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 Manager manages the Fund in a "manager-of-
managers" style, which contemplates that Manager will, among other things,
(i) continually evaluate the performance of the subadviser to each
Portfolio 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. Subadviser recognizes that its services may be terminated or
modified pursuant to this process. Manager is authorized to retain more
than one subadvisor for any Portfolio, and for any Portfolio with more than
one subadvisor, the Manager is authorized to allocate the Portfolio's
assets among the subadvisors.
(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 Series' 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 Series required by Rule 31a-1 under the 1940 Act. The Subadviser agrees
that all records which it maintains for the Series are the property of the
Fund, and the Subadviser will surrender promptly tothe 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.
2. The Manager shall continue to have responsibility for all services to
be provided to the Series 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.
3. 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.
4. For the following Fund Portfolios, PIFM will pay PIC, with respect to
the assets that PIC manages, a fee (payable quarterly) of 50% of the fee that
PIFM receives (65% of the PIFM fee, for Small Capitalization Stock Portfolio)
provided that such percentage is reduced at each asset breakpoint (if any) by
2.5% (reduced instead by 5% at each asset breakpoint for the Money Market
Portfolio of the Fund):
Conservative Balanced Portfolio
Diversified Bond Portfolio
Diversified Conservative Growth Portfolio
Flexible Managed Portfolio
Government Income Portfolio
High Yield Bond Portfolio
Money Market Portfolio
Small Capitalization Stock Portfolio
Stock Index Portfolio
Zero Coupon Bond Portfolio 2005
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 ▇▇▇▇ ▇▇▇) 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' written notice
to the other party. This Agreement shall terminate automatically in the event
of its assignment (as defined in the ▇▇▇▇ ▇▇▇) 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 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
Jersey.
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:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
THE PRUDENTIAL INVESTMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
President
THE PRUDENTIAL SERIES FUND, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President