SCHEDULE 14A
(RULE 14a-101)
INFORMATION Proxy Statement Pursuant to SectionREQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) of
the Securities Exchange Act ofOF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No.(AMENDMENT NO. )
Filed by the Registrant /x//X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, forFor Use of the
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL EQUITY FUND, INC.Under Rule 14a-12
Prudential Natural Resources Fund, Inc.
Prudential Sector Funds, Inc.
Prudential Small Company Fund, Inc.
Prudential Tax-Managed Small-Cap Fund, Inc.
Prudential U.S. Emerging Growth Fund, Inc.
The Prudential Investment Portfolios, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified Inin Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other thanOther Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)./X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1)
and 0-11.
1)(1) Title of each class of securities to which transaction applies:
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2)- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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3)- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set(set forth the amount on which the
filing fee is calculated and state how it was determined):
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4)- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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5)- --------------------------------------------------------------------------------
(5) Total fee paid:
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/x/- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.materials:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Formform or Scheduleschedule and the date of its filing.
1)(1) Amount Previously Paid:
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2)previously paid:
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(2) Form, Schedule or Registration Statement No.:
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3)- --------------------------------------------------------------------------------
(3) Filing Party:
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4)- --------------------------------------------------------------------------------
(4) Date Filed:
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL JENNISON FUND, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL MULTI-SECTOR FUND, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL SMALL COMPANIES FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PRUDENTIAL UTILITY FUND INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE GLOBAL GOVERNMENT PLUS FUND, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE GLOBAL TOTAL RETURN FUND, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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PRUDENTIAL MUTUAL FUNDS
ONE SEAPORT PLAZAGATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW YORK, NEW YORK 10292JERSEY 07102-4077
------------------------
August 22, 1996IMPORTANT PROXY MATERIALS
PLEASE VOTE NOW!
DECEMBER 8, 2000
------------------------
Dear Shareholder:
Enclosed is a proxy statement askingI am inviting you to vote in favor ofon several proposals relating to the management
and operation of your Fund. MeetingsA shareholder meeting of your Fund and ofcertain other
Funds within the Prudential Mutual Fund Complexcomplex is scheduled for January 17,
2001. This package contains information about the proposals and includes
materials you will need to vote.
The Boards of Directors of the Funds have reviewed the proposals and have
recommended that the proposals be presented to you for consideration. Although
the Directors have determined that the proposals are in your best interest, the
final decision is yours.
Shareholders of several Funds are being held on October 30, 1996asked to consider theseapprove many of the same
proposals, andso in order to transact any other business that may properly come before the meetings. In the
past, when we have solicited proxiessave money for your Fund, we usually have enclosed aone proxy statement directed solelyhas been
prepared for these Funds. To help you understand the proposals, we are including
a section that answers commonly asked questions. The accompanying proxy
statement includes a detailed description about each of the proposals relating
to your Fund.
Please read the enclosed materials carefully and cast your vote. Remember,
your vote is extremely important, no matter how large or small your holdings. By
voting now, you can help avoid additional costs that are incurred with follow-up
letters and calls.
TO VOTE, YOU MAY USE ANY OF THE FOLLOWING METHODS:
- BY MAIL. Please complete, date and sign your proxy card before mailing it
in the enclosed postage-paid envelope.
- BY INTERNET. Have your proxy card available. Go to the shareholdersweb site:
www.proxyvote.com. Enter your 12-digit control number from your proxy
card. Follow the simple instructions found on the web site.
- BY TELEPHONE. If your Fund shares are held in your own name, call
1-800-690-6903 toll free. If your Fund shares are held on your behalf in a
brokerage account with Prudential Securities Incorporated or another
broker, call 1-800-454-8683 toll free. Enter your 12-digit control number
from your proxy card. Follow the simple instructions.
If you have any questions before you vote, please call us at 1-800-225-1852.
We're glad to help you understand the proposals and assist you in voting. Thank
you for your participation.
Sincerely,
David R. Odenath, Jr.
PRESIDENT
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE
PROPOSALS
Please read the enclosed proxy statement for a complete description of the
proposals. However, as a quick reference, the following questions and answers
provide a brief overview of the proposals.
Q. WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
A. The purpose of the proxy is to ask you to vote on six primary issues:
- to elect 13 Board members,
- for most Funds, to approve a new subadvisory agreement,
- to permit the Fund's manager to enter into or make material changes to
your Fund's subadvisory agreement without shareholder approval,
- to amend the management agreement to permit the Fund's manager to allocate
assets among subadvisers,
- to approve changes to your Fund's fundamental investment restrictions, and
- to ratify the selection of your Fund. This time,
however, shareholdersFund's independent accountants for the
current year.
Q. WHY AM I RECEIVING PROXY INFORMATION ON FUNDS THAT I DO NOT OWN?
A. Shareholders of several Funds are being asked to approve many of the same
proposals, so most of the information that must be included in a proxy
statement for your Fund needs to be included in a proxy statement for the
other Funds as well. Therefore, in order to save money for your Fund, one
proxy statement has been prepared for these Funds. This proxy statement contains
detailed information about each of the proposals relating to your Fund, and we
recommend that you read it carefully. However, we have also attached some
Questions and Answers that we hope will assist you in evaluating the proposals.
We have retained an outside proxy solicitation firm to assist us with any
necessary follow-up. If we have not received your vote as the meeting date
approaches, you may receive a telephone call from Shareholder Communications
Corporation to ask for your vote. We hope that their telephone call does not
inconvenience you.
You will receive a separate proxy statement and proxy card for each Fund
that you own. If you hold shares in more than one of the Funds or you have more
than one account holding Fund shares (E.G., an individual account AND an IRA),
you will receive multiple copies of this Proxy Statement and proxy cards for
each of your Fund accounts. Please vote each proxy card you receive.
Thank you for your attention to this matter and for your continuing
investment in the Prudential Mutual Funds.
Very truly yours,
/s/ RICHARD A. REDEKER
--------------------------------------
RICHARD A. REDEKER
PRESIDENT
Prudential Mutual Fund Management
PROXY CARDS FOR EACH OF YOUR FUNDS ARE ENCLOSED ALONG WITH THE PROXY
STATEMENT. PLEASE VOTE YOUR SHARES TODAY BY SIGNING AND RETURNING EACH
ENCLOSED PROXY CARD IN THE POSTAGE PREPAID ENVELOPE PROVIDED. THE BOARD OF
YOUR FUND RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES FOR BOARD MEMBER AND
"FOR" EACH PROPOSAL.
QUESTIONS AND ANSWERS
Q: WHAT IS THE PURPOSE OF THIS PROXY SOLICITATION?
A:The purpose of this proxy is to ask you to vote on three primary issues:
- to elect twelve Board members;
- for most Funds, to approve changes to your Fund's fundamental investment
restrictions; and
- to ratify the selection of your Fund's independent accountants for the
current year.
Q: WHY AM I RECEIVING PROXY INFORMATION ON FUNDS THAT I DO NOT OWN?
A:In the past, when we have solicited proxies for your Fund, we have generally
enclosed a proxy statement directed solely to the shareholders of one Fund.
This time, however, shareholders of several Funds are being asked to approve
many of the same proposals, so most of the information that must be included
in a proxy statement for your Fund needs to be included in a proxy statement
for the other Funds as well. Therefore, in order to save money for your Fund,
one proxy statement has been prepared for these Funds.
Q:prepared.
Q. WHY AM I RECEIVING MORE THAN ONE PROXY STATEMENT OR MORE THAN ONE
MAILING?
A:A. You will receive a separate proxy statement for each Fund that you own.
Also, if you hold shares in more than one account, foraccount--for example, in an
individual account ANDand in an IRA, youIRA--you will receive multiple proxy
statements. Each proxy card should be voted and returned.
Q: WHYQ. ARE YOU RECOMMENDING A NEW BOARD FOR THE FUNDS?
A:An advisory group comprised of independent directors and trustees ofA. No, except for Prudential Natural Resources Fund, Inc. The other Fund Boards
nominated the Prudential Mutual Funds, including a number ofthirteen individuals who currently serve on the existing
Board members of
the Funds (the Advisory Group), assisted by representatives of Prudential
Mutual Fund Management, formed a corporate governance task force and
considered issues relating to the management and governance of the Funds. The
Advisory Group recommended to the Fund Boards, as part of an overall plan to
coordinate and enhance the efficiency of the operation of the Funds, that the
Prudential Mutual Funds should be restructured with fewer Boards in the
Complex. The Fund Boards adopted the recommendations of the Advisory Group and
nominated twelve individuals drawn primarily from existing Boards. NineTen of the individual Board nominees are independent of Prudential.
Said differently, if
the Shareholders approve the proposal and the nominees are elected, more of
the Prudential Mutual Funds would have identical Board compositions than
presently is the case. The Boards believe that coordinated governance through
this Board restructuring will benefit each of the Funds.
Q:Q. WILL THE PROPOSED CHANGES RESULT IN HIGHER MANAGEMENT FEES?
A:A. No. The rate of the management fees charged to each Fund will remain the
same.
Q:Q. WILL THE PROPOSED CHANGES RESULT IN HIGHER DIRECTORS' AND TRUSTEES' FEES?
A:It is anticipated that, on a Fund by Fund basis, Directors' and Trustees' fees
inA. We do not expect the aggregate will notDirectors' fees to be higher than they are
currently.
(ii)
Q:now.
Q. WHAT ARE "FUNDAMENTAL" INVESTMENT RESTRICTIONS, AND WHY ARE THEY BEINGPROPOSED TO
BE CHANGED?
A:A Fund's "fundamental"A. "Fundamental" investment restrictions are limitations placed on a Fund's
investment policies that can be changed only by a shareholder vote--EVEN IF THE CHANGES ARE MINOR.vote--even if
the changes are minor. The law requires certain investment policies to be
designated as fundamental. Each Fund adopted a number of fundamental
investment restrictions, either when the Fund was created or at a
later date, and some of those fundamental restrictions reflect
regulatory, business or industry conditions, practices or requirements that
are no longer in effect. Others reflect regulatory requirements that, while
still in effect, do not need to be classified as fundamental restrictions.
The Fund Boards believe that certain fundamental investment restrictions that are
not legally required should be eliminated andeliminated. The Boards also believe that
other fundamental restrictions should be
modernized and made more uniform. The Boards believe
that the proposedreason for these changes is to the Funds' fundamental investment restrictions
will provide
greater flexibility.
Q:investment flexibility for the Funds.
Q. DO THE PROPOSED CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS MEAN THAT MY
FUND'S INVESTMENT OBJECTIVE IS BEING CHANGED?
A:NoneA. No. The only Fund with a proposed change of the proposals would change the investment objective is
Prudential Jennison Equity Opportunity Fund, a series of any Fund,
except that ShareholdersThe Prudential
Investment Portfolios, Inc. That Fund's Board recommends removing the income
component of Prudential Utility Fund are being asked to approve
a change in thatthe Fund's investment objective.
Q:Q. WHAT WILL BE THE EFFECT OF THE PROPOSED CHANGES TO MY FUND'S FUNDAMENTAL
RESTRICTIONS?
A:A. The Boards doBoard does not believe that the proposed changes to fundamental
investment restrictions will result at this time in a major restructuring of any Fund's
investment portfolio. The changes will allow each applicable Fund greater
flexibility to respond to investment opportunities. By making certain
investment policies and restrictions non-fundamental, the Board may make
changes in the future that it considers desirable without the necessity of a
Shareholdershareholder vote and without incurringthe related additional expenses. A Shareholdershareholder vote is
not necessary for changes to non-fundamental investment policies or
restrictions.
Q: WHAT ARE MY BOARD'S RECOMMENDATIONS?
A:The BoardQ. HOW MANY VOTES DO YOU NEED TO APPROVE THESE PROPOSALS?
A. We need a plurality, or a majority of the votes cast, to approve
Proposals No. 1 and 7. For Proposals No. 2, 3, 4, 5 and 6, we need the
affirmative vote of a majority of each FundFund's outstanding voting securities,
as defined by the Investment Company Act of 1940.
Q. WHAT IF WE DO NOT HAVE ENOUGH VOTES TO MAKE THIS DECISION BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
A. If we do not receive sufficient votes to hold the meeting, we or Georgeson
Shareholder Communications Inc., a proxy solicitation firm, may contact you
by mail or telephone to encourage you to vote. Shareholders should review
the proxy materials and cast their vote to avoid additional mailings or
telephone calls. If we do not have enough votes to approve the proposals by
the time of the shareholder meeting at 10 a.m. on January 17, 2001, the
meeting may be adjourned to permit further solicitation of proxy votes.
Q. HAS EACH FUND'S BOARD APPROVED THE PROPOSALS?
A. Yes. Your Fund's Board has recommendedapproved the proposals and recommends that you
vote "FOR" the nominees for
Board Member and "FOR" each proposal that applies to your Fund.
THE ATTACHED PROXY STATEMENT CONTAINS MORE DETAILED INFORMATION ABOUT EACH
OF THE PROPOSALS RELATING TO YOUR FUND. PLEASE READ IT CAREFULLY.
(iii)
YOUR VOTE IS IMPORTANT
NO MATTERapprove them.
Q. HOW MANY SHARES YOU OWN
Enclosed you will find one or more proxy cards relating to each of the Funds
for whichVOTES AM I ENTITLED TO CAST?
A. As a shareholder, you are entitled to vote. Please indicateone vote for each share you own of
your voting instructionsFund on EACH ofthe record date. The record date is November 3, 2000.
Q. HOW DO I VOTE MY SHARES?
A. You can vote your shares by completing and signing the enclosed proxy cards, datecard,
and sign them, and return themmailing it in the envelope provided. IF YOU SIGN, DATE AND RETURN A PROXY CARD BUT GIVE NO
VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED "FOR" THE NOMINEES FOR
DIRECTOR OR TRUSTEE NAMED IN THE ATTACHED PROXY STATEMENT AND "FOR" ALL
OTHER PROPOSALS INDICATED ON THE CARDS. In orderenclosed postage paid envelope. If you need any
assistance, or have any questions regarding the proposal or how to avoidvote your
shares, please call Prudential at (800) 225-1852.
You may also vote via the additional
expense to the Funds of further solicitation, we ask your cooperation in
mailing in your proxy cards promptly. Unless proxy cards are signed by the
appropriate persons as indicated in the instructions below, they will not be
voted.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to signInternet. To do so, have your proxy card properly.
1. Individual Accounts: Signavailable
and go to the web site: www.proxyvote.com. Enter your 12-digit control
number from your proxy card and follow the instructions found on the web
site.
Finally, you can vote by telephone. If your Fund shares are held in your own
name, call 1-800-690-6903 toll free. If your Fund shares are held on your
behalf in a brokerage account with Prudential Securities Incorporated or
another broker, call 1-800-454-8683 toll free. Enter your 12-digit control
number from your proxy card and follow the simple instructions given.
Q. HOW DO I SIGN THE PROXY CARD?
A. INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as it appears in the
registrationtheir names appear
on the proxyaccount registration shown on the card.
2. Joint Accounts: Either party mayJOINT ACCOUNTS: Both owners must sign butand the name of the party
signingsignatures should conform
exactly to the namenames shown in the registration on the account registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her capacity.
For example, a trustee for a trust should include his or her title when he
or she signs, such as "Jane Doe, Trustee"; or an authorized officer of a
company should indicate his or her position with the company, such as "John
Smith, President."
The attached proxy card.
3. All Other Accounts: The capacitystatement contains more detailed information about each of
the individual signing the proxy
card should be indicated unlessproposals relating to your Fund. Please read it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
- -------------------------------------------------------------------------- ----------------------------
Corporate Accounts
(1) XYZ Corp.......................................................... XYZ Corp.
Jane L. Doe, Treasurer
(2) XYZ Corp.......................................................... Jane L. Doe, Treasurer
(3) XYZ Corp. c/o Jane L. Doe, Treasurer.............................. Jane L. Doe
(4) XYZ Corp. Profit Sharing Plan..................................... Jane L. Doe, Trustee
Partnership Accounts
(1) The ABC Partnership............................................... Robert Fogg, Partner
(2) Fogg and Hale, Limited Partnership................................ Robert Fogg, General Partner
Trust Accounts
(1) ABC Trust Account................................................. William X. Smith, Trustee
(2) Ron F. Anderson, Trustee u/t/d 12/28/78........................... Ron F. Anderson
Custodial or Estate Accounts
(1) Katherine T. John, Cust. F/b/o Albert T. John, Jr. UGMA/UTMA..... Katherine T. John
(2) Estate of Katherine T. John....................................... Albert T. John, Executor
(iv)carefully.
PRUDENTIAL ALLOCATION20/20 FOCUS FUND
PRUDENTIAL EQUITYINDEX SERIES FUND-PRUDENTIAL STOCK INDEX FUND
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL EQUITY INCOMESECTOR FUNDS, INC.-PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL GLOBAL LIMITED MATURITYSECTOR FUNDS, INC.-PRUDENTIAL HEALTH SCIENCES FUND
PRUDENTIAL SECTOR FUNDS, INC.-PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL SECTOR FUNDS, INC.-PRUDENTIAL UTILITY FUND
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL INTERMEDIATE GLOBAL INCOMETAX-MANAGED FUNDS-PRUDENTIAL TAX-MANAGED EQUITY FUND
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL JENNISON FUND, INC.
PRUDENTIAL MULTI-SECTOR FUND, INC.
PRUDENTIAL SMALL COMPANIES FUND, INC.
PRUDENTIAL UTILITYU.S. EMERGING GROWTH FUND, INC.
THE GLOBAL GOVERNMENT PLUSPRUDENTIAL INVESTMENT PORTFOLIOS, INC.-PRUDENTIAL ACTIVE BALANCED FUND
INC
THE GLOBAL TOTAL RETURNPRUDENTIAL INVESTMENT PORTFOLIOS, INC.-PRUDENTIAL JENNISON
EQUITY OPPORTUNITY FUND
INC.
---------------------
ONE SEAPORT PLAZATHE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.-PRUDENTIAL JENNISON GROWTH FUND
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW YORK, NEW YORK 10292JERSEY 07102
------------------------
NOTICE OF
JOINT SPECIAL AND ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON
OCTOBER 30, 1996JANUARY 17, 2001
------------------------
TO THEOUR SHAREHOLDERS:
Joint meetings of the shareholders of each of the above-listed investment
companies (Funds)Funds (each,
a Meeting) will be held at One Seaport Plaza, 199 Waterthe offices of Prudential Investments Fund Management
LLC (PIFM), 100 Mulberry Street, 35thGateway Center Three, 14th Floor, Newark, New
York, New York,Jersey on October 30, 1996January 17, 2001 at 9:0010 a.m., Eastern time, for
thetime. The purpose of consideringthe Meetings
is to consider and act upon the following proposals with respect to the Funds:
(1)proposals:
1. For each Fund, to elect twelve members to its Board ofthirteen Directors or Trustees.
(2)2. For Prudential Equity20/20 Focus Fund, Prudential Natural Resources Fund,
Inc., Prudential Equity IncomeSector Funds, Inc.-Prudential Financial Services Fund,
-Prudential Technology Fund, and -Prudential Utility Fund, Prudential
Intermediate Global Income Fund, Inc., Prudential
Jennison Fund, Inc., Prudential Multi-Sector Fund, Inc., Prudential
Small CompaniesCompany Fund, Inc. and Prudential UtilityU.S. Emerging Growth Fund, Inc.,
to approve certaina new subadvisory agreement between PIFM and Jennison
Associates LLC.
3. For each Fund, to permit PIFM to enter into or make material changes to
subadvisory agreements without shareholder approval.
4. For each Fund, to approve an amendment to the Management Agreement to
permit PIFM to allocate assets among affiliated and unaffiliated
subadvisers.
5. For each Fund, to approve changes to certain of the Fund's fundamental
investment restrictions or policies, relating to the following:
(a) fund diversification
(b) issuing senior securities, borrowing money or restrictions.
(3)pledging assets
(c) buying and selling real estate
(d) buying and selling commodities and commodity contracts
(e) fund concentration
(f) engaging in underwriting
(g) making loans
(h) other investment restrictions
6. For Prudential Jennison Equity Opportunity Fund, to amend its investment
objective.
7. For each Fund, except Prudential Allocation Fund, to ratify the selection of PricewaterhouseCoopers LLP as
independent accountants for suchthe Fund's current fiscal year.
(4) For each Fund, to transact such other business as may properly
come before the meeting and any adjournments thereof.
For Prudential EquityNatural Resources Fund, Inc., Prudential Global Limited MaturitySector Funds, Inc.,
Prudential Small Company Fund, Inc., Prudential Intermediate Global IncomeTax-Managed Small-Cap Fund,
Inc., Prudential Jennison
Fund, Inc., Prudential Multi-Sector Fund, Inc., Prudential Small Companies Fund,
Inc., Prudential Utility Fund, Inc., The Global Government PlusU.S. Emerging Growth Fund, Inc. and The Global Total Return Fund,Prudential Investment
Portfolios, Inc., the meetingsMeetings will be the Funds' annual meetings. For
Prudential Allocation20/20 Focus Fund, Prudential Index Series Fund and Prudential
Equity Income Fund,Tax-Managed Funds, the meetings areMeetings will be special meetings.
You are entitled to vote at the meetings,Meeting, and at any adjournments thereof, of
each Fund in which you owned shares at the close of business on August 9,
1996.November 3,
2000. If you attend the meetings,a Meeting, you may vote your shares in person. IF YOU DO NOT
EXPECT TO ATTEND THE MEETINGS,MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN EACH
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
By order of the Boards.
S. JANE ROSEBoards,
Marguerite E. H. Morrison
SECRETARY
August 22, 1996
WHETHER OR NOT YOU EXPECT TO ATTENDDated: December 8, 2000
PROXY CARDS FOR YOUR FUND ARE ENCLOSED ALONG WITH THE MEETING,PROXY STATEMENT. PLEASE
SIGNVOTE YOUR SHARES TODAY BY SIGNING AND PROMPTLY RETURNRETURNING THE ENCLOSED PROXY(S)PROXY CARD IN THE
POSTAGE PREPAID ENVELOPE PROVIDED. YOU CAN ALSO VOTE YOUR SHARES THROUGH THE
INTERNET OR BY TELEPHONE USING THE 12-DIGIT "CONTROL" NUMBER THAT APPEARS ON THE
ENCLOSED SELF-ADDRESSED, STAMPED ENVELOPE. IN ORDER
TO AVOIDPROXY CARD AND FOLLOWING THE ADDITIONAL EXPENSE TOSIMPLE INSTRUCTIONS. THE FUNDSBOARD OF FURTHER SOLICITATION, WE ASK
YOUR
COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.FUND RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES AND "FOR" EACH PROPOSAL.
PRUDENTIAL ALLOCATION20/20 FOCUS FUND
PRUDENTIAL EQUITYINDEX SERIES FUND-PRUDENTIAL STOCK INDEX FUND
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL EQUITY INCOMESECTOR FUNDS, INC.-PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL GLOBAL LIMITED MATURITYSECTOR FUNDS, INC.-PRUDENTIAL HEALTH SCIENCES FUND
PRUDENTIAL SECTOR FUNDS, INC.-PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL SECTOR FUNDS, INC.-PRUDENTIAL UTILITY FUND
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL INTERMEDIATE GLOBAL INCOMETAX-MANAGED FUNDS-PRUDENTIAL TAX-MANAGED EQUITY FUND
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL JENNISON FUND, INC.
PRUDENTIAL MULTI-SECTOR FUND, INC.
PRUDENTIAL SMALL COMPANIES FUND, INC.
PRUDENTIAL UTILITYU.S. EMERGING GROWTH FUND, INC.
THE GLOBAL GOVERNMENT PLUSPRUDENTIAL INVESTMENT PORTFOLIOS, INC.-PRUDENTIAL ACTIVE BALANCED FUND
INC.
THE GLOBAL TOTAL RETURNPRUDENTIAL INVESTMENT PORTFOLIOS, INC.-PRUDENTIAL JENNISON
EQUITY OPPORTUNITY FUND
INC.
------------------------
ONE SEAPORT PLAZATHE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.-PRUDENTIAL JENNISON GROWTH FUND
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW YORK, NEW YORK 10292
(800) 225-1852JERSEY 07102
------------------------
PROXY STATEMENT
JOINT SPECIAL AND ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 30, 1996JANUARY 17, 2001
------------------------
This proxy statement is being furnished to holders of Sharesshares of each of the
above-listed investment companies (Funds) in connection with the solicitation by
their respective Boards of proxies to be used at joint meetings (Meetings) of
Shareholdersshareholders to be held at One Seaport Plaza, 199 WaterGateway Center Three, 100 Mulberry Street, 35th14th
Floor, Newark, New York, New YorkJersey 07102 on October 30, 1996,January 17, 2001, at 9:10:00 a.m., Eastern
time, or any adjournment or adjournments thereof. For Prudential EquityNatural
Resources Fund, Inc., Prudential Global Limited MaturitySector Funds, Inc., Prudential Small Company
Fund, Inc., Prudential Intermediate Global
IncomeTax-Managed Small-Cap Fund, Inc., Prudential Jennison Fund, Inc., Prudential Multi-Sector Fund,
Inc., Prudential Small Companies Fund, Inc., Prudential Utility Fund, Inc., The
Global Government PlusU.S.
Emerging Growth Fund, Inc. and The Global Total Return Fund,Prudential Investment Portfolios, Inc., the
Meetings are the Funds' Annual Meetings of Shareholders.will be annual meetings. For Prudential Allocation20/20 Focus Fund, Prudential
Index Series Fund and Prudential Equity Income Fund,Tax-Managed Funds, the Meetings are Special
Meetings.will be special
meetings. This proxy statement is being first mailed to Shareholdersshareholders on or about
August 26, 1996.December 11, 2000.
Each Fund is a registered, management investment company under the
Investment Company Act of 1940, as amended (the Investment Company1940 Act), or series thereof,
and is organized as a Maryland corporation, except for Prudential Allocation20/20 Focus
Fund, Prudential Index Series Fund and Prudential Equity Income Fund,Tax-Managed Funds, which are
organized as MassachusettsDelaware business trusts. Each Fund's shares of common stock, in
the case of Maryland corporations, or shares of beneficial interest, in the case
of MassachusettsDelaware business trusts, are referred to as "Shares," and the holders of the
Shares are "Shareholders";"Shareholders," each Fund's board of directors or trustees is
referred to as a "Board," and the directors or trustees are "Board Members" or
"Directors" or "Trustees," as the case may be.be (collectively referred to as
Directors). A listing of the formal name for each Fund, the
abbreviated name for each Fund that is used in this proxy statement and the
proposals applicable to each Fund are set forth below.
PROPOSALS
ABBREVIATED NAME USED IN APPLICABLE
FUND NAME THIS PROXY STATEMENTNAME TO FUND
- ----------------------------------------------------------------------- ------------------------------------ ------------------ -----------
Prudential Allocation Fund............................................. Allocation 120/20 Focus Fund................................. 20/20 Focus 1,2,3,4,5,7
Prudential Index Series Fund-
Prudential Stock Index Fund............................... Stock Index 1,3,4,5,7
Prudential Natural Resources Fund, Inc...................... Natural Resources 1,2,3,4,5,7
Prudential Sector Funds, Inc.-
Prudential Financial Services Fund........................ Financial Services 1,2,3,4,5,7
Prudential Sector Funds, Inc.-
Prudential Health Sciences Fund........................... Health Sciences 1,3,4,5,7
Prudential Sector Funds, Inc.-
Prudential Technology Fund................................ Technology 1,2,3,4,5,7
Prudential Sector Funds, Inc.-
Prudential Utility Fund................................... Utility 1,2,3,4,5,7
Prudential Small Company Fund, Inc.......................... Small Company 1,2,3,4,5,7
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund........................ Tax Equity 1,3,4,5,7
Prudential Tax-Managed Small-Cap Fund, Inc............................................ Equity 1, 2 and 3Inc.................. Tax Small-Cap 1,3,4,5,7
Prudential Equity Income Fund.......................................... Equity Income 1, 2 and 3U.S. Emerging Growth Fund, Inc................... Emerging Growth 1,2,3,4,5,7
The Prudential Global Limited Maturity Fund, Inc........................... Global Limited Maturity 1 and 3Investment Portfolios, Inc.
Prudential Intermediate Global Income Fund, Inc........................ Intermediate Global 1, 2 and 3Active Balanced Fund........................... Active Balanced 1,3,4,5,7
The Prudential Investment Portfolios, Inc.
Prudential Jennison Fund, Inc..........................................Equity Opportunity Fund............... Equity Opportunity 1,3,4,5,6,7
The Prudential Investment Portfolios, Inc.
Prudential Jennison 1, 2 and 3
Prudential Multi-Sector Fund, Inc...................................... Multi-Sector 1, 2 and 3
Prudential Small Companies Fund, Inc................................... Small Companies 1, 2 and 3
(formerly Prudential Growth Opportunity Fund, Inc.)
Prudential Utility Fund, Inc........................................... Utility 1, 2 and 3
The Global Government Plus Fund, Inc................................... Global Government 1 and 3
The Global Total Return Fund, Inc...................................... Global Total Return 1 and 3Fund........................... Growth 1,3,4,5,7
1
Prudential MutualInvestments Fund Management Inc. (PMFLLC (PIFM or the Manager), One Seaport
Plaza,Gateway
Center Three, 100 Mulberry Street, Newark, New York, New York 10292,Jersey 07102, serves as the
Funds' Manager under a management agreement with each Fund (the Management
Agreement). Investment advisory services arehave been provided to each Fund (except
Jennison)the Equity Opportunity and Growth Funds) by PMFPIFM through its affiliate, The
Prudential Investment Corporation (PIC), Prudential Plaza, 751 Broad Street,
Newark, New Jersey 07102, under a Subadvisory Agreement. Investment advisory
services arehave been provided to Jennisonthe 20/20 Focus and Health Sciences Funds (as to
approximately half of their assets), Equity Opportunity and Growth Funds by PMFPIFM
through its affiliate, Jennison Associates Capital Corp. (Jennison Associates)LLC (Jennison), 466 Lexington Avenue,
New York, New York 10017, under a Subadvisory Agreement. PIFM, PIC and Jennison Associates are
referred to herein as the Subadviser, as appropriate. PMF, PIC and Jennison
Associates
are subsidiaries of The Prudential Insurance Company of America (Prudential) and
are part of Prudential's MoneyPrudential Asset Management Group.Holding Company. Prudential Securities Incorporated (Prudential Securities)Investment
Management Services LLC (PIMS or the Distributor), One Seaport Plaza,Gateway Center Three, 100
Mulberry Street, Newark, New York,
New York 10292,Jersey 07102, serves as the distributor of the
Funds' shares. The Funds' transfer agent is Prudential Mutual Fund Services Inc.LLC
(PMFS), Raritan Plaza
One, Edison,194 Wood Avenue South, Iselin, New Jersey 08837.08830. As of June 30, 1996, PMFOctober 31, 2000,
PIFM served as the manager to 3948 open-end investment companies and as manager or
administrator to 2221 closed-end investment companies with aggregate assets of
more than $52$74.7 billion.
As part of a corporate restructuring, PMF intends to reorganize as a limited
liability company on or before December 31, 1996. This reorganization will have
no impact on the provision of services to the Funds. This reorganization will
not result in a change in management or control within the meaning of the
Investment Company Act and does not require Shareholder approval. Each Fund has a Board of Directors or Trustees which, in addition
to overseeing the actions of the Fund's Manager and Subadviser (PIC or
Jennison), decides upon matters of general policy.
2
VOTING INFORMATION
For each Fund, theThe presence, in person or by proxy, of a majority (for Prudential Sector
Funds, Inc. and Prudential Small Company Fund, Inc.), 40% (for Prudential 20/20
Focus Fund, Prudential Index Series Fund and Prudential Tax-Managed Funds) or
1/3 (for Prudential Natural Resources Fund, Inc., Prudential Tax-Managed
Small-Cap Fund, Inc., Prudential U.S. Emerging Growth Fund, Inc. and The
Prudential Investment Portfolios, Inc.) of the Shares of the Fund outstanding
and entitled to vote will constitute a quorum for the transaction of business at
the Meetings.
If a quorum is not present at a Meeting, or if a quorum is present at that
Meeting but sufficient votes to approve any of the proposalsProposals are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any adjournment will require the
affirmative vote of a majority of those Shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies which
they are entitled to vote FOR any proposalProposal in favor of the adjournment and will
vote those proxies required to be voted AGAINST any proposalProposal against the
adjournment. A Shareholdershareholder vote may be taken on one or more of the proposalsProposals in
this proxy statement prior to any such adjournment if sufficient votes have been
received and it is otherwise appropriate.
If a proxy that is properly executed and returned is accompanied by
instructions to withhold authority to vote (an abstention) or represents a
broker "non-vote" (that is, a proxy from a broker or nominee indicating that
such person has not received instructions from the beneficial owner or other
person entitled to vote Shares on a particular matter with respect to which the
broker or nominee does not have discretionary power), the Shares represented
thereby, with respect to matters to be determined by a majority or plurality of
the votes cast on such matters, will be considered present for purposes of
determining the existence of a quorum for the transaction of business, but, not
being cast, will have no effect on the outcome of such matters. With respect to
matters requiring the affirmative vote of a specified percentage of the total
Shares outstanding, an abstention or broker non-vote will be considered present
for purposes of determining a quorum but will have the effect of a vote against
such matters. Accordingly, abstentions and broker non-votes will have no effect
on Proposals Nos.No. 1 and 3,7, for which the required vote is a plurality or majority
of the votes cast, but effectively will be a vote against adjournment and
against Proposal No. 2,the other Proposals, which requiresrequire approval of a majority of the
outstanding voting securities under the Investment Company1940 Act.
The individuals named as proxies on the enclosed proxy cards will vote in
accordance with your direction as indicated thereon, if your proxy card is received
properly executed by you or by your duly appointed agent or attorney-in-fact. If
your card is properly executed and you give no voting instructions, your Shares
will be voted FOR the nominees named herein for the Board of the Fund to which
the proxy card relates and FOR the remaining proposalsProposals described in this proxy
statement and referenced on the proxy card. If any nominee for the Fund Boards
should withdraw or otherwise become unavailable for election, your Shares will
be voted in favor of such other nominee or nominees as management may recommend.
You
2
may revoke any proxy card by giving another proxy or by letter or telegram
revoking the initial proxy. To be effective your revocation must be received by
the Fund prior to the related Meeting and must indicate your name and account
number. In addition, if you attend a Meeting in person you may, if you wish,
vote by ballot at that Meeting, thereby canceling any proxy previously given.
3
The close of business on August 9, 1996November 3, 2000 has been fixed as the record date
for the determination of Shareholdersshareholders entitled to notice of, and to vote at, the
Meetings. Information as to the number of outstanding Shares for each Fund as of
the record date is set forth below:
NUMBER OF NUMBER OF NUMBER OF NUMBER OF TOTAL
CLASS A CLASS B CLASS C CLASS Z TOTAL NUMBER
SHARES SHARES SHARES SHARES OF SHARES
FUND OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING
- --------------------------------------- ------------- ----------------- ------------ ----------- ----------- ----------- ------------ -------------
Prudential Allocation Fund
Balanced Portfolio................... 22,056,230 35,568,442 309,248 343,724 58,277,644
Strategy Portfolio................... 8,315,373 19,409,150 61,480 N/A 27,786,003
Prudential20/20 Focus...................... 20,668,391 52,713,110 10,663,108 4,141,165 88,185,774
Active Balanced.................. 1,414,770 1,401,333 217,053 10,544,828 13,577,984
Emerging Growth.................. 73,327,648 95,318,348 12,785,600 119,468,232 300,899,828
Equity Fund, Inc............ 71,358,558 144,091,807 2,320,064 7,219,032 224,989,461
Prudential Equity Income Fund.......... 63,046,818 20,972,144 513,009 2,837,559 87,369,530
Prudential Global Limited Maturity
Fund, Inc............................. 7,144,793 6,597,948 93 N/A 13,742,834
Prudential Intermediate Global Income
Fund, Inc............................. 19,772,380 1,786,080 14,475 N/A 21,572,935
Prudential Jennison Fund, Inc.......... 8,042,071 20,438,070 1,401,410 1,223,657 31,105,208
Prudential Multi-Sector Fund, Inc...... 15,390,098 16,876,976 370,847 1,416,808 34,054,729
PrudentialOpportunity............... 4,663,918 7,526,286 950,647 1,439,250 14,580,101
Financial Services............... 2,572,539 6,971,061 3,654,034 864,652 14,062,286
Growth........................... 11,169,188 17,093,901 3,346,307 2,983,638 34,593,034
Health Sciences.................. 4,707,370 12,032,735 5,101,189 1,623,436 23,464,730
Natural Resources................ 2,029,954 2,764,670 194,142 294,773 5,283,539
Small Companies Fund,
Inc................................... 15,098,855 26,279,187 279,751 4,490,599 46,148,392
Prudential Utility Fund, Inc........... 202,772,175 173,749,673 435,994 3,040,946 379,998,788
The Global Government Plus Fund,
Inc................................... 18,737,136 3,721 1,518 N/A 18,742,375
The Global Total Return Fund, Inc...... 30,934,273 5,262 24 N/A 30,939,559Company.................... 20,038,963 15,031,514 1,497,292 6,913,154 43,480,923
Stock Index...................... 945,255 2,343,359 1,120,069 31,197,315 35,605,998
Tax Equity....................... 7,455,891 17,544,612 10,729,214 1,479,912 37,209,629
Tax Small-Cap.................... 2,481,865 6,489,738 798,648 116,350 9,886,601
Technology....................... 9,301,129 19,910,293 7,221,299 1,406,406 37,839,127
Utility.......................... 251,615,978 66,679,459 2,525,316 4,763,084 325,583,837
None of the items on the agendaProposals require separate voting by class. Proposals No. 1 and
7 require approval by a majority or a plurality of shareholders of all series of
a Fund voting together. Each shareShare of each class is entitled to one vote. To the
knowledge of management, the executive officers and Board Members of each Fund,
as a group, owned less than 1% of the outstanding Shares of each Fund as of
August 9, 1996.November 3, 2000. A listing of persons who owned beneficially 5% or more of the
Shares of any Fund as of August
9, 1996November 3, 2000 is contained in Appendix I.Exhibit A.
COPIES OF EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS OR ARE
ENCLOSED WITH THIS PROXY STATEMENT.SHAREHOLDERS.
SHAREHOLDERS OF ANY FUND MAY OBTAIN WITHOUT CHARGE ADDITIONAL COPIES OF ATHE
FUND'S ANNUAL AND SEMI-ANNUAL REPORTS BY WRITING THE FUND AT ONE SEAPORT PLAZA,GATEWAY CENTER
THREE, 100 MULBERRY STREET, 4TH FLOOR, NEWARK, NEW YORK, NEW YORK 10292,JERSEY 07102, OR BY CALLING
1-800-225-1852 (TOLL FREE).
Each full Share of each Fund outstanding is entitled to one vote, and each
fractional Share of each Fund outstanding is entitled to a proportionate share
of one vote, with respect to each matter to be voted upon by the Shareholdersshareholders of
that Fund. Information about the vote necessary with respect to each proposalProposal is
discussed below in connection with the proposal.
------------------------
ELECTION OFProposal.
TO ELECT DIRECTORS OR TRUSTEES
PROPOSAL NO. 1
RELEVANTTHIS PROPOSAL APPLIES TO ALL OF THE FUNDS.
All Funds.
DISCUSSION:DISCUSSION. The Board of each Fund has acted to expand its membership and
has nominated the twelve13 individuals
identified below for election to the
relatedeach Fund's Board at its Meeting.Board. Under Proposal 3
No. 1,
Shareholdersshareholders of each Fund are being asked to vote on thosethese nominees. Pertinent
information about each nominee is set forth in the listing below and in
Exhibits AB through DE hereto. Each nomineeof the nominees has indicated a willingness to
serve if elected. Except as to Natural Resources, all of the nominees are
currently Directors; Messrs. Fenster, McCorkindale, McDonald, Mooney, Munn,
Redeker and Weil are not currently Directors of Natural Resources. All of the
Directors have previously been elected by shareholders of the other Funds,
except for Ms. Rice and Messrs. Fenster, McDonald and Odenath. If elected, each
nominee will hold office until the earlier to occur of (a) the next meeting of
Shareholdersshareholders at which Board Members are elected and until their successors are
elected and
4
qualified or (b) until their terms expire in accordance with the Funds'Fund's
retirement policy. The Funds do not intend to hold
annual meetings of shareholders unless the election of Directors or Trustees is
required under the Investment Company Act. Accordingly, Board Members elected at
the Meeting will serve for a term of unlimited duration until their terms expire
in accordance with the Funds' retirement policy or until the next meeting of
shareholders, whichever is earlier. The Funds'Each Fund's retirement policy generally calls for the
retirement of Directors or Trustees on December 31 of the year in which they reach the age
of 72, except that there75.
Currently, each Board Member who is a phase-in period for Board
Members who were 68 and older as of December 31, 1993. Under this phase-in
period, such Board Members will retire on or before December 31, 1999.
The increase in the size of the Boards and the nomination of a single group
of nominees to serve as the Board Members for each Fund reflects an overall plan
to coordinate and enhance the efficiency of the governance of the Funds and of
certain other investment companies that are part of the Prudential Mutual Fund
Complex. This plan was developed by an advisory group of current Board Members
who are not "interested persons" of the Funds, as defined in the Investment
Company Act (independent Board Members),affiliated with the assistance of representatives
of PMF, who formedManager, a
corporate governance task force. The Advisory Group
considered various matters related toSubadviser or the management and governance of the Funds
and made recommendations to the Boards, including proposals concerning the
number of mutual fund boards, the size and composition of such Boards,
retirement policies and related matters. These proposals were adopted by the
Boards at meetings in November 1995 and during the first quarter of 1996, and
are summarized below. The Boards acted in 1996 to establish the size of the
Boards at twelve. The nomineesDistributor (an Independent Board Member or Independent
Directors, as applicable) is paid annual fees as set forth below for independent Board memberships were selected
by the nominating committees ofhis or her
service on the Board of each Fund. With the exceptionDirectors' fees are allocated among all of
the nominations forFunds in a "cluster" (here, the equity funds) based on their proportionate
net assets. In addition, an Independent Board membership, which areMember who serves on the subject of Proposal No. 1,
no Shareholder actionExecutive
Committee is required with respect topaid by the Advisory Group
recommendations. If all nominees are elected, some Funds will have more Board
Members than they currently have. Notwithstanding this increase in the numbercluster an annual aggregate fee of Board Members, it is anticipated that, on a Fund by Fund basis, Directors'$8,000
and Trustees' fees in the aggregate will not be higher for the most part than they
currently are. Board fees are reviewed periodically by each Fund's Board and may
be changed in the future.
The Boards believe that coordinated governance through this Board
restructuring will benefit each of the Funds. Despite some recent
consolidations, the Prudential Mutual Fund Complex has grown substantially in
size in the years since many of the current Boards were created. This growth has
been due to the creation of new Funds intended to serve a wide variety of
investment needs. The Advisory Group concluded that the Prudential Mutual Fund
Complex would operate more efficiently and economically with fewer boards. The
Prudential Mutual Fund Complex currently includes over 70 portfolios of open-end
and closed-end funds having a wide variety of investment objectives and policies
with over 12 different boards (clusters). The Advisory Group recommended that
the number of Board clusters be reduced from the present level to four. The
proposed Board cluster covered by this proxy statement would include domestic
equity and global debt funds. The other Board clusters would focus on other
types of investments. The Boards believe that the Funds will benefit from having
Board Members focus on the issues relating to these types of Funds and to
investing in these types of securities. The Boards believe that greater
efficiencies would result through the holding of joint Board and Shareholder
meetings. Coordinated governance within the Prudential Mutual Fund Complex also
will reduce the possibility that separate Boards might arrive at conflicting
decisions regarding the operation and management of the Funds.
The Boards also believe that the Funds will benefit from the diversity and
experience of the nominees that would comprise the restructured Boards. These
nominees have had distinguished careers in business, finance, government and
other areas and will bring a wide range of expertise to the Boards. Nine of the
twelve nominees have no affiliation with PMF, Prudential Securities or
Prudential and would be independent Board Members.an Independent Board Members are
charged with special responsibilities, among other things, to approve advisory,
distribution and similar agreements betweenMember who chairs the Audit or Nominating Committee is
paid by those Funds and management.
4
Currently, they also constitute the membersan annual aggregate fee of the Boards' audit and nominating
committees. In the course of their duties, Board Members must review and
understand large amounts of financial and technical material and must be willing
to devote substantial amounts of time to their duties. Due to the demands of
service on the Boards, independent nominees may need to reject other attractive
opportunities. Each of the independent nominees already serves as an independent
Board Member for one or more funds within the Prudential Mutual Fund Complex and
understands the operations of the complex.
As recommended by the Advisory Group, the compensation paid to independent
Board Members will change. The Advisory Group has recommended that, initially,
under the new structure, each independent Board Member be paid annual fees in
the aggregate of $45,000 for this Fund cluster. There will be no additional
compensation for serving on committees or for attending meetings. For the most
part, on a Fund by Fund basis, Directors' and Trustees' fees in the aggregate
will not be higher than they are currently.$2,000 per Committee. Board
Members affiliated with PMF,
Prudential SecuritiesPIFM or theirits affiliates will continue to receive no
compensation from any Fund. Board Members will continue to be reimbursed for any
expenses incurred in attending meetings and for other incidental expenses. The
Board
fees per Fund and per cluster are subject to the approval of the new
Boards upon their election; Shareholders are not being asked to vote on these
fees. Thereafter, Board fees may be reviewed periodically by each Fund's Board.
The following table shows (i)sets forth information relating to the compensation paid
to Board Members (i) specifically by each Fund to each
Board Member and nominee forduring the most recentFund's last fiscal
year and (ii) in the compensation paid byaggregate for all funds in the Prudential Mutual Fund
Complex to each Board Member and
nominee for the calendar year ended December 31, 1995. Interested Board Members
do not receive any compensation from the Funds.1999:
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM FUNDS
COMPENSATION TABLE
GLOBALTAX
BOARD MEMBERS AND STOCK INVESTMENT NATURAL SMALL TAX SMALL- EMERGING 20/20
NOMINEES INDEX PORTFOLIOS RESOURCES COMPANY SECTOR EQUITY LIMITED INTERMEDIATE SMALL
NOMINEES ALLOCATION EQUITY INCOME MATURITY GLOBAL JENNISON MULTI-SECTOR COMPANIES UTILITYCAP GROWTH FOCUS
- ------------------------------------------ -------- ---------- --------------- --------- ------ -------- ------------ -------- ------------ --------- ---------------
Beach, Edward D.......... $8,500 $7,500 $7,500 -- -- -- $7,500 -- --
Dorsey, Eugene C*D.*........ -- $7,500 -- -- -- $7,500 -- -- --
Eyre, Stephen C*......... -- -- -- $10,000 -- -- -- -- --
Fortune, Robert R.*...... -- -- -- -- -- -- -- --$1,225 $ 9,0003,225 $ 650 $ 425 $6,500 $1,550 $1,050 $1,850 $2,150
Fenster, Saul K.......... $ 375 $ 1,117 $ 0 $ 0 $ 0 $ 150 $ 108 $ 192 $ 0
Gold, Delayne D.......... -- $7,500 -- $10,000 -- -- -- $6,200 $ 9,000$6,600 $12,575 $1,800 $1,825 $6,500 $1,550 $1,050 $1,850 $2,150
Gunia, Robert F.(1)...... -- -- -- -- -- -- -- -- --
Hauspurg, Arthur*........ -- -- -- -- -- -- -- $6,000 --
Hoff, Don G.*............ -- -- -- $10,000 -- -- -- -- --
Jacobs, Jr., Harry A.
(1)...................... -- $ 0 -- $ 0 -- -- -- -- $ 0
Knafel, Sidney R*........ -- -- -- $10,000 -- -- -- -- --
LaBlanc, Robert E.*...... -- -- -- $10,000 -- -- -- -- --
Lennox, Donald D......... $8,500 -- $7,500 -- -- -- $7,500 -- --
McCorkindale, Douglas
H........................ $8,500 -- $7,500 -- -- -- $7,500 -- --
Melzer, Mendel A.(1)..... -- -- -- -- -- -- -- -- --
Mooney, Thomas T......... $8,500 $7,500 $7,500 -- -- -- $7,500 -- --
Munn, Stephen P.......... -- -- -- -- -- -- -- $6,000 --
O'Brien, Thomas H.*...... -- $7,500 -- -- -- -- -- -- --
Owens, Jr., Thomas A.*... -- -- -- $10,000 $7,500 -- -- -- $ 9,000
Redeker, Richard A.(1)... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Sandberg, Sir Michael*... -- -- -- -- -- -- -- -- --McCorkindale,
Douglas H.(3).......... $6,600 $12,575 $ 0 $1,825 $6,500 $1,550 $1,050 $1,850 $2,150
McDonald, Jr., W.
Scott.................. $ 375 $ 1,117 $ 0 $ 0 $ 0 $ 150 $ 108 $ 192 $ 0
Mooney, Thomas T.(3)..... $6,600 $12,575 $ 0 $1,825 $6,500 $1,550 $1,050 $1,850 $2,150
Munn, Stephen P.......... $7,050 $13,575 $ 0 $1,925 $6,700 $1,650 $1,125 $2,025 $2,200
Odenath, Jr.,
David R.(1)............ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Redeker, Richard A....... $6,600 $12,575 $ 0 $1,825 $6,500 $1,550 $1,050 $1,850 $2,150
Rice, Judy A.(1)......... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Smith, Robin B........... -- -- -- -- -- $7,500 -- -- --
Stahl, Gerald A.*........ -- -- -- -- $7,500 -- -- -- --
Stoneburn, Stephen*...... -- -- -- -- $7,500 -- -- -- --
Teeters, Nancy H.*B.(3)....... -- $7,500 -- -- -- -- -- -- --$6,600 $12,575 $1,825 $1,825 $6,500 $1,550 $1,050 $1,850 $2,150
Weil, III, Louis A. ..... $8,500 -- $7,500 -- -- -- $7,500 $6,000 --
Wellington, Robert H.*... -- -- -- -- $7,500 -- -- -- --
Welshans, Merle T*....... -- -- -- -- -- -- -- --A....... $6,600 $12,575 $ 9,0000 $1,825 $6,500 $1,550 $1,050 $1,850 $2,150
Whitehead, Clay T........ -- -- -- $10,000 -- -- -- -- --$7,600 $14,500 $1,800 $2,100 $6,900 $1,800 $1,200 $2,100 $2,250
TOTAL 19951999
COMPENSATION
PAID TO BOARD
MEMBERS FROM
GLOBAL FUNDS AND
BOARD MEMBERS AND GLOBAL TOTALFUNDS AND FUND
NOMINEES GOVERNMENT RETURN COMPLEX (2)
- ------------------------- ---------- ------- ----------------------------- ---------------
Beach, Edward D.......... $18,750 $18,500 $183,500(22/43)D.*........ $142,500 (43/70)+
Dorsey, Eugene C*........ -- --Fenster, Saul K.......... $ 85,783(10/34)+
Eyre, Stephen C*......... -- -- $ 41,000(4/5)+
Fortune, Robert R.*...... -- -- $ 20,250(3/3)35,000 (5/21)+
Gold, Delayne D.......... -- -- $183,250(24/45)$144,500 (43/70)+
Gunia, Robert F.(1)...... -- -- --
Hauspurg, Arthur*........ -- -- $ 37,500(5/7)0
McCorkindale,
Douglas H.(3).......... $ 80,000 (24/49)+
Hoff, Don G.*............ -- -- $ 50,625(5/6)+
Jacobs,McDonald, Jr., Harry A.
(1)......................W.
Scott.................. $ 0 $ 0 $ 0
Knafel, Sidney R*........ -- -- $ 35,500(4/5)35,000 (5/21)+
LaBlanc, Robert E.*...... -- -- $ 35,500(4/5)+
Lennox, Donald D......... $18,750 -- $ 86,250(10/22)+
McCorkindale, Douglas
H........................ $18,750 -- $ 63,750(7/10)+
Melzer, Mendel A.(1)..... -- -- --
Mooney, Thomas T......... $18,750 $18,500 $125,625(14/19)T.(3)..... $129,500 (35/75)+
Munn, Stephen P.......... -- -- $ 39,375(6/8)62,250 (19/53)+
O'Brien, Thomas H.*...... -- -- $ 44,000(6/24)+
Owens,Odenath, Jr.,
Thomas A.*... -- --David R.(1)............ $ 87,000(12/13)+0
Redeker, Richard A....... $ 95,000 (29/53)+
Rice, Judy A.(1)............ $ 0
$ 0 $ 0
Sandberg, Sir Michael*... -- $18,500 $ 22,000(2/2)+
Smith, Robin B........... -- $18,500 $100,741(10/19)+
Stahl, Gerald A.*........ -- --B.(3)....... $ 11,875(2/2)+
Stoneburn, Stephen*...... -- -- $ 44,875(7/7)+
Teeters, Nancy H.*....... -- $18,500 $107,500(13/31)96,000 (32/44)+
Weil, III, Louis A. ..... $18,750 --A....... $ 93,750(11/16)+
Wellington, Robert H.*... -- -- $ 19,000(3/3)+
Welshans, Merle T*....... -- -- $ 16,500(3/3)96,000 (29/53)+
Whitehead, Clay T........ -- -- $ 35,500(4/5)77,000 (38/66)+
- --------------------------------------------------
* Indicates Board Member who is not standing for re-election to this cluster.has since retired.
+ Indicates number of funds/portfolios in Fund Complex (including the Fund)Funds)
to which aggregate compensation relates.
(1) RichardRobert F. Gunia, David R. Odenath, Jr. and Judy A. Redeker and Harry A. Jacobs, Jr.,Rice, who are
"interested" Board Members, do not receive compensation from the Funds. Mr. Jacobs is not
standing for re-election. Messrs. Gunia and MelzerFunds or
Fund Complex. All other Board Members listed above are not currentdeemed to be
independent Board Members.
(2) No fund within the Fund Complex has a bonus, pension, profit sharing or
retirement plan.
5
In connection with the Advisory Group recommendations for a restructuring(3) Total compensation from all of the Prudential Mutual Fund Boards, PMF offered to pay from its own resources a
one-time retirement package to the independent Board Members. The purpose of the
one-time retirement package was to reduce the overall number of Board Membersfunds in the Prudential Mutual Fund Complex. The retirement package would be equalComplex for the
calendar year ended December 31, 1999, includes amounts deferred at the
election of Directors under the funds' deferred compensation plans.
Including accrued interest, total compensation amounted to twice the current aggregate Board fees but not to exceed $75,000 per
Director/Trustee plus $2,000approximately
$97,915 for every year of service in excess of ten years.
Retirement would be effective in late 1996 or early 1997 after the Shareholder
Meetings. On a complex-wide basis, fourteen independent Board Members have
accepted this offerDouglas H. McCorkindale, $135,101 for Thomas T. Mooney and
are not standing$156,477 for re-election to any Fund's Board. On
a complex-wide basis, there will be seventeen Board Members who are not
affiliated with PMF or Prudential Securities standing for re-election to one or
more of the four Fund clusters.Robin B. Smith.
5
Board Members may elect to receive their Directors' or Trustees' fees pursuant to a deferred fee
agreement with each Fund. Under the terms of the agreement, the Fund accrues
daily the amount of suchthe Board Member's fee in installments whichthat accrue interest
at a rate equivalent to the prevailing rate applicable to 90-day U.S. Treasury
Bills at the beginning of each calendar quarter or, pursuant to an exemptive
order of the Securities and Exchange Commission (SEC), at the daily rate of
return of any Fund within the applicableFund Complex regardless of whether the Director
serves on the Board of that Fund. Payment of the accrued interest so accruedalso is also
deferred and accruals become payable at the option of the Board Member. TheA Fund's
obligation to make payments of deferred Directors' and Trustees' fees, together with interest
thereon, is a general obligation of the Fund.
The nominees for election as Board Members, their ages and a description of
their principal occupations are listed below. The business address of the
Directors and officers is c/o Prudential Investments Fund Management LLC,
Gateway Center Three, 100 Mulberry Street, 14th Floor, Newark, New Jersey
07102-4077, Attention: Lesley L. Mann. Further information about the nominees or current
Board Members standing for reelection is set forth in Exhibits A and B.B through E. A table indicating each
nominee'sDirector's ownership of Fund Shares is attached as Exhibit B.
NAME, AGE, BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND DIRECTORSHIPS.
EDWARD D. BEACH (71), President and Director of BMC Fund, Inc., a
closed-end investment company; prior thereto, Vice Chairman of Broyhill
Furniture Industries, Inc.; Certified Public Accountant; Secretary and Treasurer
of Broyhill Family Foundation, Inc.; Member of the Board of Trustees of Mars
Hill College; President and Director of FirstC.
NOMINEE (AGE) PRINCIPAL OCCUPATION*
- ------------- ----------------------------------------------------------
Saul K. Fenster (67)............ President, New Jersey Institute of Technology;
Commissioner of the Middle States Association, Commission
on Higher Education; Member of the New Jersey Commission
on Science and Technology; formerly director or trustee of
the New Jersey State Chamber of Commerce, Society of
Manufacturing Engineering Education Foundation, the
Research and Development Council of New Jersey, Prosperity
New Jersey, Inc., the Edison Partnership, National Action
Council for Minorities in Engineering, and IDT
Corporation.
Delayne D. Gold (63)............ Marketing and Management Consultant.
Robert F. Gunia** (53).......... Executive Vice President and Chief Administrative Officer
(since June 1999) of Prudential Investments, a business
unit of Prudential; Executive Vice President and Treasurer
(since December 1996) of PIFM; President (since April
1999) of PIMS; Corporate Vice President (since September
1997) of The Prudential Insurance Company of America
(Prudential); formerly Senior Vice President (March
1987-May 1999) of Prudential Securities; Director (January
1989-September 1996), Executive Vice President -- Finance
and Administration, Treasurer and Chief Financial Officer
(June 1987-December 1996) of Prudential Mutual Fund
Management, Inc.
Douglas H. McCorkindale (61).... Chairman (since June 2000) and President (since September
1997) of Gannett Co. Inc. (publishing and media);
President and Chief Executive Officer (since August 2000)
of Central Newspapers, Inc.; formerly Vice Chairman (March
1984-May 2000) of Gannett Co. Inc.; Director of Gannett
Co. Inc., Global Crossing Ltd. and Continental
Airlines, Inc.
and The High
Yield Plus Fund, Inc.; President and Director of Global Utility Fund, Inc.;
Director of The Global Government Plus Fund, Inc., The Global Total Return Fund,
Inc., Prudential Equity Fund, Inc., Prudential Global Genesis Fund, Inc.,
Prudential Government Income Fund, Inc., Prudential Mortgage Income Fund, Inc.,
Prudential Multi-Sector Fund, Inc., Prudential Natural Resources Fund, Inc. and
Prudential Special Money Market Fund, Inc.; Trustee of The BlackRock Government
Income Trust, Command Government Fund, Command Money Fund, Command Tax-Free
Fund, Prudential Allocation Fund, Prudential California Municipal Fund,
Prudential Equity Income Fund, Prudential Municipal Bond Fund and Prudential
Municipal Series Fund.
DELAYNE DEDRICK GOLD (58), Marketing and Management Consultant; Director of
Prudential Distressed Securities Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Global Limited Maturity Fund, Inc., Prudential Government Income
Fund, Inc., Prudential High Yield Fund, Inc., Prudential MoneyMart Assets, Inc.,
Prudential Mortgage Income Fund, Inc., Prudential National Municipals Fund,
Inc., Prudential Pacific Growth Fund, Inc., Prudential Small Companies Fund,
Inc., Prudential Special Money Market Fund, Inc., Prudential Structured Maturity
Fund, Inc., Prudential Tax-Free Money Fund, Inc., Prudential Utility Fund, Inc.
and Prudential World Fund, Inc.; Trustee of The BlackRock Government Income
Trust, Command Government Fund, Command Money Fund, Command Tax-Free Fund,
Prudential California Municipal Fund, Prudential Government Securities Trust and
Prudential Municipal Series Fund.
6
*ROBERT F. GUNIA (49), Director, Chief Administrative Officer, Executive
Vice President, Treasurer and Chief Financial Officer of PMF; Comptroller
NOMINEE (AGE) PRINCIPAL OCCUPATION*
- ------------- ----------------------------------------------------------
W. Scott McDonald, Jr. (63)..... Vice President (since 1997), Kaludis Consulting
Group, Inc. (a Sallie Mae company serving higher
education); formerly principal (1993-1997), Scott
McDonald & Associates, Chief Operating Officer
(1991-1995), Fairleigh Dickinson University, Executive
Vice President and Chief Operating Officer (1975-1991),
Drew University, interim President (1988-1990), Drew
University and founding director of School, College and
University Underwriters Ltd.
Thomas T. Mooney (58)........... President of the Greater Rochester Metro Chamber of
Commerce; former Rochester City Manager; former Deputy
Monroe County Executive; Trustee of Center for
Governmental Research, Inc.; Director of Blue Cross of
Rochester, Monroe County Water Authority and Executive
Service Corps of Rochester.
Stephen P. Munn (58)............ Chairman, Director and President and former Chief
Executive Officer, Carlisle Companies Incorporated
(manufacturer of industrial products).
David R. Odenath, Jr.** (43).... President (since June 1999) of Prudential Investments;
Officer in Charge, President, Chief Executive Officer and
Chief Operating Officer (since June 1999) of PIFM; Senior
Vice President (since June 1999) of Prudential; formerly
Senior Vice President (August 1993-May 1999) of
PaineWebber Group, Inc.
Richard A. Redeker (57)......... Former employee of Prudential Investments (October
1996-December 1998); prior thereto, President, Chief
Executive Officer and Director (October 1993-September
1996) of Prudential Mutual Fund Management, Inc.;
Executive Vice President, Director and Member of the
Operating Committee (October 1993-September 1996) of
Prudential Securities; Director (October 1993-September
1996) of Prudential Securities Group, Inc.; Executive Vice
President, PIC (January 1994-September 1996); Director
(January 1994-September 1996) of Prudential Mutual Fund
Distributors, Inc. and Prudential Mutual Fund
Services, Inc.
Judy A. Rice**(52).............. Executive Vice President (since 1999) of Prudential
Investments; Executive Vice President (since 1999) of
PIFM; formerly various positions to Senior Vice President
(1992-1999) of Prudential Securities; and various
positions to Managing Director (1975-1992) of Shearson
Lehman Advisors; Governor of the Money Management
Institute and member of the Prudential Securities
Operating Council and the National Association of Variable
Annuities.
Robin B. Smith (61)............. Chairman and Chief Executive Officer (since August 1996),
formerly President and Chief Executive Officer (January
1988-August 1996) and President and Chief Operating
Officer (January 1988-August 1996) of Publishers Clearing
House; Director of BellSouth Corporation, Texaco Inc.,
Spring Industries Inc. and Kmart Corporation.
7
NOMINEE (AGE) PRINCIPAL OCCUPATION*
- ------------- ----------------------------------------------------------
Louis A. Weil, III (59)......... Former Chairman (January 1999-July 2000), President and
Chief Executive Officer (January 1996-July 2000) and
Director (September 1991-July 2000) of Central
Newspapers, Inc.; former Chairman of the Board (January
1996-July 2000), Publisher and Chief Executive Officer
(August 1991-December 1995) of Phoenix Newspapers, Inc.
Clay T. Whitehead (62).......... President of National Exchange Inc. (new business
development firm).
- ------------------------
* Except as otherwise indicated, each individual has held the Money Management Group of Prudential (since 1996); Senior Vice President of
Prudential Securities; Vice President and Director of Nicholas-Applegate Fund,
Inc. and The Asia Pacific Fund, Inc.
DONALD D. LENNOX (77), Chairman (since February 1990) and Director (since
April 1989) of International Imaging Materials, Inc.(thermal transfer ribbon
manufacturer); Retired Chairman, Chief Executive Officer and Director of
Schlegel Corporation (industrial manufacturing) (March 1987 - February 1989);
Director of Gleason Corporation, Personal Sound Technologies, Inc., The Global
Government Plus Fund, Inc., The High Yield Income Fund, Inc., Prudential Global
Genesis Fund, Inc., Prudential Institutional Liquidity Portfolio, Inc.,
Prudential Multi-Sector Fund, Inc. and Prudential Natural Resources Fund, Inc.;
Trustee of Prudential Allocation Fund, Prudential Equity Income Fund, Prudential
Municipal Bond Fund and The Target Portfolio Trust.
DOUGLAS H. MCCORKINDALE (57), Vice Chairman, Gannett Co. Inc. (publishing
and media) (since March 1984); Director of Gannett Co. Inc., Frontier
Corporation, Continental Airlines, Inc., The Global Government Plus Fund, Inc.,
Prudential Distressed Securities Fund, Inc., Prudential Global Genesis Fund,
Inc., Prudential Multi-Sector Fund, Inc. and Prudential Natural Resources Fund,
Inc.; Trustee of Prudential Allocation Fund, Prudential Equity Income Fund and
Prudential Municipal Bond Fund.
*MENDEL A. MELZER (35), Chief Financial Officer (since November 1995) ofoffice shown or
other offices in the Money Management Group of Prudential; formerly Senior Vice President and
Chief Financial Officer of Prudential Preferred Financial Services (April 1993 -
November 1995); Managing Director of Prudential Investment Advisors (April 1991
- -April 1993); Senior Vice President of Prudential Capital Corporation (July 1989
- -April 1991); Chairman and Director of Prudential Series Fund, Inc.
THOMAS T. MOONEY (54), President ofsame company for the Greater Rochester Metro Chamber of
Commerce; former Rochester City Manager; Trustee of Center for Governmental
Research, Inc.; Director of Blue Cross of Rochester, Monroe County Water
Authority, Rochester Jobs, Inc., Executive Service Corps of Rochester, Monroe
County Industrial Development Corporation, Northeast Midwest Institute, The
Business Council of New York State, First Financial Fund, Inc., The Global
Government Plus Fund, Inc., The Global Total Return Fund, Inc., The Global Total
Return Fund, Inc., Global Utility Fund, Inc., The High Yield Plus Fund, Inc.,
Prudential Distressed Securities Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Global Genesis Fund, Inc., Prudential Government Income Fund, Inc.,
Prudential Mortgage Income Fund, Inc., Prudential Multi-Sector Fund, Inc. and
Prudential Natural Resources Fund, Inc.; Trustee of Prudential Allocation Fund,
Prudential California Municipal Fund, Prudential Equity Income Fund, Prudential
Municipal Bond Fund and Prudential Municipal Series Fund.
STEPHEN P. MUNN (54), Chairman (since January 1994), Director and President
(since 1988) and Chief Executive Officer (1988 - December 1993) of Carlisle
Companies Incorporated (manufacturer of industrial products); Director of
Prudential Distressed Securities Fund, Inc., Prudential Government Securities
Trust, Prudential High Yield Fund, Inc., Prudential National Municipals Fund,
Inc., Prudential Small Companies Fund, Inc. and Prudential Tax-Free Money Fund,
Inc.
* RICHARD A. REDEKER (53), President, Chief Executive Officer and Director
(since October 1993) of PMF; Executive Vice President, Director and Member of
the Operating Committee (since October 1993), Prudential Securities; Director
(since October 1993) of Prudential Securities Group, Inc; formerly Senior
Executive Vice President and Director of Kemper Financial Services, Inc.
(September 1978 - September 1993); Director of The Global Government Plus Fund,
Inc., The Global Total Return Fund, Inc., Global Utility Fund, Inc., The High
Yield Income Fund, Inc., Prudential Distressed Securities Fund, Inc., Prudential
Diversified Bond Fund, Inc., Prudential Equity Fund, Inc., Prudential Europe
Growth Fund, Inc., Prudential Global Genesis Fund, Inc., Prudential Global
Limited Maturity Fund, Inc., Prudential Government Income Fund, Inc., Prudential
High Yield Fund, Inc., Prudential Institutional Liquidity Portfolio, Inc.,
Prudential
- --------------
*last five years.
** Is or will be an "interested" Director, or Trustee, as defined in the Investment Company1940 Act, by reason of his or
her affiliation with PMF,PIFM, Prudential Securities or Prudential.
7
Intermediate Global Income Fund, Inc., Prudential Jennison Fund, Inc.,
Prudential MoneyMart Assets, Inc., Prudential Mortgage Income Fund, Inc.,
Prudential Multi-Sector Fund, Inc., Prudential National Municipals Fund, Inc.,
Prudential Natural Resources Fund, Inc., Prudential Pacific Growth Fund, Inc.,
Prudential Small Companies Fund, Inc., Prudential Special Money Market Fund,
Inc., Prudential Structured Maturity Fund, Inc., Prudential Tax-Free Money Fund,
Inc., Prudential Utility Fund, Inc. and Prudential World Fund, Inc.; Trustee of
Command Government Fund, Command Money Fund, Command Tax-Free Fund, Prudential
Allocation Fund, Prudential California Municipal Fund, Prudential Equity Income
Fund, Prudential Government Securities Trust, Prudential Municipal Bond Fund,
Prudential Municipal Series Fund and The Target Portfolio Trust.**
ROBIN B. SMITH (57), Chairman (since August 1996) and Chief Executive
Officer (since January 1988), formerly President (September 1981 - August 1996)
of Publishers Clearing House; Director of BellSouth Corporation, The Omnicom
Group, Inc., Texaco Inc., Spring Industries Inc., First Financial Fund, Inc.,
The Global Total Return Fund Inc., The High Yield Income Fund, Inc., The High
Yield Plus Fund, Inc., Global Utility Fund, Inc., Prudential Distressed
Securities Fund, Inc., Prudential Diversified Bond Fund, Inc., Prudential Europe
Growth Fund, Inc., Prudential Jennison Fund, Inc. and Prudential Institutional
Liquidity Portfolio, Inc.; Trustee of The Target Portfolio Trust.
LOUIS A. WEIL, III (55), President and Chief Executive Officer (since
January 1996) and Director (since September 1991) of Central Newspapers, Inc.;
Chairman of the Board (since January 1996), Publisher and Chief Executive
Officer (August 1991 - December 1995) of Phoenix Newspapers, Inc.; formerly
Publisher of Time Magazine (May 1989 - March 1991); formerly President,
Publisher & CEO of The Detroit News (February 1986 - August 1989); formerly
member of the Advisory Board, Chase Manhattan Bank-Westchester; and Director of
The Global Government Plus Fund, Inc., Prudential Distressed Securities Fund,
Inc., Prudential Global Genesis Fund, Inc., Prudential High Yield Fund, Inc.,
Prudential Multi-Sector Fund, Inc., Prudential National Municipals Fund, Inc.,
Prudential Natural Resources Fund, Inc., Prudential Small Companies Fund, Inc.
and Prudential Tax-Free Money Fund, Inc.; Trustee of Prudential Allocation Fund,
Prudential Equity Income Fund, Prudential Government Securities Trust and
Prudential Municipal Bond Fund.
CLAY T. WHITEHEAD (57), President of National Exchange Inc. (new business
development firm) (since May 1983); Director of Prudential Distressed Securities
Fund, Inc., Prudential Global Limited Maturity Fund, Inc., Prudential Pacific
Growth Fund, Inc. and Prudential World Fund, Inc.
Each Fund has a Nominating Committee and an Audit Committee, the members of
which are the independentIndependent Board Members. TheAmong other things, the Audit Committee
makes
recommendations tohas the following responsibilities:
- Advising the Board with respect to the engagementselection, retention or
termination, as appropriate, of independent
accountants and reviews with the independent public accountants for the
planFund.
- Reviewing the independent public accountants' compensation and resultsthe
proposed terms of their engagement.
- Monitoring the independence of the audit engagement and matters having a material effect upon the Fund'sindependent public accountants.
- Reviewing annual financial operations.statements.
The Nominating Committee makes recommendations to the Board with respect to
candidates for election as Board Members. The Nominating Committee does not
consider nominees recommended by Shareholdersshareholders to fill vacancies on the Board.
The activities of the Nominating Committee also include:
- Reviewing the independence of Independent Directors then serving on the
Board.
- Recommending to the Board the Independent Directors to be selected for
membership on the various Board Committees.
- Reviewing and making recommendations to the Board of Directors concerning
Director compensation and expenses, including:
-annual Director fees
-supplemental compensation for Committee service
-supplemental compensation for serving as a Committee Chair
-Board or Committee meeting attendance fees
-expense reimbursement
Information about the number of Board and Committee meetings held during the
most recent fiscal year ended for each Fund is included in Exhibit C.D. Information
concerning Fund officers is set forth in Exhibit D.E.
REQUIRED VOTE.VOTE
The nominees receiving the affirmative vote of a majority (for Prudential
Sector Funds, Inc. and Prudential Small Company Fund, Inc.) or a plurality (for
Prudential 20/20 Focus Fund, Prudential Index Series Fund, Prudential Natural
Resources Fund, Inc., Prudential Tax-Managed Funds, Prudential Tax-Managed
Small-Cap Fund, Inc., Prudential U.S. Emerging Growth Fund, Inc. and The
Prudential Investment Portfolios, Inc.) of the votes cast for the election of Board Members will be elected,
provided a quorum is present.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT SHAREHOLDERSYOU
VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL NO. 1.
- --------------
** Mr. Redeker8
TO APPROVE NEW SUBADVISORY AGREEMENTS BETWEEN PIFM AND JENNISON
PROPOSAL NO. 2
THIS PROPOSAL APPLIES TO THE FOLLOWING FUNDS:
20/20 FOCUS
EMERGING GROWTH
FINANCIAL SERVICES
NATURAL RESOURCES
SMALL COMPANY
TECHNOLOGY
UTILITY
BACKGROUND
The Boards of each of the Funds listed above, including the Independent
Directors, has resigned as Presidentapproved, and Chief Executive Officerrecommend that the shareholders of each Fund
approve, the adoption of a subadvisory agreement between PIFM and DirectorJennison.
Subadvisory services for these Funds have historically been performed by PIC,
except that approximately half of PMF effective20/20 Focus Fund's portfolio (the growth
segment) historically was subadvised by Jennison. PIFM, Jennison and PIC are all
indirect wholly-owned subsidiaries of Prudential.
Due to a broad restructuring of equity investment management within
Prudential, including the transfer of investment advisory duties for equity
management from PIC to Jennison, each applicable Fund's shareholders are being
asked to approve a new subadvisory agreement between PIFM and Jennison. This
transition is occurring incrementally and we anticipate that the majority of the
equity funds that have been subadvised by PIC will be subadvised by Jennison on
or before December 31, 1996. Although he will no
longer oversee the operations2000. Most of the Manager on a day-to-day basis, it is
anticipatedportfolio managers that Mr. Redeker will remain associated with PMF and Prudentialhave served the
Funds while being subadvised by PIC are moving to Jennison and will continue to
serve as the Funds' portfolio managers.
The combining of substantially all subadvisory duties for equity management
into Jennison is intended to provide your Funds with the investment capabilities
available from Jennison. More information about Jennison's history and its
management team appears on page 13 of this proxy statement.
Completion of the transition of subadvisory services from PIC to Jennison
may constitute an "assignment" (as that term is defined in the 1940 Act) of the
current subadvisory agreements between PIC and PIFM. As required by the 1940
Act, the subadvisory agreements with PIC provide for their automatic termination
in the event of an assignment. Therefore, shareholders will need to approve the
proposed new subadvisory agreements between PIFM and Jennison in order for
Jennison to continue to provide subadvisory services to the Funds. A copy of the
new form of subadvisory agreement for each Fund is attached as Exhibit F. THE
NEW SUBADVISORY AGREEMENT FOR EACH FUND IS THE SAME IN EVERY MATERIAL RESPECT AS
THE FUND'S SUBADVISORY AGREEMENT WITH PIC, except as to the date of the
agreement and the identity of the Subadviser (Jennison rather than PIC) and, as
to 20/20 Focus, Jennison will provide subadvisory services for the entire
portfolio.
Pending shareholder approval of these new subadvisory agreements, each
Fund's Board approved an interim subadvisory agreement between PIFM and
Jennison. During the period from the date that portfolio management moved from
PIC to Jennison, until shareholders approve a new subadvisory agreement with
Jennison, PIFM is placing into an escrow account fees for subadvisory services
that Jennison is performing for each Fund. The rate of the subadvisory fees
being placed in escrow is the same as the fees PIC received for acting as
subadviser to the Funds. Each Fund's subadvisory fees will be retained in escrow
and will not be paid to Jennison, unless and until that Fund's shareholders
approve the new subadvisory agreement.
9
Because the move from PIC to Jennison is being made pursuant to a corporate
restructuring within Prudential and most of the portfolio managers will remain
the same, the transition to Jennison should not result in any changes in the
day-to-day operations of your Fund or the investment process used in managing
your Fund. In addition, the transition will not cause any change to your Fund's
investment objective or investment restrictions and policies (except as
shareholders may approve, as discussed in Proposals 5(a) through 5(h) of this
proxy statement).
SUBADVISORY AGREEMENTS WITH PIC
PIFM has entered into a subadvisory agreement with PIC for each of the Funds
to which this Proposal relates. Each subadvisory agreement provides that PIC
will furnish investment advisory services in connection with the management of
the Fund. In connection with those services, PIC is obligated to keep certain
books and records of the Fund. Pursuant to PIFM's Management Agreement with each
Fund, PIFM continues to have responsibility for all investment advisory
services.
Each Fund's subadvisory agreement provides that PIC will not be liable for
any error of judgment or for any loss suffered by the Fund in connection with
matters to which the subadvisory agreement relates, except a loss resulting from
willful misfeasance, bad faith, gross negligence or reckless disregard of
duties. Each subadvisory agreement also provides that it will terminate in the
event of its assignment (as defined in the 1940 Act) or upon the termination of
the Management Agreement between the Fund and PIFM. Each subadvisory agreement
may be terminated by the Fund, PIFM or PIC on not more than 60 days', nor less
than 30 days', written notice.
The table below lists the compensation paid to PIC by PIFM under its
subadvisory agreements for the subadvisory services performed for each Fund, as
well as the date of each subadvisory agreement with PIC, and the date on which
each agreement was last submitted to shareholders for approval.
DATE
SUBADVISORY
SUBADVISORY AGREEMENT FEE PAID TO PIC
AGREEMENT SUBMITTED TO (% OF AVERAGE DAILY NET
FUND DATE(1) SHAREHOLDERS ASSETS)(2)
- ---- ----------- ------------ -----------------------
20/20 Focus (Value Segment)...................... 04-27-98 04-27-98 0.375%
Emerging Growth.................................. 10-12-96 10-25-96 0.300%
Financial Services (Strategically Managed 05-17-99 05-18-99 0.375%
Segment).......................................
Natural Resources................................ 03-01-88 02-19-88 0.375%
Small Company.................................... 01-31-89 04-28-88 0.455%
Technology (Strategically Managed Segment)....... 05-17-99 05-18-99 0.375%
Utility Fund..................................... 05-02-88 03-29-88 0.300% to $250 mil.
0.238% next $500 mil.
0.203% next $750 mil.
0.170% next $500 mil.
0.140% next $2 bil.
0.122% next $2 bil.
0.105% over $6 bil.
- ------------------------
(1) Each subadvisory agreement was amended effective January 1, 2000 to provide
for the payment of compensation by PIFM to PIC based on, in the case of
20/20 Focus, Financial Services and Technology Funds, a percentage of the
average daily net assets of the segment of the Fund managed by PIC, and for
every other Fund, a percentage of the average daily net assets of the Fund.
The percentage rate applicable to each Fund is set forth in the last column
of this table.
(2) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the Funds.
10
The table below sets forth the total fees paid by the relevant Funds to PIFM
and the total fees received by PIC from PIFM for subadvisory services performed
by PIC for each Fund during the last fiscal year:
FISCAL FEE RECEIVED
YEAR FEE PAID TO BY PIC FROM
FUND ENDED PIFM PIFM(a)
- ---- -------- ----------- ------------
20/20 Focus (Value Segment).............................. 01-31-00 $ 7,071,654 $ --
Emerging Growth.......................................... 10-31-00 $ 1,202,452 $1,093,861
Financial Services (Strategically Managed Segment)....... 11-30-99 $ 302,913(b) $ --
Natural Resources........................................ 05-31-00 $ 575,291 $ 117,520
Small Company............................................ 09-30-00 $ 6,749,959 $1,872,654
Technology (Strategically Managed Segment)............... 11-30-99 $ 631,240(b) $ --
Utility.................................................. 11-30-99 $16,318,008(b) $ --
- ------------------------
(a) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the Funds. Each
subadvisory agreement between PIFM and the Funds was amended effective
January 1, 2000 to provide for the payment of compensation by PIFM based on
a percentage of the average daily net assets of each Fund (or portion
thereof). The percentage rate applicable to each Fund is set forth in the
table on page 10. For Funds with fiscal years ending after January 1, 2000,
the dollar amount shown in the column "Fee Received by PIC From PIFM" is the
fees paid by PIFM to PIC from January 1, 2000 through the fiscal year end of
the indicated Fund.
(b) "Fee Paid to PIFM" is for the period 6/30/99 (commencement of operations)
through 11/30/99 for Financial Services and Technology Funds and for the
eleven months ended 11/30/99 for Utility Fund.
The table below lists the equity mutual funds with capital appreciation as
their investment objective that are currently advised by Jennison, the size of
each fund, and the rate of compensation received by Jennison for the investment
advisory services it provides for each fund:
FUND NET FEE PAID TO JENNISON
ASSETS AS OF (% OF AVERAGE DAILY NET
FUND 9/30/00 ASSETS)
- ---- -------------- ------------------------
20/20 Focus (Growth Segment)........................ $1,103,845,923 0.30% to $300 mil.
0.25% over $300 mil.
Equity Opportunity.................................. $ 203,988,926 0.30% to $300 mil.
0.25% over $300 mil.
Growth.............................................. $7,261,778,258 0.30% to $300 mil.
0.25% over $300 mil.
Health Sciences (Strategically Managed Segment)..... $ 417,769,862 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Diversified Funds -- Prudential
Diversified Conservative Growth (Growth
Segment).......................................... $ 74,772,996 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Diversified Funds -- Prudential
Diversified Moderate Growth (Growth Segment)...... $ 191,302,761 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Diversified Funds -- Prudential
Diversified High Growth (Growth Segment).......... $ 158,801,150 0.30% to $300 mil.
0.25% over $300 mil.
Strategic Partners Series -- Strategic Partners
Focused Growth Fund (Jennison Segment)............ $ 397,850,630 0.30% to $300 mil.
0.25% over $300 mil.
11
FUND NET FEE PAID TO JENNISON
ASSETS AS OF (% OF AVERAGE DAILY NET
FUND 9/30/00 ASSETS)
- ---- -------------- ------------------------
Prudential World Fund, Inc. -- Prudential Jennison
International Growth Fund......................... $ 316,914,445 0.60% to $300 mil.
0.50% next $1.2 bil.
0.45% over $1.5 bil.
Harbor Fund -- Harbor Capital Appreciation Fund..... $9,514,000,000 0.75% to $10 mil.
0.50% next $30 mil.
0.35% next $25 mil.
0.25% next $335 mil.
0.22% next $600 mil.
0.20% over $1 bil.
0.25% over $5 bil.
Harbor Fund --
Harbor International Growth Fund.................. $ 1,313,000 0.50% of first $1.5 bil.
0.45% next $2 bil.
0.40% on balance
Masters' Select Funds Trust --
The Masters Select Equity Fund(1)................. $ 96,356,000 0.75% to $10 mil.
0.50% next $30 mil.
0.35% on next $25 mil.
0.25% on next $335 mil.
0.22% on next $600 mil.
0.20% over $1 bil.
Seasons Series Trust -- Focus Growth Portfolio(1)... $ 51,321,000 0.40%
SunAmerica Style Select Series, Inc. -- Focus
Portfolio(1)...................................... $ 554,575,000 0.40%
SunAmerica Style Select Series, Inc. --
Large-Cap Growth Portfolio(1)..................... $ 43,548,000 0.30% to $300 mil.
0.25% over $300 mil.
The Hirtle Callaghan Trust --
The Growth Equity Portfolio(1).................... $ 176,981,000 0.30%
The Preferred Group of Mutual Funds --
Preferred Growth Fund............................. $ 804,265,000 0.75% first $10 mil.
0.50% next $30 mil.
0.35% next $25 mil.
0.25% next $335 mil.
0.22% next $600 mil.
0.20% over $1 bil.
EQ Advisors Trust -- EQ/Balanced Portfolio(1)....... $ 239,592,000 0.35%
Ohio National Funds -- Capital Appreciation
Portfolio......................................... $ 64,926,000 0.75% first $10 mil.
0.50% next $30 mil.
0.35% next $25 mil.
0.25% next $335 mil.
0.22% next $600 mil.
0.20% over $1 bil.
- ------------------------
(1) Jennison provides subadvisory services for only one segment of this fund.
Fund net asset figures identify only the portion of total fund net assets
for which Jennison provides subadvisory services.
12
THE PROPOSED NEW SUBADVISORY AGREEMENT WITH JENNISON
Jennison, located at 466 Lexington Avenue, New York, NY 10017, is a
wholly-owned subsidiary of PIC. PIC is a wholly-owned subsidiary of Prudential
Asset Management Holding Company (PAMHCo), which is a wholly-owned subsidiary of
Prudential. The address for PIC and PAMHCo is Gateway Center Three, 100 Mulberry
Street, Newark, NJ 07102. Jennison has provided investment advisory services to
registered investment companies since 1990.
Under the proposed subadvisory agreements, Jennison would provide investment
advisory services to each Fund pursuant to an agreement with PIFM. The
agreements between PIFM and Jennison will be identical in all material respects
(other than as indicated on page 9) to the subadvisory agreements between PIFM
and PIC. This means that Jennison will be subject to the same terms and
conditions as are applicable to PIC under its agreements with PIFM.
The table below lists the name and principal occupation of the principal
executive officers and each director of Jennison. The address of each person is
466 Lexington Avenue, New York, NY 10017.
MICHAEL A. DEL BALSO-Director since 1998, Executive Vice President, Jennison,
since 1998; prior to 1998, various positions to Senior Vice President, Jennison
Associates Capital Corp.
MARY-JANE FLAHERTY-Director since 2000. Managing Director, Strategic
Initiatives, PIC, since December 1998; prior to December 1998, various positions
to Chief Financial Officer, PIC, and various positions to Vice President,
Prudential.
JOHN H. HOBBS-Chairman since 1998. Chief Executive Officer, Jennison, since
1998; prior to 1998, various positions to Chairman and Chief Executive Officer,
Jennison Associates Capital Corp.
KAREN E. KOHLER-Director since 1998. Executive Vice President, Jennison, since
2000. Treasurer, Jennison, since 1999. Chief Compliance Officer and Director,
Jennison, since 1998; prior to 1998, various positions to Senior Vice President,
Chief Compliance Officer, Jennison Associates Capital Corp.
KATHLEEN A. MCCARRAGHER-Director since 1998. Executive Vice President, Jennison,
since 1998. 1992-1998, Managing Director, Weis, Peck & Greer LLC.
PHILIP N. RUSSO-Director since 2000. Vice President and Director, PIC, since
1999; Vice President, Prudential, since 1997; prior to 1997, Managing Director,
Bankers Trust Company.
SPIROS SEGALAS-Director since 1998. President and Chief Investment Officer,
Jennison, since 1998. Prior to 1998, various positions to President and Chief
Investment Officer, Jennison Associates Capital Corp.
VICTOR SIM-Director since 2000. Vice President, Prudential, since 1997.
JOHN R. STRANGFELD-Director since 2000. Chief Executive Officer of Prudential
Securities since October 2000, Executive Vice President since February 1998 of
Prudential; Chief Executive Officer, Chairman, President and Director since
January 1999 of PIC; Chairman since August 1989 of Pricoa Capital Group; prior
to 1998, various positions to Chief Executive Officer, Private Asset Management
Group of Prudential.
KEVEN C. UEBELEIN-Director since 2000. Senior Managing Director, Mergers &
Acquisitions, PIC, since 2000; prior to 2000, various positions to Managing
Director, New Products, Private Asset Management Group, Prudential.
BERNARD B. WINOGRAD-Director since 2000. Chief Executive Officer, Prudential
Real Estate Investors, since December 1986; Senior Vice President and Director,
PIC, since December 1996; prior to December 1996, The Taubman Company LLC.
RELATIONSHIP TO PROPOSALS NO. 3 AND 4
As part of the overall restructuring of the management of each Fund,
Proposals No. 3 and 4 request shareholder approval (1) to permit the Manager to
enter into or make material changes to subadvisory
13
agreements, and (2) to amend the management contracts between PIFM and each
Fund. In brief, Proposal No. 3, if adopted, would permit PIFM, upon Board
approval, to retain new subadvisers or to materially alter its contracts with
existing subadvisers without first obtaining shareholder approval. Proposal
No. 4, if adopted, would permit PIFM, again with Board approval, to allocate the
assets of each Fund among both affiliated and unaffiliated subadvisers under a
"Manager-of-Managers" structure. Please refer to the explanations accompanying
Proposals No. 3 and 4 for more information on each of these Proposals.
Although shareholder approval is also being requested for Proposals No. 3
and 4, THE ADOPTION OF PROPOSAL NO. 2 IS NOT CONTINGENT ON SHAREHOLDER APPROVAL
OF EITHER PROPOSAL NO. 3 OR PROPOSAL NO. 4. This means that if shareholders do
not approve either Proposal No. 3 or Proposal No. 4, but do vote "For" Proposal
No. 2, PIFM will implement the new subadvisory agreements with Jennison. If
Proposal No. 2 is not approved, Jennison will receive the lesser of the
subadvisory fees paid into escrow under the interim subadvisory agreements, plus
interest, or the costs incurred by Jennison in performing the interim contract,
plus interest.
MATTERS CONSIDERED BY THE BOARDS
The proposal to present the proposed new subadvisory agreements with
Jennison was approved by the Boards of each Fund, including the Independent
Directors, on August 22, 2000. The Board Members received materials relating to
the proposed agreements in advance of the meeting at which the proposed
subadvisory agreements were considered, and had the opportunity to ask questions
and request further information in connection with such consideration. The
Boards considered that the rate of fees to be paid to Jennison by PIFM are the
same as the existing fee arrangement with PIC, and that the rate of fees paid by
the Funds would not increase. The Boards also considered that it is appropriate
to enter into new subadvisory agreements for these Funds in light of the
transition of the majority of equity management from PIC to Jennison. The Boards
gave primary consideration to Jennison's strong, stable management and the
results of Jennison's growth investing style when the Boards determined to
approve the new subadvisory agreements with Jennison.
REQUIRED VOTE
A Fund's approval of Proposal No. 2 requires approval by a majority of the
outstanding voting securities of the Fund, as defined by the 1940 Act. For
purposes of the 1940 Act, a majority of a Fund's outstanding voting securities
is the lesser of (i) 67% of the Fund's outstanding voting securities represented
at a meeting at which more than 50% of the Fund's outstanding voting securities
are present in person or represented by proxy, or (ii) more than 50% of the
Fund's outstanding voting securities. If Proposal No. 2 is approved by the
shareholders of a particular Fund, Proposal No. 2 will be effective for that
Fund as described above, regardless of whether shareholders of another Fund
approve Proposal No. 2.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL NO. 2.
14
TO APPROVE A PROPOSAL TO PERMIT THE MANAGER TO ENTER INTO, OR MAKE MATERIAL
CHANGES TO, SUBADVISORY AGREEMENTS
PROPOSAL NO. 3
THIS PROPOSAL APPLIES TO ALL OF THE FUNDS.
The Board of each Fund has approved, and recommends that shareholders
approve, Proposal No. 3, which would permit PIFM to enter into subadvisory
agreements with new subadvisers to the Fund, or make material amendments to
subadvisory agreements with existing subadvisers to the Fund, without obtaining
shareholder approval. THIS IS CALLED A "MANAGER-OF-MANAGERS" STRUCTURE AND, IN
THE FUTURE, MAY BE USED TO MANAGE EACH FUND. THIS NEW STRUCTURE WOULD NOT CHANGE
THE RATE OF ADVISORY FEES CHARGED TO A FUND. Information concerning each Fund's
current management arrangements, including a description of the Fund's current
subadvisory agreements, is contained in Proposal No. 2. If shareholders approve
Proposal No. 3 so that shareholder approval of new or amended subadvisory
agreements is no longer required, the Directors of a Fund, including a majority
of the Independent Directors, must continue to approve these agreements in order
for them to take effect. On August 22, 2000, the Board of each Fund, including
the Independent Directors, discussed and approved Proposal No. 3 at an in-person
meeting.
Proposal No. 3 is being submitted to shareholders pursuant to the
requirements of an exemptive order obtained from the SEC in September 1996 (the
Original Order). The Original Order grants relief to The Target Portfolio Trust
(for which PIFM acts as a Manager-of-Managers) and other Prudential Mutual Funds
from certain provisions of the 1940 Act and certain rules thereunder.
Specifically, the Original Order permits PIFM to enter into or amend a
subadvisory agreement with a subadviser that is not otherwise an affiliated
person (as defined in the 1940 Act) of PIFM. Among other things, the Original
Order permits PIFM to enter into (1) a new subadvisory agreement that is
necessitated due to an "assignment" (as defined in the 1940 Act), (2) an
amendment to a subadvisory agreement, or (3) a new subadvisory agreement
substituting a new subadviser for an old subadviser. The Funds are seeking
confirmation from the staff of the Division of Investment Management of the SEC
(the Staff) that the Original Order applies to the Funds as well as to The
Target Portfolio Trust and other Prudential Mutual Funds.
In addition, the Funds currently intend to seek an order (the Proposed
Order) from the SEC permitting PIFM, with Board approval, and without further
shareholder approval, to (1) hire one or more new affiliated subadvisers and
(2) amend existing agreements with affiliated subadvisers. In their request for
relief, the Funds may also ask the SEC to amend the Original Order to permit the
replacement of an unaffiliated subadviser with an affiliated subadviser and to
replace an affiliated adviser with a different affiliated adviser, all with
prior Board approval. The Funds also may seek an amended order from the SEC
permitting them not to disclose the fee rates paid to specific subadvisers
because that may permit PIFM to hire subadvisers at lower fees. With this
Proposal, the Funds seek your approval for any such arrangement if approved by
the SEC. The Funds will, of course, comply with any conditions imposed by the
SEC under any amended order.
WHY SHAREHOLDER APPROVAL IS BEING SOUGHT
Section 15 of the 1940 Act makes it unlawful for any person to act as
investment adviser to an investment company, except pursuant to a written
contract that has been approved by shareholders. For purposes of Section 15, the
term "investment adviser" includes any subadviser to an investment company.
Section 15 also requires that an investment advisory agreement provide that it
will terminate automatically upon its assignment.
In conformity with Section 15 of the 1940 Act, a Fund currently would obtain
shareholder approval of subadvisory agreements in the following situations:
- (1) the employment by a Fund of a new subadviser to replace an existing
subadviser or (2) the allocation of a portion of assets to an additional
subadviser or the reallocation of portfolio assets among existing
subadvisers;
15
- a material change in the terms of a subadvisory agreement; and
- the continued employment of an existing subadviser on the same terms if
there has been or is expected to be an assignment of a subadvisory
agreement as a result of a change of control of the subadviser.
The 1940 Act does not require shareholder approval for the termination of a
subadvisory agreement if such termination is approved by a Fund's Board,
including its Independent Directors, although shareholders of the Fund may
terminate a subadvisory agreement at any time by a vote of a majority of its
outstanding voting securities, as defined in the 1940 Act.
DISCUSSION
Under the "Manager-of-Managers" structure, each Fund would continue to
employ PIFM, subject to the supervision of the Board, to manage or provide for
the management of each Fund. PIFM would select one or more subadvisers to invest
the assets of each Fund, subject to the review and approval of the Board.
(Currently, the selection of one or more subadvisers is subject to the approval
of the Fund's shareholders.) PIFM would review each subadviser's performance on
an ongoing basis. PIFM would be responsible for communicating performance
expectations and evaluations to subadvisers and for recommending to the Board
whether a subadviser's contract should be renewed, modified or terminated. PIFM
would continue to pay an advisory fee to each subadviser from the management
fee. Each Board believes that requiring a Fund's shareholders to approve changes
in subadvisers and subadvisory agreements (including continuation of subadvisory
agreements that otherwise would have terminated by virtue of an assignment) not
only results in unnecessary administrative expenses to the Fund, but also may
cause delays in executing changes that PIFM and the Board have determined are
necessary or desirable. Each Board believes that these expenses, and the
possibility of delays, may result in shareholders receiving less satisfactory
service than would be the case if Proposal No. 3 is implemented.
The kind of changes to subadvisory arrangements that could be effected
without further shareholder approval if Proposal No. 3 is approved include:
(1) reallocating Fund assets among existing subadvisers; (2) allocating a
portion of a Fund's assets to one or more additional subadvisers;
(3) continuing a subadvisory agreement where a change in control of the
subadviser automatically otherwise causes that agreement to terminate; and
(4) replacing an existing subadviser with a new subadviser when PIFM and the
Board determine that the new subadviser's investment philosophy and style, past
performance, security selection experience and preferences, personnel,
facilities, financial strength, quality of service and client communication are
more consistent with the best interests of the Fund and its shareholders. Each
Board believes that PIFM can effect the types of subadvisory changes described
above more efficiently, without sacrificing the quality of service to
shareholders, if the Funds were permitted to operate in the manner described in
Proposal No. 3. Each Board further believes that these gains in efficiency would
ultimately benefit each Fund and each of its shareholders.
PIFM is currently in the process of evaluating the management arrangements
for the Funds to determine which Funds would benefit from implementing a
Manager-of-Managers structure in place of the more traditional investment
advisory structure currently in effect. Although this process has not yet been
completed, to ensure maximum flexibility while seeking to minimize costs through
the use of a joint proxy statement, shareholders of each Fund are being asked to
approve the operation of their Fund in a Manager-of-Managers structure. Although
a Manager-of-Managers structure will be put into place for each Fund whose
shareholders approve Proposal No. 3, the Fund will not employ new subadvisers
pursuant to this structure unless and until PIFM and the Board determine that a
change in subadvisory arrangements is appropriate. In making these
determinations as to a Fund, PIFM intends to evaluate rigorously both affiliated
subadvisers and unaffiliated subadvisers according to objective and disciplined
standards.
16
Following shareholder approval of Proposal No. 3 and Proposals No. 2 and 4,
PIFM will continue to be each Fund's investment manager and Jennison, the
Prudential subsidiary primarily responsible for day-to-day management of
Prudential's equity funds, will continue to serve as subadviser for most of the
Funds. 8(Proposals No. 4 and 2 provide more information about PIFM and Jennison,
respectively.) Initially 100% of each equity Fund's assets will be subadvised by
Jennison (or PIC, in the case of Active Balanced, Tax Equity, Tax Small-Cap and
Stock Index Funds), except that the day-to-day management of Health Sciences
Fund's portfolio is divided between PIC and Jennison. PIFM does not currently
intend to recommend that any additional subadvisers be added, in light of
Jennison's strong performance record and other relevant factors. Each Board and
PIFM, under the Board's supervision, will continue to monitor the nature and
quality of Jennison's services and may, in the future, recommend additional
subadvisers or the reallocation of assets among Jennison and other subadvisers.
If one or more subadvisers are added to a Fund, PIFM will be responsible for
determining the allocation of assets among the subadvisers and will have the
flexibility to increase the allocation to any one subadviser to as much as 100%
and decrease the allocation to any one subadviser to as little as 0%, subject to
Board approval. The Manager-of-Managers structure that each Board is asking
shareholders to approve will give the Boards and PIFM the flexibility to appoint
additional subadvisers without shareholder approval, but it is possible that no
new subadvisers will be added.
If Proposal No. 3 is approved by a Fund's shareholders, those shareholders
no longer would be entitled to approve the selection of a new subadviser or a
material amendment to an existing subadvisory agreement. Instead, shareholders,
within 90 days of the change, would receive an information statement containing
substantially all of the information about the subadviser and the subadvisory
agreement that would otherwise be contained in a proxy statement. The
information statement would include disclosure as to the level of fees to be
paid to PIFM and each subadviser and would disclose subadviser changes or
changes in subadvisory agreements.
Each Board and PIFM have concluded that, through the information statement
and adherence to the conditions outlined below, shareholders of each Fund will
receive adequate disclosure about any new subadvisers or material amendments to
subadvisory agreements. Whether or not Proposal No. 3 is approved, amendments to
the Management Agreement between PIFM and each Fund would remain subject to the
shareholder and Board approval requirements of Section 15 of the 1940 Act and
related proxy disclosure requirements. Moreover, although PIFM and the Board
already generally may change the rate of fees payable to a subadviser without
shareholder approval, PIFM and the Board could not increase the rate of the
management fees payable by a Fund to PIFM or cause the Fund to pay subadvisory
fees directly to a subadviser without first obtaining shareholder approval.
For these reasons, each Board believes that approval of Proposal No. 3 to
permit PIFM and the Boards to enter into new subadvisory agreements or make
material changes to existing subadvisory agreements without shareholder approval
is in the best interests of the shareholders of the Funds.
CONDITIONS
If the Staff of the SEC confirms that the Original Order applies to the
Funds, the Original Order would grant relief from Section 15(a) of the 1940 Act
and certain rules thereunder in order for the Funds to operate in the manner
described in Proposal No. 3, subject to certain conditions, including approval
of Proposal No. 3 by shareholders of each Fund seeking to rely on the Original
Order. A Fund will not rely on the Original Order until all of the conditions
set forth below have been met.
As stated above, the Funds and PIFM intend to seek the Proposed Order, which
would expand the relief obtained under the Original Order to certain situations
involving affiliates of PIFM. There can be no assurance that the SEC will issue
the Proposed Order or that the SEC will not impose additional conditions on the
Funds.
17
APPROVALThe following are conditions for relief under the Original Order:
1. PIFM will provide general management and administrative services to
a Fund, including overall supervisory responsibility for the general
management and investment of the Fund's securities portfolio, and, subject
to review and approval by the Board, will (a) set the Fund's overall
investment strategies; (b) select subadvisers; (c) monitor and evaluate the
performance of subadvisers; (d) allocate and, when appropriate, reallocate
the Fund's assets among its subadvisers in those cases where the Fund has
more than one subadviser; and (e) implement procedures reasonably designed
to ensure that the subadvisers comply with the Fund's investment objectives,
policies, and restrictions.
2. Before a Fund may operate in the manner described in Proposal
No. 3, the Proposal must be approved by a majority of its outstanding voting
securities, as defined in the 1940 Act, or in the case of a new series of a
Fund whose public shareholders purchased shares on the basis of a prospectus
containing the disclosure contemplated by condition 4 below, by the sole
shareholder before the offering of shares of such series to the public.
[Approval of Proposal No. 3 would satisfy this condition.]
3. A Fund will furnish to shareholders all of the information about a
new subadviser or subadvisory agreement that would be included in a proxy
statement. This information will include any change in the disclosure caused
by the addition of a new subadviser or any material changes in a subadvisory
agreement. The Funds will meet this condition by providing shareholders with
an information statement complying with certain provisions of the Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder. With
respect to a newly retained subadviser, or a change in a subadvisory
agreement, the information statement will be provided to shareholders of a
Fund within a maximum of 90 days after the addition of the new subadviser or
the implementation of any material change in a subadvisory agreement.
4. A Fund will disclose in its prospectus the existence, substance and
effect of the Original Order.
5. No Director or officer of a Fund or director or officer of PIFM will
own directly or indirectly (other than through a pooled investment vehicle
that is not controlled by the Director or officer) any interest in any
subadviser except for (a) ownership of interests in PIFM or any entity that
controls, is controlled by or is under common control with PIFM, or
(ii) ownership of less than 1% of the outstanding securities of any class of
equity or debt of a publicly-traded company that is either a subadviser or
any entity that controls, is controlled by or is under common control with a
subadviser.
6. PIFM will not enter into a subadvisory agreement with any subadviser
that is an "affiliated person" (as defined in the 1940 Act) of a Fund or
PIFM other than by reason of serving as a subadviser to the Fund (an
Affiliated Subadviser) without such agreement, including the compensation
payable thereunder, being approved by the shareholders of the Fund. [If the
Proposed Order is granted, this condition would be eliminated.]
7. At all times, a majority of the members of the Board of a Fund will
be persons each of whom is an Independent Director of the Fund and the
nomination of new or additional Independent Directors will be placed within
the discretion of the then existing Independent Directors.
8. When a subadviser change is proposed for a Fund with an Affiliated
Subadviser, the Board, including a majority of the Independent Directors,
will make a separate finding, reflected in the Board's minutes, that such
change is in the best interests of the Fund and its shareholders and does
not involve a conflict of interest from which PIFM or the Affiliated
Subadviser derives an inappropriate advantage.
18
MATTERS CONSIDERED BY EACH BOARD
At a Board meeting held on August 22, 2000, each Board, including the
Independent Directors, approved the submission to shareholders of Proposal
No. 3 regarding the Manager-of-Managers structure. Prior to the meeting each
Director received materials discussing this type of management structure. At the
meeting, each Director attended a comprehensive presentation on the proposed
structure and had the opportunity to ask questions and request further
information in connection with such consideration. Management representatives
presented an update on Proposal No. 3 to the Directors during a telephone
meeting held on September 21, 2000. Each Board gave primary consideration to the
fact that the rate of the management fee payable to PIFM would not change as a
result of adopting a Manager-of-Managers structure and that the new structure
would provide the potential for PIFM to hire subadvisers and amend subadvisory
agreements more efficiently and with less expense. Each Board also considered
that PIFM had substantial experience in evaluating investment advisers and that
PIFM would bring that experience to the task of evaluating the current
subadviser for a Fund and any potential new subadviser. Each Board took into
account the fact that PIFM could not, without the prior approval of the Board,
including a majority of the Independent Directors: (1) appoint a new subadviser,
(2) materially change the allocation of portfolio assets among subadvisers, or
(3) make material amendments to existing subadvisory agreements.
REQUIRED VOTE
Approval of this Proposal as to a Fund requires the affirmative vote of a
majority of that Fund's outstanding voting securities, as defined in the 1940
Act.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL NO. 3.
TO PERMIT AN AMENDMENT TO THE MANAGEMENT CONTRACT TO ALLOCATE A FUND'S
ASSETS AMONG AFFILIATED AND UNAFFILIATED SUBADVISERS.
PROPOSAL NO. 4
THIS PROPOSAL APPLIES TO ALL OF THE FUNDS.
The Board of each of the Funds, including the Independent Directors, has
approved, and recommends that shareholders of the Funds approve, a proposal to
amend the management agreement between each Fund and PIFM (the Amended
Agreements). Because the material features of each Amended Agreement are
substantially similar to each other, we have attached as Exhibit G-1 to this
proxy statement a form of the Amended Agreements applicable to all the Funds. If
approved at the Meeting, the Amended Agreements will supersede the existing
Management Agreements (the Existing Agreements) between each Fund and PIFM.
The Amended Agreements are substantially similar to the Existing Agreements.
THE RATE OF ADVISORY FEES PAYABLE BY EACH FUND WILL NOT CHANGE. The primary
difference is that the Amended Agreements would permit PIFM, with Board
approval, to allocate and reallocate a Fund's portfolio assets among subadvisers
from 0% to 100%.
A NOTE FOR SHAREHOLDERS OF THE STOCK INDEX, FINANCIAL SERVICES, HEALTH
SCIENCES, TECHNOLOGY, TAX EQUITY, TAX SMALL-CAP AND ACTIVE BALANCED FUNDS (the
PIC Funds): If the Amended Agreement is approved with respect to your Fund, the
Fund's subadvisory agreement between PIFM and PIC (the Existing PIC Subadvisory
Agreement) will be amended to reflect the changes made in the Amended Agreement.
Therefore, in deciding whether to approve the Amended Agreement, you should
consider that by voting for approval of the Amended Agreement with respect to
your Fund, you also are voting to approve amending the Existing PIC Subadvisory
Agreement in order to permit PIFM, with Board approval, to allocate and
reallocate your Fund's portfolio assets to and from PIC from 0% to 100% of your
Fund's portfolio assets and to clarify that PIC's subadvisory fee will be based
on the portfolio assets that it
19
manages (the Amended PIC Subadvisory Agreement). EACH AMENDED PIC SUBADVISORY
AGREEMENT WILL BE THE SAME IN ALL OTHER MATERIAL RESPECTS AS THE EXISTING PIC
SUBADVISORY AGREEMENT, except as to the date of the Agreement. The Board of each
PIC Fund, including the Independent Directors, has approved amending the
Existing PIC Subadvisory Agreement of each PIC Fund. Because the material
features of each Amended PIC Subadvisory Agreement are substantially similar to
each other, we have attached as Exhibit G-2 to this proxy statement a form of
the Amended PIC Subadvisory Agreement applicable to all PIC Funds. If the
Amended Agreement is approved at the Meeting as to a PIC Fund, the Amended PIC
Subadvisory Agreement will supersede the Existing PIC Subadvisory Agreement
between PIFM and PIC as to that Fund.
EXISTING PIC SUBADVISORY AGREEMENTS
The Existing PIC Subadvisory Agreements provide that PIC will furnish
investment advisory services in connection with the management of the PIC Funds.
In connection with those services, PIC is obligated to keep certain books and
records of the PIC Funds. Pursuant to the Existing Agreements, as well as under
the Amended Agreements, PIFM continues to have responsibility for all investment
advisory services.
The table below lists the compensation paid by PIFM to PIC under the
Existing PIC Subadvisory Agreements for the last fiscal year of each PIC Fund,
as well as the date of each such Agreement, the date on which each Agreement was
last submitted to shareholders for approval and the fees paid by PIFM to PIC.
Each such Agreement was most recently continued by the Board on May 24, 2000.
EXISTING PIC DATE SUBADVISORY FEE PAID TO PIC (% OF
SUBADVISORY AGREEMENT SUBMITTED AVERAGE DAILY NET
FUND AGREEMENT DATE(1) TO SHAREHOLDERS ASSETS)(2)
- ---- ----------------- ------------------- ---------------------
Active Balanced.......... 5/14/98 8/6/98 0.325%
Financial Services
(Enhanced Index
Segment)............... 5/17/99 5/18/99 0.375%
Health Sciences (Enhanced
Index Segment)......... 5/17/99 5/18/99 0.375%
Stock Index.............. 10/30/96 8/14/96 0.150%
Tax Equity............... 12/8/98 12/8/98 0.325%
Tax Small-Cap............ 4/4/97 9/23/97 0.390%
Technology (Enhanced
Index Segment)......... 5/17/99 5/18/99 0.375%
- ------------------------
(1) Each Existing PIC Subadvisory Agreement was amended effective January 1,
2000 to provide for the payment of compensation by PIFM to PIC based on, in
the case of Financial Services, Health Sciences and Technology Funds, a
percentage of the average daily net assets of the segment of the Fund
managed by PIC, and for each other Fund, a percentage of the average daily
net assets of the Fund. The percentage applicable to each Fund is set forth
in the last column of this table.
(2) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the PIC Funds.
20
The table beginning on page 22 lists the fees paid to PIFM by each Fund. The
table below sets forth the total fees paid by PIFM to PIC for each PIC Fund
during the fiscal year:
FEE RECEIVED BY
FUND FISCAL YEAR ENDED PIC FROM PIFM(A)
- ---- ----------------- ----------------
Active Balanced............................. 9/30/00 $ 391,922
Financial Services (Enhanced Index
Segment).................................. 11/30/99 $ --
Health Sciences (Enhanced Index Segment).... 11/30/99 $ --
Stock Index................................. 9/30/00 $ 2,586,358
Tax Equity.................................. 10/31/00 $ 1,176,796
Tax Small-Cap............................... 10/31/00 $ 355,657
Technology (Enhanced Index Segment)......... 11/30/99 $ --
- ------------------------
(a) The amount shown is the fees paid by PIFM to PIC from January 1, 2000
through the fiscal year end of the indicated PIC Fund. Until January 1,
2000, PIFM reimbursed PIC for its reasonable costs and expenses incurred in
performing subadvisory services.
PIC does not currently advise any other mutual funds with investment
objectives and policies similar to those of any of the PIC Funds.
The table below lists the name and principal occupation of the principal
executive officers and each director of PIC. The address of each person is
Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102.
NAME POSITION WITH PIC PRINCIPAL OCCUPATIONS
---- ----------------- ---------------------
John R. Strangfeld Chairman of the Board, President, Chief Executive Officer,
Chief Executive Officer and Prudential Securities; Executive
Director Vice President, Prudential;
Chairman of the Board, President,
Chief Executive Officer and
Director, PIC; Chief Executive
Officer, Private Asset Management
Group of Prudential; Chairman,
Pricoa Capital Group.
Bernard Winograd Senior Vice President and Director Chief Executive Officer,
Prudential Real Estate Investors;
Senior Vice President and
Director, PIC; Director, Jennison.
Jack W. Gaston Director Director since 1999; Senior
Managing Director, PIC, since
1986.
John H. Hobbs Director Chairman of Jennison since 1998.
Chief Executive Officer, Jennison,
since 1998; prior to 1998, various
positions to Chairman and Chief
Executive Officer, Jennison
Associates Capital Corp.
Philip N. Russo Director Director of Jennison since 2000.
Vice President and Director, PIC,
since 1999; Vice President,
Prudential, since 1997; prior to
1997, Managing Director, Bankers
Trust Company.
James J. Sullivan Director Director of Jennison since 1999;
since 1981, positions to Vice
President and Managing Director,
PIC.
If a Fund's shareholders approve this Proposal, the relevant Existing
Agreement would be amended to provide that PIFM may reallocate Fund assets upon
Board approval only and without further shareholder approval. This would mean,
for example, that a Fund that has allocated 50% of its assets to subadviser #1
and 50% to subadviser #2 would be able to change the allocation to 75% of assets
to subadviser #1 and
21
25% to subadviser #2 without seeking shareholder approval. If the PIC Fund
shareholders approve this Proposal, their Existing PIC Subadvisory Agreements
would be amended as described above.
Reallocations may result in additional costs since sales of securities may
result in higher portfolio turnover. Also, because each subadviser selects
portfolio securities independently, it is possible that a security held by one
portfolio segment of a Fund may also be held by the other portfolio segment of
that Fund or that the two subadvisers may simultaneously favor the same
industry. PIFM will monitor each Fund's overall portfolio to ensure that any
such overlaps do not create an unintended industry concentration or result in a
violation of a Fund's diversification requirements. In addition, if one
subadviser of a Fund buys a security at the same time that another Fund
subadviser sells it, the net position of the Fund in the security may be
approximately the same as it would have been with an undivided portfolio and no
such sale and purchase, but the Fund will have incurred additional costs. PIFM
will consider these costs in determining the allocation of assets. PIFM will
consider the timing of reallocation based upon the best interests of a Fund and
its shareholders. To maintain a Fund's federal income tax status as a regulated
investment company, PIFM also may have to sell securities on a periodic basis
and the Fund could realize capital gains that would not have otherwise occurred.
Below we provide additional information about the Amended Agreements and the
Existing Agreements.
EXISTING AGREEMENTS
The Funds are currently managed under Existing Agreements with PIFM, dated
as shown in the following table.
The material features of each Existing Agreement are similar to those of the
Amended Agreements except with respect to the provisions relating to the
Manager-of-Managers structure. The following table also shows the date that each
Fund's Existing Agreement was most recently renewed by its Board and the date
that each Existing Agreement was last approved by a vote of the Fund's
shareholders.
DATE MOST DATE MOST RECENTLY
DATE OF CONTRACT RECENTLY RENEWED SUBMITTED FOR SHAREHOLDER
FUND WITH PIFM BY BOARD APPROVAL
- ---- ---------------- ---------------- -------------------------
20/20 Focus.............. 4/27/98 5/24/00 2/11/98
Active Balanced.......... 1/23/98* 5/24/00 1/23/98
Emerging Growth.......... 10/12/96** 5/24/00 10/25/96
Equity Opportunity....... 11/11/96** 5/24/00 11/11/96
Financial Services....... 5/17/99 5/24/00 5/18/99
Growth................... 10/27/95** 5/24/00 9/14/95
Health Sciences.......... 5/17/99 5/24/00 5/18/99
Natural Resources........ 3/1/88 5/25/00 2/19/88
Small Company............ 1/31/89 5/24/00 4/28/88
Stock Index.............. 10/30/96 5/24/00 10/30/96
Tax Equity............... 12/8/98 5/24/00 12/8/98
Tax Small-Cap............ 4/4/97 5/24/00 9/23/97
Technology............... 5/17/99 5/24/00 5/18/99
Utility.................. 5/2/88 5/24/00 7/19/94
- ------------------------
* Amended and Restated as of November 10, 2000 to add breakpoint.
** Amended and Restated as of January 1, 2000 to add breakpoint(s).
PIFM serves as manager to the Funds and to almost all of the other
investment companies that comprise the Prudential Mutual Funds. As of
October 31, 2000, PIFM managed and/or administered open-end and closed-end
management investment companies with assets of approximately $74.7 billion.
22
PIFM is a wholly-owned subsidiary of PIFM HoldCo, Inc., which is a
wholly-owned subsidiary of Prudential Asset Management Holding Company, which is
a wholly-owned subsidiary of Prudential. The address of PIFM, PIFM HoldCo and
PAMHCO is Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102. The
address of Prudential is 751 Broad Street, Newark, NJ 07102.
The table below lists the name and principal occupation of the officer in
charge and the senior officers of PIFM. The address of each person is Gateway
Center Three, 100 Mulberry Street, Newark, NJ 07102-4077.
NAME POSITION AND PRINCIPAL OCCUPATION
- ---- -----------------------------------------------------------------------------
David R. Odenath,
Jr.................. Officer in Charge and President, Chief Executive Officer & Chief Operating
Officer
Robert F. Gunia....... Executive Vice President & Chief Administrative Officer
William V. Healey..... Executive Vice President, Chief Legal Officer & Secretary
Theodore F.
Kilkuskie........... Executive Vice President
Judy A. Rice.......... Executive Vice President
Ajay Sawhney.......... Executive Vice President
Lynn M. Waldvogel..... Executive Vice President
Shaun M. Byrnes....... Senior Vice President
John L. Carter........ Senior Vice President
Keitha L. Kinne....... Senior Vice President
James Novak........... Senior Vice President
Kevin B. Osborn....... Senior Vice President
Under the Existing Agreements, PIFM manages each Fund's investments and
determines the composition of the assets of each Fund's portfolio, including the
purchase, retention or sale of the securities and cash contained in the
portfolios. PIFM (or PIC or Jennison under PIFM's supervision) is responsible
for the selection of brokers and dealers to effect all transactions, and is
authorized to pay higher commissions in order to receive research services.
Under the Existing Agreements, PIFM performs administrative services for each
Fund and furnishes each Fund with statistical information concerning its
investments. In general, each Fund bears its own expenses pursuant to the
appropriate Existing Agreement, although PIFM pays the salaries of its employees
who provide services to the Fund. For its services, PIFM was paid as
compensation the following amounts during each Fund's most recent fiscal year:
TOTAL MANAGEMENT FEES AS % MANAGEMENT
FUND OF AVERAGE NET ASSETS FEES
- ---- -------------------------- -------------
20/20 Focus.......................................... 0.75% to $1 bil. and $ 7,071,654
0.70% over $1 bil.
Active Balanced...................................... 0.65% to $1 bil. and $ 1,078,167
0.60% over $1 bil.
Emerging Growth...................................... 0.60% to $1 bil. and $ 1,202,452
0.55% over 1 bil.
Equity Opportunity................................... 0.60% to $300 mil. and $ 950,935
0.575% over $300 mil.
Financial Services................................... 0.75%* $ 302,913*
Growth............................................... 0.60% to $300 mil. $ 38,074,482
0.575% next $4.7 bil.
0.55% over $5 bil.
Health Sciences...................................... 0.75%* $ 488,906*
23
TOTAL MANAGEMENT FEES AS % MANAGEMENT
FUND OF AVERAGE NET ASSETS FEES
- ---- -------------------------- -------------
Natural Resources.................................... 0.75% $ 575,291
Small Company........................................ 0.70% $ 6,749,959
Stock Index.......................................... 0.30% $ 4,790,313
Tax Equity........................................... 0.65% to $500 mil. and $ 1,356,586
0.60% over $500 mil.
Tax Small-Cap........................................ 0.60% $ 847,276
Technology........................................... 0.75%* $ 631,240*
Utility.............................................. 0.60% to $250 mil. $ 16,318,008**
0.50% next $500 mil.
0.45% next $750 mil.
0.40% next $500 mil.
0.35% next $2 bil.
0.325% next $2 bil.
0.30% over $6 bil.
- ------------------------
* For the period 6/30/99 (commencement of operations) through 11/30/99, and
for the fiscal year ended 11/30/00, PIFM agreed to reduce its management
fees to 0.60%. Information shown is for the period 6/30/99 through 11/30/99.
** Information shown is for the eleven months ended 11/30/99.
AMOUNTS PAID TO AFFILIATES
THE DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS or the Distributor),
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, acts
as the distributor of the shares of the Funds. PIMS is a subsidiary of
Prudential. Pursuant to distribution and service plans adopted under Rule 12b-1
under the 1940 Act, the Funds bear the expense of distribution and service
(12b-1) fees paid to PIMS with respect to their respective Class A, Class B and
Class C shares. For their most recently completed fiscal years, PIMS received
distribution and service fees from the Funds as follows.
FISCAL CLASS A CLASS B CLASS C
FUND YEAR ENDED 12B-1FEES 12B-1FEES 12B-1FEES
- ---- ---------- ---------- ----------- ----------
20/20 Focus................................... 1/01/00 $ 513,787 $ 5,811,503 $1,110,391
Active Balanced............................... 9/30/00 $ 33,119 $ 137,941 $ 17,413
Emerging Growth............................... 10/31/99 $ 132,460 $ 1,272,492 $ 123,798
Equity Opportunity............................ 9/30/00 $ 109,351 $ 963,250 $ 99,773
Financial Services*........................... 11/30/99 $ 22,399 $ 186,461 $ 106,852
Growth........................................ 9/30/00 $3,724,474 $21,586,408 $2,429,395
Health Sciences*.............................. 11/30/99 $ 33,788 $ 314,109 $ 173,368
Natural Resources............................. 5/31/00 $ 66,436 $ 457,281 $ 18,513
Small Company................................. 9/30/00 $ 711,700 $ 2,500,600 $ 201,600
Stock Index................................... 09/30/00 $ 40,869 $ 368,209 $ 178,915
Tax Equity.................................... 10/31/99 $ 110,559 $ 956,204 $ 604,899
Tax Small-Cap................................. 3/31/00 $ 95,117 $ 894,738 $ 118,446
Technology*................................... 11/30/99 $ 48,988 $ 412,580 $ 196,230
Utility**..................................... 11/30/99 $6,157,192 $15,469,787 $ 223,717
- ------------------------
* Information shown is for the period 6/30/99 (commencement of operations)
through 11/30/99.
** Information shown is for the eleven months ended 11/30/99.
24
PIMS also receives front-end sales charges resulting from the sales of
Class A and Class C shares. From these fees, PIMS pays sales charges to
affiliated broker-dealers, who in turn pay commissions to salespersons and incur
other distribution costs. PIMS has advised the Funds that it received the
following front-end sales charges during the Funds' fiscal years as described
above.
CLASS A CLASS C
FUND SALES CHARGES SALES CHARGES
- ---- ------------- -------------
20/20 Focus..................................... $1,273,800 $ 607,100
Active Balanced................................. $ 44,300 $ 11,100
Emerging Growth................................. $ 296,200 $ 98,000
Equity Opportunity.............................. $ 91,300 $ 36,900
Financial Services.............................. $ 682,100 $ 296,000
Growth.......................................... $2,999,400 $1,155,800
Health Sciences................................. $ 938,000 $ 438,300
Natural Resources............................... $ 19,900 $ 3,700
Small Company................................... $ 94,600 $ 15,600
Stock Index..................................... $ 0 $ 315,500
Tax Equity...................................... $1,898,400 $1,057,400
Tax Small-Cap................................... $ 20,700 $ 3,300
Technology...................................... $1,286,500 $ 490,800
Utility......................................... $ 395,400 $ 53,300
PIMS also received the following contingent deferred sales charges (CDSCs)
imposed on certain redemptions by Class B and Class C shareholders of the Funds
for their fiscal years as described above.
CLASS B CLASS C
FUND CDSCS CDSCS
- ---- ---------- --------
20/20 Focus........................................ $1,834,100 $ 90,400
Active Balanced.................................... $ 34,000 $ 2,500
Emerging Growth.................................... $ 268,000 $ 4,800
Equity Opportunity................................. $ 233,300 $ 4,400
Financial Services................................. $ 51,200 $ 17,700
Growth............................................. $3,052,100 $134,700
Health Sciences.................................... $ 68,500 $ 23,000
Natural Resources.................................. $ 118,700 $ 900
Small Company...................................... $ 919,700 $ 19,100
Stock Index........................................ $ 59,700 $ 28,100
Tax Equity......................................... $ 327,400 $ 76,000
Tax Small-Cap...................................... $ 876,600 $ 4,900
Technology......................................... $ 72,000 $ 24,000
Utility............................................ $1,878,700 $ 13,400
THE TRANSFER AGENT
The Fund's transfer agent, Prudential Mutual Fund Services LLC (PMFS),
194 Wood Avenue South, Iselin, New Jersey 08830, is a wholly-owned subsidiary of
PIFM. PMFS received the following fees for its services to the Funds for their
fiscal years as described above.
TRANSFER AGENT
FUND FEES
- ---- --------------
20/20 Focus................................................. $ 968,000
Active Balanced............................................. $ 248,600
Emerging Growth............................................. $ 280,000
25
TRANSFER AGENT
FUND FEES
- ---- --------------
Equity Opportunity.......................................... $ 212,800
Financal Services........................................... $ 75,100
Growth...................................................... $7,502,000
Health Sciences............................................. $ 99,000
Natural Resources........................................... $ 137,500
Small Company............................................... $1,561,400
Stock Index................................................. $1,401,400
Tax Equity.................................................. $ 120,400
Tax Small-Cap............................................... $ 251,500
Technology.................................................. $ 122,200
Utility..................................................... $3,800,600
COMMISSIONS PAID TO PRUDENTIAL SECURITIES
Prudential Securities, One Seaport Plaza, New York, New York 10292 is a
wholly owned subsidiary of Prudential. Prudential Securities received the
following commissions from each Fund, as of their fiscal years as described
above:
AGGREGATE AMOUNT OF COMMISSIONS
PAID (% OF AGGREGATE BROKERAGE
FUND COMMISSIONS)
- ---- -------------------------------
20/20 Focus.................................. $23,198 (1.21%)
Active Balanced.............................. 0
Emerging Growth.............................. $35,000 (1.20%)
Equity Opportunity........................... $26,500 (2.86%)
Financial Services........................... 0
Growth....................................... $541,200 (8.45%)
Health Sciences.............................. 0
Natural Resources............................ $1,824 (1.43%)
Small Company................................ $12,515 (0.47%)
Stock Index.................................. 0
Tax Equity................................... 0
Tax Small-Cap................................ $10,588 (3.38%)
Technology................................... $2,862 (2.0%)
Utility...................................... $107,745 (3.11%)
AMENDED AGREEMENTS
Pursuant to the Existing Agreements, PIFM, subject to the supervision of the
Funds' Boards, and in conformity with the investment policies and restrictions
of the Funds, manages both the investment operations of the Funds and the
composition of the Funds' portfolios, including the purchase, retention,
disposition and loan of securities or other assets. Under the Amended
Agreements, PIFM may delegate the subadvisory function to one or more than one
subadviser. As discussed in Proposal No. 3 above, PIFM would like the ability to
manage in a "Manager-of-Managers" style in which PIFM would, among other things,
(i) continually evaluate the performance of the subadvisers to each Fund through
qualitative and quantitative analysis and consultations with each 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. Under the Amended Agreements, PIFM must
keep certain books and records of each Fund. PIFM also would administer each
Fund's business affairs and furnish appropriate office facilities, together with
ordinary clerical and bookkeeping services that are not furnished by the Funds'
custodian and PMFS, the Funds' transfer and dividend disbursing agent. Officers
and employees of PIFM serve as officers and Directors of the Funds without
compensation.
26
A model Amended Agreement under which PIFM would provide management services
to the Funds is attached as Exhibit G-1 to this proxy statement. In brief, the
Amended Agreement provides that:
- PIFM will administer a Fund's business affairs and supervise the Fund's
investments. Subject to Board approval, PIFM may select and employ one or
more subadvisers for a Fund, who will have primary responsibility for
determining what investments the Fund will purchase, retain and sell;
- Subject to Board approval, PIFM may reallocate a Fund's assets among
subadvisers;
- PIFM (or a subadviser, acting under PIFM's supervision) will select
brokers to effect trades for a Fund, and may pay a higher commission to a
broker that provides bona fide research services;
- PIFM will pay the salaries and expenses of any employee or officer of a
Fund (other than the fees and expenses of the Fund's Independent
Directors). Otherwise, the Fund pays its own expenses; and
- For each Fund, PIFM will be paid at the same advisory fee rate as is
currently charged to each such Fund under the Existing Agreements.
MATTERS CONSIDERED BY THE BOARD
The proposal to present the Amended Agreements and, as to the PIC Funds, the
Amended PIC Subadvisory Agreements, to shareholders was approved by the Board of
each Fund, including the Independent Directors, on August 22, 2000. The Board
Members received materials relating to the Amended Agreements and Amended PIC
Subadvisory Agreements in advance of the meeting at which these Agreements were
considered, and had the opportunity to ask questions and request further
information in connection with such consideration. The Board gave primary
consideration to the fact that the rate of fees will not change and that the
terms of the Amended Agreements were substantially similar to the Existing
Agreements, except that, under the Amended Agreements, PIFM would be able to
allocate Fund assets among subadvisers, subject to Board approval. The Board
also gave weight to the fact that it was beneficial to conform the advisory
structure of the Funds to the advisory structure already in place for other
Prudential Mutual Funds. After consideration of all these factors, each Board
concluded that adopting Proposal No. 4 is reasonable, fair and in the best
interest of each Fund and its shareholders.
REQUIRED VOTE
Approval of this Proposal as to a Fund requires the affirmative vote of a
majority of that Fund's outstanding voting securities, as defined in the 1940
Act.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL NO. 4.
TO APPROVE CHANGES TO FUNDAMENTAL INVESTMENT
RESTRICTIONS AND POLICIES
PROPOSAL NO. 2
RELEVANT5
THIS PROPOSAL APPLIES TO ALL OF THE FUNDS.
ChangesBACKGROUND
The Board of each Fund has approved, and recommends that shareholders of the
Fund approve, the amendment of certain fundamental investment restrictions and
policies of the Fund.
Each Fund has adopted fundamental investment restrictions and policies
regarding the management of the Fund's investments. The designation of these
restrictions and policies as "fundamental" means that they cannot be changed
without shareholder approval. You are being asked to approve changes to your
Fund's fundamental investment restrictions and policies in order to:
(a) provide the Fund's Manager and
27
Subadviser(s) with additional flexibility to pursue the Fund's investment
objective; (b) allow the Fund to implement certain investment programs that may
help the Fund to achieve economies of scale by participating in transactions
with other Prudential Mutual Funds, such as joint investment in affiliated
investment companies and an inter-fund lending program; and (c) eliminate
investment restrictions that were imposed by state regulators that are no longer
required or that were imposed years ago, but do not support the Manager's and
Subadviser's current strategy to pursue your Fund's investment objective.
The Funds have similar, although not identical, fundamental investment
restrictions. Some of the differences are due to the Funds' different investment
objectives. Other differences are due to historical evolution. We would like to
realign the Funds' limits by establishing uniform fundamental investment
restrictions, while achieving the goals described above. Consistency among the
Funds' fundamental investment restrictions should also facilitate the management
of the Funds since the Funds' Manager is expected to be better able to monitor
compliance of the Funds if they have uniform investment restrictions.
The 1940 Act requires a mutual fund to disclose, in its registration
statement, its policy with respect to each of the following:
- diversification
- issuing senior securities
- borrowing money, including the purpose for which the proceeds will be used
- underwriting securities of other issuers
- concentrating investments in a particular industry or group of industries
- purchasing or selling real estate or commodities
- making loans
In addition to the above items, a mutual fund is free to designate as
"fundamental" investment policies concerning other investment practices. Each
Fund's Statement of Additional Information currently sets out fundamental
restrictions with respect to, among other things, the specific practices listed
above. As discussed below, the Board of each Fund recommends that some of those
restrictions be amended.
SPECIFIC RECOMMENDATIONS
The Board of each Fund has approved the adoption of a uniform set of
fundamental investment restrictions. Each Fund's current fundamental investment
restrictions appear in that Fund's Statement of Additional Information. In
addition to variations among Funds arising from their historical development,
there are also, and will continue to be, differences resulting from a Fund's
investment objective, its operation as a non-diversified Fund or its intention
to concentrate its investments in a specific industry or group of industries.
Exhibit H provides a list of your Fund's current fundamental investment
restrictions and the proposed revisions to each restriction.
The proposed uniform fundamental investment restrictions and policies are proposed for all Funds, except Allocation, Global Limited Maturity, Global
Governmentas
follows (the italicized information disclosed in brackets is explanatory and Global Total Return. Someis
not part of the proposed changes apply only to
certain Funds. See "Proposed Changes" below for listingsrestrictions):
The following restrictions are fundamental policies. Fundamental
policies are those that cannot be changed without the approval of the
Fundsholders of a majority of the Fund's outstanding voting securities. The term
"majority of the Fund's outstanding voting securities" means the vote of the
lesser of (i) 67% or more of the voting shares of the Fund represented at a
meeting at which more than 50% of the outstanding voting shares of the Fund
are present in person or represented by proxy, or (ii) more than 50% of
outstanding voting shares of the Fund.
28
The Fund may not:
(1) Purchase the securities of any issuer if, as a result, the Fund would
fail to whichbe a diversified company within the meaning of the 1940 Act, and
the rules and regulations promulgated thereunder, as each specific change applies.
REASONS FOR THE PROPOSED CHANGES. Pursuantmay be amended
from time to time except to the Investment Companyextent that the Fund may be permitted to
do so by exemptive order, SEC release, no-action letter or similar relief
or interpretations (collectively, the "1940 Act eachLaws, Interpretations and
Exemptions") [THIS RESTRICTION IS NOT APPLICABLE TO THE FOLLOWING FUNDS
THAT ARE CLASSIFIED AS NON-DIVERSIFIED: 20/20 FOCUS, FINANCIAL SERVICES,
HEALTH SCIENCES AND TECHNOLOGY. IF PROPOSAL NO. 5(A)(II) IS APPROVED,
THIS RESTRICTION ALSO WILL NOT BE APPLICABLE TO NATURAL RESOURCES AND
UTILITY FUNDS.]
(2) Issue senior securities or borrow money or pledge its assets, except as
permitted by the 1940 Act Laws, Interpretations and Exemptions. For
purposes of this restriction, the purchase or sale of securities on a
when-issued or delayed delivery basis, reverse repurchase agreements,
dollar rolls, short sales, derivative and hedging transactions such as
interest rate swap transactions, and collateral arrangements with respect
thereto, and transactions similar to any of the Funds has adopted certain fundamentalforegoing and collateral
arrangements with respect thereto, and obligations of the Fund to
[Directors/Trustees] pursuant to deferred compensation arrangements are
not deemed to be a pledge of assets or the issuance of a senior security.
(3) Buy or sell real estate, except that investment restrictionsin securities of issuers
that invest in real estate and policies (fundamental restrictions),investments in mortgage-backed securities,
mortgage participations or other instruments supported or secured by
interests in real estate are not subject to this limitation, and except
that the Fund may exercise rights relating to such securities, including
the right to enforce security interests and to hold real estate acquired
by reason of such enforcement until that real estate can be liquidated in
an orderly manner.
(4) Buy or sell physical commodities or contracts involving physical
commodities. The Fund may purchase and sell (i) derivative, hedging and
similar instruments such as financial futures contracts and options
thereon, and (ii) securities or instruments backed by, or the return from
which are set forthis linked to, physical commodities or currencies, such as forward
currency exchange contracts, and the Fund may exercise rights relating to
such instruments, including the right to enforce security interests and
to hold physical commodities and contracts involving physical commodities
acquired as a result of the Fund's ownership of instruments supported or
secured thereby until they can be liquidated in an orderly manner.
(5) Purchase any security if as a result 25% or more of the Fund's total
assets would be invested in the Fund's
prospectussecurities of issuers having their
principal business activities in the same industry, except for temporary
defensive purposes, and except that this limitation does not apply to
securities issued or statement of additional information, and may be changed only with
Shareholder approval. Restrictions and policies that a Fund has not specifically
designated as being fundamental are considered to be "non-fundamental" and may
be changedguaranteed by the Fund's Board without Shareholder approval.
Certain of the fundamental restrictions that the Funds have adopted in the
past reflect regulatory, businessU.S. government, its agencies or
industry conditions, practices or
requirements that are no longer in effect. Other fundamental restrictions
reflect regulatory requirements which remain in effect, but are not required to
be statedinstrumentalities. [THIS RESTRICTION IS NOT APPLICABLE TO THE FOLLOWING
FUNDS THAT CONCENTRATE IN A SINGLE INDUSTRY OR GROUP OF INDUSTRIES:
FINANCIAL SERVICES, HEALTH SCIENCES, TECHNOLOGY AND UTILITY; A FUND THAT
DOES CONCENTRATE ITS INVESTMENT IN A SINGLE INDUSTRY OR GROUP OF
INDUSTRIES AFFIRMATIVELY STATES ITS INTENTION TO CONCENTRATE IN ITS
PROSPECTUS.]
(6) Act as fundamental, or in some cases even as non-fundamental,
restrictions. Also, as new Funds have been created over a period of years,
substantially similar fundamental restrictions often have been phrased in
slightly different ways, which could result in minor but unintended differences
in effect or potentially give rise to unintended differences in interpretation.
Accordingly, the Boards have approved revisions to their respective Funds'
fundamental restrictions in order to simplify, modernize and make more uniform
those investment restrictions that are required to be fundamental, and to
eliminate certain fundamental restrictions that are not legally required. In
certain instances, existing fundamental restrictions that are eliminated because
they are not required to be fundamental would be re-classified as
non-fundamental restrictions, in which event they could be further modified by
the Board without Shareholder approval.
The Board of each Fund believes that the proposed changesunderwriter except to the Fund's
fundamental restrictions will enhance management's ability to manage efficiently
and effectively the Fund's assets in changing regulatory and investment
environments. In addition, by reducing to a minimum those policiesextent that, can be
changed only by Shareholder vote, each Fund will more often be able to avoid the
cost and delays of a Shareholder meeting when making changes to investment
policies that, at a future time, its Board considers desirable. Although the
proposed changes in fundamental restrictions will allow the Funds greater
investment flexibility to respond to future investment opportunities, the Boards
do not anticipate at this time that the changes, individually or in the
aggregate, will result in a major restructuring of any Fund's investment
portfolio.
A summary description of each proposed change to the Funds' fundamental
restrictions is set forth below. Shareholders should refer to Exhibit E to this
proxy statement for the text of the Funds' fundamental restrictions as proposed
to be amended.
The text below also describes those non-fundamental restrictions that would
be adopted by the Boards in conjunction with the elimination of certain
fundamental restrictions under Proposal No. 2. Any non-fundamental restriction
may be modified or eliminated by the appropriate Board at any future date
without any further approval of Shareholders.
If the proposed changes are approved by Shareholders of the respective Funds
at the Meeting, the Funds' prospectuses and statements of additional information
will be revised, as appropriate, to reflect those changes. This will occur as
soon as practicable following the Meetings. In those cases in which a Fund's
practice has been to state its fundamental restrictions both in its prospectus
(as affirmative policies) and in its statement of additional information (as
restrictions), adoption of Proposal No. 2 will result in a change to both.
Proposal No. 2 will not result in a change to any Fund's investment objective,
except with respect to Utility Fund.
9
PROPOSED CHANGES. The following is the text and a summary description of
the proposed changes to the Funds' fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection with the
eliminationdisposition of portfolio securities, it may be deemed to be an
underwriter under certain federal securities laws.
The Fund may make loans, including loans of assets of the Funds' current fundamental restrictions.
WithFund,
repurchase agreements, trade claims, loan participations or similar
investments, or as permitted by the 1940 Act Laws, Interpretations and
Exemptions. The acquisition of bonds, debentures, other debt securities or
instruments, or participations or other interests therein and investments in
government obligations, commercial paper, certificates of deposit, bankers'
acceptances or instruments similar to any of the foregoing will not be
considered the making of a loan, and is permitted if consistent with the
Fund's investment objective.
29
For purposes of Investment Restriction 1, the Fund will currently not
purchase any security (other than obligations of the U.S. government, its
agencies or instrumentalities) if as a result, with respect to each Fund and each proposed fundamental restriction, if a
percentage restriction is adhered to75% of the
Fund's total assets, (i) more than 5% of the Fund's total assets (determined
at the time of aninvestment) would be invested in securities of a single
issuer and (ii) the Fund would own more than 10% of the outstanding voting
securities of any single issuer.
For purposes of Investment Restriction 5, the Fund relies on The North
American Industry Classification System published by the Bureau of Economic
Analysis, U.S. Department of Commerce, in determining industry
classification. The Fund's reliance on this classification system is not a
fundamental policy of the Fund and, therefore, can be changed without
shareholder approval.
Whenever any fundamental investment policy or transaction,investment restriction
states a maximum percentage of the Fund's assets, it is intended that, if
the percentage limitation is met at the time the investment is made, a later
increase or decreasechange in percentage resulting from a change
in thechanging total asset values of the Fund's portfolio securities or the amount of its total
assets will not be
considered a violation of such policy. However, if the fundamental restriction.
ITEM NO. APPLICABLE FUND(S)
- ------------ --------------------------------------------------------------------------------
Item 2(a) Equity Income, Small Companies
Item 2(b) Equity, Equity Income, Intermediate Global, Jennison, Small Companies
Item 2(c) Equity, Multi-Sector
Item 2(d) Small Companies
Item 2(e) Small Companies
Item 2(f) Utility
ITEM 2(A). APPROVAL OF AMENDMENT OF THE FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS REGARDING INVESTMENT IN SHARES OF OTHER INVESTMENT
COMPANIES.
PROPOSED CHANGES.Fund's asset coverage
for borrowings permitted by Investment Restriction 2 falls below 300%, the
Fund will take prompt action to reduce its borrowings, as required by the
1940 Act Laws, Interpretations and Exemptions.
PROPOSAL 5(a)(i): FUND DIVERSIFICATION (ALL FUNDS EXCEPT: 20/20 FOCUS, FINANCIAL
SERVICES, HEALTH SCIENCES, NATURAL RESOURCES, TECHNOLOGY AND UTILITY)
Most of the Funds are operated as diversified investment companies under the
1940 Act. In general, this means that, with respect to 75% of the value of the
Fund's total assets, the Fund invests in cash, cash items, obligations of the
U.S. government, its agencies or instrumentalities, securities of other
investment companies and other securities. The relevant Funds affected by this Item 2(a)"other securities" are listed
below. Nextsubject to
the additional requirement that not more than 5% of total assets will be
invested in the securities of a single issuer and that the Fund namewill not hold
more than 10% of an issuer's outstanding voting securities.
The proposed amendment would restrict a Fund that is operated as a
diversified investment company from purchasing the respective investment restriction number
which is proposedsecurities of any issuer if,
as a result, the Fund would fail to be modified. The languagea diversified company within the meaning
of the current investment
restriction as well as1940 Act Laws, Interpretations and Exemptions, except to the modified investment restriction is found in Exhibit
E.
RELEVANT FUNDS.
EXISTING INVESTMENT
RESTRICTION NUMBER
FUND NAME (SEE EXHIBIT E)
- -------------------------------------------------------------------------- -----------------------
Prudential Equity Income Fund............................................. 11
Prudential Small Companies Fund, Inc...................................... 8
Upon the approval of Item 2(a), the existing fundamental restriction
regarding the purchase of shares of investment companies will be modified soextent that
the applicable Funds willFund may be permitted to do so by exemptive order or similar relief. The
restriction is accompanied by a note that explains what the 1940 Act currently
requires for the Fund to be "diversified." The Fund would, however, be free to
amend that note if applicable laws are amended or the Fund receives an exemption
from the requirements imposed by applicable law.
RECOMMENDATION: To provide flexibility as laws change or relief is obtained
from the SEC or its Staff, while also requiring the Fund to comply with the
currently applicable definition of a "diversified" investment company, the Board
of each applicable Fund recommends that shareholders adopt the following as a
fundamental investment restriction:
The Fund may not:
Purchase the securities of any issuer if, as a result, the Fund would
fail to be a diversified company within the meaning of the 1940 Act, and
the rules and regulations promulgated thereunder, as each may be amended
from time to time, except to the extent that the Fund may be permitted to
do so by exemptive order, SEC release, no-action letter or similar relief
or interpretations (collectively, the "1940 Act Laws, Interpretations and
Exemptions").
The following note accompanies this investment restriction:
For purposes of Investment Restriction 1, the Fund will currently not
purchase any security (other than obligations of the U.S. government, its
agencies or instrumentalities) if as a result, with respect to 75% of the
Fund's total assets, (i) more than 5% of the Fund's total assets
(determined
30
at the time of investment) would be invested in securities of a single
issuer and (ii) the Fund would own more than 10% of the outstanding
voting securities of any single issuer.
PROPOSAL 5(a)(ii): FUND NON-DIVERSIFICATION (NATURAL RESOURCES AND UTILITY FUNDS
ONLY)
Both Utility Fund and Natural Resources Fund are currently operated as
diversified funds, meaning that the Funds cannot, as to 75% of their assets,
invest a larger portionmore than 5% of their assets in the securities of investment companies.
DISCUSSION: With respectany one issuer. The
respective Boards approved a proposal to change the Funds from being diversified
to non-diversified and recommend that shareholders approve the changes for each
Fund's fundamental restriction relatingFund. Jennison would then be able to investing in shares of other investment companies, the increase in the limit is
designed to make the limitation co-extensive with the limitationinvest more than 5% of the Investment Company Act which permits a fund to invest up to 10% of itsFund's total
assets in the sharessecurities of other investment companiesany one issuer. For Utility Fund, since the Fund
concentrates in the aggregate. Undersecurities of utilities companies (which include
telecommunications companies, among others), the Investment Companychange will permit the
portfolio managers to invest a greater proportion of the Fund's assets in a
smaller number of issuers, which makes the Fund less diversified. Similarly, for
Natural Resources Fund, the investment adviser has found that a large portion of
the Fund's assets are invested in a small number of natural resource companies.
Within the Fund's diversification constraints, the investment adviser cannot
further invest in favored companies.
Investing in a non-diversified fund involves greater risk than investing in
a diversified mutual fund because a loss resulting from the decline in value of
one security may represent a greater portion of the total assets of a
non-diversified fund.
Approval of this Proposal as to Utility Fund also will serve as approval of
the separate restatement of its industry concentration policy, since the
diversification and concentration policies both are currently contained in one
investment restriction (see page H-10 of the proxy statement).
PROPOSAL 5(b): ISSUING SENIOR SECURITIES, BORROWING MONEY OR PLEDGING ASSETS
(ALL FUNDS)
All of the Funds are permitted to borrow money and pledge assets to secure
such borrowings. However, the amount that may be borrowed, the purposes for
which borrowings may be made, and the amount of securities that may be pledged
vary among the Funds.
The proposed amendment would allow each Fund to borrow money and pledge its
assets to secure such borrowings to the extent permitted by the 1940 Act (i)Laws,
Interpretations and Exemptions. The restriction is accompanied by a fund may invest no more than 5%note stating
that if asset coverage for a borrowing falls below 300%, the Fund will take
prompt action to reduce its borrowings. This note is to reflect the current
requirement that the Fund limit borrowing to one-third of its total assets.
However, a Fund would be free to amend its borrowing limitations if applicable
law changes or the Fund receives an exemption from the requirements imposed by
applicable law. No Fund currently has pending or currently proposes to file a
request for exemptive relief to permit it to borrow with an asset coverage ratio
of less than 300%. Moreover, there can be no assurance that the SEC Staff would
grant exemptive or similar relief if requested.
Keep in mind that borrowing money and pledging assets in any oneare not integral parts
of your Fund's investment company and (ii) a fund may not own more than 3% of
the total outstanding voting stock of any one investment company. Neither Fund
owns shares of other investment companies at the current time. The Boards
believeprogram. Under the proposed amendment would provideinvestment restriction,
the Subadviser with additional
flexibilityFund could borrow money for temporary, extraordinary or emergency purposes
or for the clearance of transactions and to take advantage of investment
opportunities. In the future, the Fund may seek to obtain an exemptive order
from the SEC to allow the Fund to lend and borrow money from other Prudential
Mutual Funds. If the Fund requests and obtains such relief, the borrowing Fund
may be able to reduce the cost of borrowing money and the lending Fund may be
able to generate interest income. The proposed investment restriction could, if
adopted, provide each Fund with flexibility in adopting an inter-fund lending
program if an exemptive order is obtained from the SEC, receipt of which cannot
be assured.
RISKS: If a Fund borrows money to invest in securities and the investment
performance of the additional securities purchased fails to cover their cost
(including any interest paid on the money borrowed), the net asset value of the
Fund's shares will decrease faster than would otherwise be the case.
31
This is the speculative factor known as "leverage." In order to reduce the risk
presented by leverage, each of the Funds intends to not purchase portfolio
securities when borrowings exceed 5% of the value of its total assets. This
policy may be changed by the Directors.
If the Fund's asset coverage should decline as a result of market
fluctuations or other reasons, the Fund may be required to sell portfolio
securities to reduce the debt and restore the 300% asset coverage, even though
it may be disadvantageous from an investment standpoint to sell securities at
that time.
RECOMMENDATION: To provide flexibility as laws change or relief may be
obtained from the SEC or its Staff, while also requiring the Fund to comply with
currently applicable restrictions on issuing senior securities, borrowing money
and pledging assets, the Board of each Fund recommends that shareholders adopt
the following as a fundamental investment restriction:
The Fund may not:
Issue senior securities or borrow money or pledge its assets, except as
permitted by the 1940 Act Laws, Interpretations and Exemptions. For
purposes of this restriction, the purchase or sale of securities on a
when-issued or delayed delivery basis, reverse repurchase agreements,
short sales, derivative and hedging transactions such as interest rate
swap transactions, and collateral arrangements with respect thereto, and
transactions similar to any of the foregoing and collateral arrangements
with respect thereto, and obligations of the Fund to [Directors/Trustees]
pursuant to deferred compensation arrangements are not deemed to be a
pledge of assets or the issuance of a senior security.
The following note accompanies this investment restriction:
[I]f the Fund's asset coverage for borrowings permitted by Investment
Restriction 2, above, falls below 300%, the Fund will take prompt action
to reduce its borrowings, as required by the 1940 Act Laws,
Interpretations and Exemptions.
PROPOSAL 5(c): BUYING AND SELLING REAL ESTATE (ALL FUNDS)
None of the Funds is permitted to buy or sell real estate. However, because any
sharesmost of
the Funds are permitted to invest in the securities of companies that invest in
real estate or to invest in mortgage-backed securities, mortgage participations
or other instruments supported by interests in real estate.
The proposed investment restriction confirms that each Fund may not buy or
sell real estate. The restriction also clarifies that each Fund may make
investments in securities that are real estate-related, as described in the
restriction. In addition, the amended investment restriction allows a Fund that
holds real estate due to the enforcement of rights under an agreement or a
security interest (not through a purchase of the real estate) to hold the real
estate until it can be sold in an orderly manner.
RISKS: The performance of real estate-related securities depends upon the
strength of the real estate market and property management. Thus, investment
performance can be affected by national and regional economic conditions, as
well as other factors. These factors can have a more pronounced impact on
performance than investments in other securities.
RECOMMENDATION: To clarify the Fund's investment restriction with respect
to investments in real estate-related securities, the Board of each Fund
recommends that shareholders adopt the following as a fundamental investment
restriction:
The Fund may not:
Buy or sell real estate, except that investment in securities of issuers
that invest in real estate and investments in mortgage-backed securities,
mortgage participations or other instruments supported or secured by
interests in real estate are not subject to this limitation, and except
that
32
the Fund may exercise rights relating to such securities, including the
right to enforce security interests and to hold real estate acquired by
reason of such enforcement until that real estate can be liquidated in an
orderly manner.
PROPOSAL 5(d): BUYING AND SELLING COMMODITIES AND COMMODITY CONTRACTS (ALL
FUNDS)
None of the Funds is permitted to buy or sell commodities or commodity
contracts. Many of the Funds are permitted to invest in financial futures
contracts, options on financial futures contracts and forward currency exchange
contracts, which are not viewed as commodity contracts for purposes of the
fundamental restriction.
The proposed investment restriction confirms that each Fund may not buy or
sell commodities or commodity contracts. The restriction also clarifies that a
Fund's investment in financial futures contracts, options on financial futures
contracts and forward currency exchange contracts is not subject to the
restriction applicable to commodity contracts. If your Fund holdsintends to utilize
financial futures contracts and options on financial futures contracts, a
description of these instruments will appear in anotherthe Fund's Prospectus or
Statement of Additional Information.
RISKS: Financial futures contracts, options on financial futures contracts
and forward currency exchange contracts may be used by a Fund as a hedging
device or, in some circumstances, for speculation. Due to imperfect correlation
between the price of futures contracts and movements in a currency or a group of
currencies, the price of a futures contract may move more or less than the price
of the currency or currencies being hedged. The use of these instruments will
hedge only the currency risks associated with investments in foreign securities,
not market risk. In the case of futures contracts on securities indices or a
security, the correlation between the price of the futures contract and the
movement of the index or security may not be perfect. Therefore, a correct
forecast of currency rates, market trends or international political trends by
your Fund's investment companyadviser may still not result in a successful hedging
transaction.
In addition, a Fund's ability to establish and close out positions in
futures contracts and options on futures contracts will be subject to the
management feesdevelopment and expensesmaintenance of such investment company, investmentliquid markets. There is no assurance that a
liquid market on an exchange will exist for any particular futures contract or
option on a particular futures contract. If no liquid market exists for a
particular futures contract or option on a futures contract in which a Fund
invests, it will not be possible to effect a closing transaction in that
contract or to do so at a satisfactory price and the Fund would have to either
make or take delivery under the futures contract or, in the case of a written
option, wait to sell the underlying securities until the option expires or is
exercised or, in the case of a purchased option, exercise the option.
Successful use of futures contracts, options on futures contracts and
forward currency exchange contracts by a Fund in
other investment companies may result, in effect, in payment by Shareholders of
duplicate fees and expenses. See Exhibit E.
ITEM 2(B). APPROVAL OF AMENDMENT OF THE FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS REGARDING UNSEASONED ISSUERS.
PROPOSED CHANGES. The relevant Funds affected by this Item 2(b) are listed
below. Next to the Fund name is the respective investment restriction number
which is proposed to be eliminated. The language of the investment restriction
is found in Exhibit E.
10
RELEVANT FUNDS.
EXISTING INVESTMENT
RESTRICTION NUMBER
FUND NAME (SEE EXHIBIT E)
- -------------------------------------------------------------------------- -------------------------
Prudential Equity Fund, Inc............................................... 6
Prudential Equity Income Fund............................................. 6
Prudential Intermediate Global Income Fund, Inc........................... 2
Prudential Jennison Fund, Inc............................................. 5
Prudential Small Companies Fund, Inc...................................... 4
Upon the approval of Item 2(b), the existing fundamental restriction
regarding the purchase of securities of unseasoned issuers (that is, issuers in
business for less than three years) would be eliminated. The Funds would in turn
become subject to the ability of an
investment adviser to predict correctly movements in the direction of interest
and foreign currency rates and the market generally. If the investment adviser's
expectations are not met, the Fund would be in a worse position than if the
strategy had not been pursued.
RECOMMENDATION: In order to provide uniformity among the Funds' restriction
applicable to investments in commodities and commodity contracts, the Board of
each Fund recommends that shareholders adopt the following non-fundamentalas a fundamental
investment restriction:
The Fund may not:
Buy or sell physical commodities or contracts involving physical
commodities. The Fund may purchase and sell (i) derivative, hedging and
similar instruments such as financial futures contracts and options
thereon, and (ii) securities or instruments backed by, or the return from
which is linked to, physical commodities or currencies, such as forward
currency exchange contracts, and except that the Fund may exercise rights
relating to such instruments, including the right to enforce security
interests and to hold physical commodities and contracts involving
33
physical commodities acquired as a result of the Fund's ownership of
instruments supported or secured thereby until they can be liquidated in
an orderly manner.
PROPOSAL 5(e): FUND CONCENTRATION (ALL FUNDS EXCEPT: FINANCIAL SERVICES, HEALTH
SCIENCES, TECHNOLOGY AND UTILITY)
Most of the Funds invest their portfolios to avoid "concentration" in a
particular industry or group of industries. The 1940 Act requires that a mutual
fund recite its policy regarding concentration. If a Fund has a policy not to
concentrate, this means that, except for temporary defensive purposes, no more
than 25% of the Fund's total assets will be invested in the securities of
issuers having their principal business activities in the same industry. This
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
The proposed amendment is not intended to change any Fund's policy regarding
concentration, but to provide uniformity in disclosure of the policy among those
Funds having a policy not to concentrate their investments.
RISKS: Although the Funds do not concentrate their investment in a
particular industry or group of industries, they may, for temporary defensive
purposes, do so. If this occurs, a Fund would, on a temporary basis, be subject
to risks that may be unique or pronounced relating to a particular industry or
group of industries. These risks could include greater sensitivity to
inflationary pressures or supply and demand for a particular product or service.
RECOMMENDATION: The Board of each applicable Fund recommends that
shareholders adopt the following as a fundamental investment restriction:
The Fund may not:
Purchase any security if as a result 25% or more of the Fund would then have more
than 5% of itsFund's total
assets (determined atwould be invested in the timesecurities of issuers having their
principal business activities in the same industry, except for temporary
defensive purposes, and except that this limitation does not apply to
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities.
PROPOSAL 5(f): ENGAGING IN UNDERWRITING (STOCK INDEX, SMALL COMPANY, EQUITY
OPPORTUNITY AND GROWTH FUNDS ONLY)
None of the investment) invested inFunds may act as an "underwriter" of securities, of companies (including
predecessors) less than three years old, except to the
extent that thea Fund may invest inbe deemed to be an underwriter under federal securities
laws when it disposes of any U.S. Government agency or
instrumentality, and in any security guaranteed by such an agency
or instrumentality.
DISCUSSION: Each Fund's fundamental restriction relating to investing in
"unseasoned issuers" was initially placedcertain securities held in its registration statement due to
state law ("blue sky") requirements.investment portfolio.
The restrictionproposed amendment is not required under the
federal securities laws. The Subadviser believes that the restriction is
confining and has recommendedintended to the Boards that it be eliminated. The Boards
believe it prudentchange any Fund's policy regarding
underwriting activity, but to delete this investment restriction as fundamental and
permit the Boards the flexibility to relax the restriction if legislative or
regulatory changes so permit.
If the Proposal is approved, the Funds would continue to comply with the
existing restriction as a non-fundamental investment restriction so long as it
is required under blue sky regulations. Accordingly, approvalprovide uniformity in disclosure of the Proposal
should not result in any immediate changes topolicy
among the Funds' portfolios or the way
in which they are managed.Funds.
RECOMMENDATION: The Board of each applicable Fund believesrecommends that
approvalshareholders adopt the following as a fundamental investment restriction:
The Fund may not:
Act as underwriter except to the extent that, in connection with the
disposition of Item 2(b) isportfolio securities, it may be deemed to be an
underwriter under certain federal securities laws.
PROPOSAL 5(g): MAKING LOANS (ALL FUNDS)
The Funds currently lend money and assets in the best
interestslimited situations. The Funds
may, for example, purchase certain debt securities of Shareholdersgovernments, corporate
issuers or banks, as described in each Fund's current registration statement and
the Funds. Becauseproposed investment restriction.
34
Each Fund also may engage in repurchase agreement transactions, where the
Fund purchases securities from a broker or bank with an agreement by the seller
to repurchase the securities at an agreed upon price at an agreed upon time.
These transactions allow the Fund to invest its cash to generate income, usually
on a short-term basis, while maintaining liquidity to honor its redemption
obligations. Generating portfolio income through investment in repurchase
agreements is not an integral part of your Fund's investment program. A Fund
would engage in these transactions primarily to keep its cash fully invested,
but available to meet redemption requests.
The Funds are not requiredhave established a securities lending program where they use a
securities lending agent to locate institutions that, on a temporary basis, seek
to hold annual meetings of shareholderscertain securities that are owned by a Fund. In these transactions, a
Fund transfers its ownership interest in a security with the right to receive
income from the borrower and do not intendthe right to hold such meetings
unless Shareholder action is required byhave the Investment Company Act or the
Funds' By-laws, future Shareholder consideration of eliminating the investment
restriction relating to unseasoned issuers would require a special meeting of
Shareholders at considerable cost to the Funds. If such consideration is
postponed, the Funds could be deprived of beneficial investment opportunities.
ITEM 2(C). APPROVAL OF AMENDMENT TO THE FUNDS' INVESTMENT RESTRICTIONS RELATING
TO SECURITIES LENDING.
PROPOSED CHANGES. The relevant Funds affected by this Item 2(c) are listed
below. Nextsecurity returned to the Fund
nameon short notice, for example, to enable the Fund to vote the securities.
Securities lending allows a Fund to generate income on portfolio securities to
enhance the Fund's returns.
In recognition of the fact that the Funds do make loans of assets, the
revised investment policy is the respective investment restriction number
which is proposedintended to be modified. The language ofeliminate the current investment
restriction as well as the modified investment restriction is found in Exhibit
E.
RELEVANT FUNDS.
EXISTING INVESTMENT
RESTRICTION NUMBER
FUND NAME (SEE EXHIBIT E)
- -------------------------------------------------------------------------- -----------------------
Prudential Equity Fund, Inc............................................... 12
Prudential Multi-Sector Fund, Inc......................................... 13
11
DISCUSSION: Currently,restriction. The new disclosure more accurately describes the Funds' fundamental restrictions limit the
permissible amount oflending
activities and plans to make loans of portfolioassets in the future. The new policy would
not prevent a Fund's purchase of debt securities, including investments in
government securities, corporate debt securities and certain bank obligations.
The new investment policy would also allow a Fund to 10% of each Fund's total
assets. The Subadviser to each Fund has recommended,engage in repurchase
agreement transactions and the Boards have
approved, that a change be made to increase the percentage of portfolio
securities that the Funds may lend to 30%, subject to Shareholder approval.
Securities lending is a strategy commonly used to enhance the returns of
mutual funds. The Subadviser believes that some of the most profitable
opportunities for securities lending currently existwithout these activities being
deemed prohibited loans.
RISKS: Where a Fund engages in a number of markets,
where there is generally less competition and sophistication, thereby creating
opportunities for wider lending spreads. The Manager and Subadviser therefore
believe that an increase in the currently allowable percentage of securities lending, to 30% of total assets may potentially permit the Funds to generate
higher incremental returns to Shareholders. Each Fund is currently subject to
the risks of securities lending and, if the proposal is approved, may subjectit assumes a larger portion of Fund assets to such risks. As with any lending arrangement,
there are risks of delay in recovery and in some cases loss of rights in the
collateral should the borrower of the securities fail financially. There are
additional risks with respect to international lending. Although the Subadviser
believesrisk that soon after entering into the securities lending transaction most
collateral will be transferred to a Fund's domestic custodian, should collateral
be maintained by a foreign subcustodian, there could be additional delays in
recovering such collateral. Further, should a Fund have difficulty in recovering
securities that are called, the Fund may be required to buy the same securities
at market price to cover its delivery obligations.
If this proposal is approved, the Funds would have the ability to lend their
portfolio securities to brokers, dealers and financial institutions, provided
that outstanding loans (i) do not exceed in the aggregate 30% of the value of a
Fund's total assets, (ii) are callable at any time by the relevant Fund and
(iii) are at all times secured by cash or equivalent collateral that is equal to
at least the market value, determined daily, of the loaned securities. The
advantage of such loans is that a Fund continues to receive payments in lieu of
the interest and dividends of the loaned securities, while at the same time
earning interest either directly from the borrower or on the collateral which
will be invested.
A loan may be terminated by a borrower upon notice (typically on one
business day's notice) or by a Fund at any time. If a
borrower fails to maintain the requisiterequired amount of collateral,collateral. The Fund or its
lending agent would be required to pursue the loan automatically terminates, and the
Fund could use the collateral to replace the securities while holding the
borrower liable for any excess
of replacement cost over the value of the collateral. As with any extensions of
credit, there are risks of delay in recovery and in some cases loss of rights in
the collateral shouldif the borrower of the securities failfails financially. LoansTo mitigate
these risks, each Fund's investment adviser makes loans of portfolio securities would be made, however,
only to firms determined to be creditworthy pursuantcreditworthy.
In repurchase agreement transactions, a seller of a security agrees to
procedures approvedrepurchase that security from a Fund at a mutually agreed-upon time and price.
The repurchase price is in excess of the purchase price, reflecting an
agreed-upon rate of return effective for the period of time the Fund's money is
invested in the transaction. If a seller fails to repurchase securities as
required by its agreement with the Fund and the value of the collateral securing
the repurchase agreement declines, the Fund may lose money. To address this
risk, each Fund's investment adviser enters into repurchase agreements only with
firms determined to be creditworthy.
RECOMMENDATION: In order to provide uniformity among the Funds' policies
applicable to making loans, including allowing the Funds to implement their
securities lending program as described above, the Board of each Fund recommends
that shareholders adopt the following as a fundamental investment policy:
The Fund may make loans, including loans of assets of the Fund,
repurchase agreements, trade claims, loan participations or similar
investments, or as permitted by the 1940 Act Laws, Interpretations and
Exemptions. The acquisition of bonds, debentures, other debt securities
or instruments, or participations or other interests therein and
investments in government obligations, commercial paper, certificates of
deposit, bankers' acceptances or instruments similar to any of the
foregoing is not considered the making of a loan, and is permitted if
consistent with the Fund's investment objective.
35
PROPOSAL 5(h): OTHER INVESTMENT RESTRICTIONS (ALL FUNDS)
The Funds have adopted additional fundamental investment restrictions. Some
of these investment restrictions were required to be designated as fundamental
by state securities laws. These state securities laws have since been repealed
or are otherwise no longer applicable to the Funds.
To provide maximum flexibility in managing the Funds and uniformity in the
restrictions applicable to the Funds, the Board of each Fund proposes that all
investment restrictions and policies of each Fund apart from its investment
objective and other than those listed in Proposals 5(a) through 5(g), be
designated as non-fundamental. This means that each such investment restriction
or policy could be changed by the Board of each Fund. On terminationDirectors, without shareholder
approval, although shareholders would be informed of the loan, a borrower is requiredany material change to return the
loaned securitiesany
non-fundamental restriction or policy prior to the relevant Fund, and any gain or losschange.
Among the investment restrictions that would be designated as
non-fundamental if Proposal No. 5(h) is approved is your Fund's limitation
regarding investment in other mutual funds. The Funds have obtained an exemptive
order from the market price
during the loan would inure to such Fund.
Since voting or consent rights, if any, which accompany loaned securities
pass to the borrower,SEC that allows each Fund will follow the policyto invest up to 25% of calling a loan,its assets in
whole or in part as mayshares of an affiliated mutual fund. Such investment would be appropriate,made to permit the exercise of such rights if
the matters involved would have a material effect on thefacilitate
your Fund's investment in
the securities which are the subject of the loan. A Fund will pay reasonable
finders', administrative and custodial fees in connection with a loan of its securities or may sharecash and short-term investments. The ability to
invest in an affiliated mutual fund should allow each Fund to reduce the
interest earned on collateraladministrative burdens and costs associated with the borrower.
ITEM 2(D). APPROVAL OF AN AMENDMENT OF THE FUND'S INVESTMENT POLICIES TO PERMIT
THE FUND TO PURCHASE AND SELL OPTIONS ON STOCK AND STOCK INDICES IN
THE OVER-THE-COUNTER MARKET.
PROPOSED CHANGE. The Small Companiesinvesting in money market
instruments and short-term debt securities. Each Fund would be permitted to
purchase
and sell over-the-counter options on stocks and options on stock indices.
RELEVANT FUND. Prudential Small Companies Fund, Inc.
DISCUSSION: Currently, the Fund is permitted to purchase and write (I.E.,
sell) put and call options on equity securities that are traded on securities
exchanges or stock indices that are traded on national securities exchanges or
listed on NASDAQ (listed options). At a meeting held on May 8, 1996, the Board
authorized the Fund, subject to Shareholder approval, to purchase and sell
over-the-counter stock options and options on indices (OTC options). If
Shareholders approve the current proposal, no further approval
12
will be requested of Shareholdersinvest in an affiliated mutual fund only if market conditions, developments in
investment strategies or available options, listed or over-the-counter, warrant
in the Board's view changes in the Fund's policies or practices in respect of
options on securities or indices.
The Fund intends to use OTC options for the same purposes for which it
currently uses, or considers for use, listed options, namely, to reduce certain
risks of its investments and to attempt to enhance return, but not for
speculation. The Board of Directors believes that the ability to purchase and
sell OTC options expands the investment tools available tois consistent with
the Fund's investment adviserobjective and will benefitstrategy. Currently, each Fund is subject to
a fundamental or non-fundamental investment restriction that limits its
investment to mutual funds that are purchased in the Fund. Accordingly, the Board recommends that
shareholders of the Fund approve the amendment.
GENERAL. Most of the investment characteristics of OTC options are similar
to those of listed options, although there are some significant differences. A
brief summary of the common characteristics of OTCopen market and listed options follows,
after which there is a discussion of the principal differences.
OPTIONS ON STOCK. A call option is a short-term contract pursuant to which
the purchaser, in return for a premium paid, has the right to buy the security
underlying the option at a specified exercise price. The writer of the call
option, who receives the premium, has the obligation, upon exercise of the
option, to deliver the underlying security against payment of the exercise
price. A put option is a similar contract which gives the purchaser, in return
for a premium paid, the right to sell the underlying security at a specified
price. In the case of both put and call options, listed options may be exercised
at any time during the term of the option and OTC options be exercised either at
any time during the term or on the last day (or during any other period or upon
the occurrence of an event agreed by the parties).
Options are "covered" if, so long as
the writer is obligated under the
option, it owns the security underlying the option or has an absolute and
immediate right to acquire that security without additional cash consideration
(or for additional cash consideration held in a segregated account by the Fund's
Custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also covered if the writer holds on a
share-for-share basis a call on the same security as the call written where the
exercise priceFund does not hold more than 3% of the call held is equal to or less than the exercise priceoutstanding voting securities of
the call written, or greater than the exercise price of the call written if the
difference is maintained by the Fund in cash, Treasury bills or other liquid,
unencumbered assets in a segregated account with its Custodian.
Settlement of listed options on stocks requires the delivery of the
underlying securities; settlement of OTC options may require such delivery or
may provide for cash settlement of the difference between the value of the
security and the exercise price.
OPTIONS ON STOCK INDICES. Options on stock indices are similar to options
on stocks except that, rather than the right to take or make delivery of stock
at a specified price, an option on a stock index gives the holder the right to
receive, upon exercise of the option, an amount of cash if the closing level of
the stock index upon which the option is based is greater than, in the case of a
call, the exercise price of the option. This amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple (the multiplier). The
writer of the option is obligated, in return for the premium received, to make
delivery of this amount.
Unlike stock options, all settlements are in cash, and gain or loss depends
on price movements in the stock market generally (or in a particular industry or
segment of the market) rather than price movements in individual stocks. Because
exercises of index options are settled in cash, a call writer cannot determine
the amount of its settlement obligations in advance for, or cover, its potential
settlement obligations by acquiring and holding the underlying securities. In
addition, unless the Fund has other liquid assets which are sufficient to
satisfy the exercise of a call, the Fund would be required to liquidate
portfolio securities or borrow in order to satisfy the exercise.
PRINCIPAL DIFFERENCES BETWEEN OTC OPTIONS AND LISTED OPTIONS
CREDIT RISK. To secure the obligation to deliver the underlying security or
to pay the exercise price in the case of a listed option, the writer of the
option is generally required to pledge for the benefit of the broker the
underlying security or other assets in accordance with the rules of the relevant
exchange or
13
clearinghouse, such as The Options Clearing Corporation (OCC), an institution
created to interpose itself between buyers and sellers of exchange-traded
options in the United States. Technically, the clearinghouse assumes the other
side of every purchase and sale transaction on an exchange and, by doing so,
guarantees the transaction. Accordingly, the holder of the option is not
required to consider or look to the creditworthiness of the option writer.
In contrast, an OTC option is a direct contractual relationship with another
party. Consequently, in entering into OTC options, the Fund will be exposed to
the risk that the counterparty will default on, or be unable to complete, due to
bankruptcy or otherwise, its obligation on the option. In such an event, the
Fund may lose the benefit of the transaction. Consequently, the value of an OTC
option to the Fund is dependent upon the financial viability of the
counterparty. If the Fund decides to enter into transactions in OTC options, PIC
will take into account the credit quality of counterparties in order to limit
the risk of default by the counterparty.
TERMINATING OPTION OBLIGATIONS. If the writer of a listed option wishes to
terminate its obligation to purchase or deliver a security, it may effect a
"closing purchase transaction". This is accomplished by buying a listed option
of the same series as the option previously written. The effect of the purchase
is that the writer's position will be canceled by the clearing corporation.
However, a writer may not effect a closing purchase transaction after it has
been notified of the exercise of a listed option. Similarly, an investor which
is the holder of a listed option may liquidate his or her position by effecting
a "closing sale transaction". This is accomplished by writing (selling) a listed
option of the same series as the option previously purchased. There is no
guarantee that either a closing purchase or a closing sale transaction can be
effected. (See "Illiquidity" below.)
Again in contrast, it is not possible to effect a closing transaction in OTC
options in the same manner as listed options because a clearing corporation is
not interposed between the buyer and seller of the option. In order to terminate
the obligation represented by an OTC option, the holder must agree to the
termination of the OTC option and may be unable or unwilling to do so on terms
acceptable to the writer. In any event, a cancellation, if agreed to, may
require the writer to pay a premium to the counterparty. Although it does not
eliminate counterparty risk, the Fund may be able to eliminate the market risk
of an option it has written by writing or purchasing an offsetting position with
the same or another counterparty. However, the Fund would remain exposed to each
counterparty's credit risk on the call or put option until such option is
exercised or expires. There is no guarantee that the Fund will be able to write
put or call options, as the case may be, that will effectively offset an
existing position.
ILLIQUIDITY. Although listed options are not subject to any contractual or
legal limitation on resale, a liquid secondary market may not always be
available for one or more of the following or other reasons: (i) there may be
insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities;
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
exchange, (v) the facilities of an exchange or a clearing corporation may not at
all times be adequate to handle current trading volume; or (vi) one or more
exchanges could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that exchange (or in
the class or series of options) would cease to exist. The Fund may hold up to
10% of its net assets in illiquid securities.
OTC options are issued in privately negotiated transactions exempt from
registration under the Securities Act of 1933 and, as a result, are generally
subject to substantial legal and contractual limitations on sale. As a result,
there is no secondary market for OTC options and the SEC staff has taken the
position that OTC options held by an investment company, as well as securities
used to cover OTC options written by one, are illiquid securities, unless the
Fund and its counterparty have provided for the Fund at its option to unwind the
option. Such provisions ordinarily involve the payment by the Fund to the
counterparty to compensate it
14
for the economic loss caused by an early termination. In the absence of a
negotiated unwind provision, the Fund may be unable to terminate its obligation
under a written option or to enter into an offsetting transaction eliminating
its market risk.
LIMITATIONS ON PURCHASE AND SALE OF OTC OPTIONS
There are currently legal and regulatory limitations on the Fund's purchase
or sale of OTC options. These limitations are not fundamental policies of the
Fund and the Fund's obligation to comply with them could be changed without
approval of the Fund's shareholders in the event of modification or elimination
of such laws or regulations in the future.
There can be no assurance that the Fund's use of OTC options will be
successful and the Fund may incur losses in connection with the purchase and
sale of OTC options.
The Board of Directors believes that approval of Item 2(d) is in the best
interests of the Small Companies Fund and its Shareholders because it would
provide additional flexibility in the management of the Fund's portfolio. If the
proposed modification is not approved, the Fund will not be able to purchase or
sell options in the over-the-counter market.
ITEM 2(E). APPROVAL OF AN AMENDMENT OF THE FUND'S INVESTMENT POLICIES AND
RESTRICTIONS TO PERMIT THE FUND TO ENGAGE IN FOREIGN CURRENCY
EXCHANGE TRANSACTIONS.
PROPOSED CHANGE. Investment Restrictions Nos. 6 and 9 of the Small
Companies Fund would be modified to permit that Fund to engage in foreign
currency exchange transactions.
RELEVANT FUND.
EXISTING
INVESTMENT
RESTRICTION NUMBER
FUND NAME (SEE EXHIBIT E)
- -------------------------------------------------------------------------- ------------------
Prudential Small Companies Fund, Inc...................................... 6, 9
DISCUSSION: At a meeting held on May 8, 1996, the Board of Directors of the
Fund approved amendments to Investment Restrictions Nos. 6 and 9 which, if
approved by Shareholders, would permit the Fund to hedge the foreign portion of
its portfolio by entering into forward foreign currency exchange contracts,
options on foreign currencies, and futures contracts on foreign currencies and
options thereon. Currently, the Fund is permitted to invest up to 15%more than 5% of its total assets in
foreign securities.
The text of the proposed changes to Investment Restrictions Nos. 6any one investment company and 9 is
set forth in Exhibit E.
Set forth below is a discussion of the Fund's proposed use of forward
foreign currency exchange contracts, options on foreign currencies, and futures
contracts on foreign currencies and options thereon.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A forward contract on foreign currency is an obligation to purchase or sell
a specific currency at a future date, which may be any fixed number of days
agreed upon by the parties from the date of the contract at a price set on the
date of the contract. These contracts are traded in the interbank market
conducted directly between currency traders (typically large commercial banks)
and their customers. A forward contract generally has no deposit requirements,
and no commissions are charged for such trades.
When the Fund invests in foreign securities, the Fund proposes to enter into
forward contracts in several circumstances to protect the valuewill not invest more than 10% of its portfolio. There can be no assurance that this will be successful. The Fund
would not be able to use forward contracts to generate income, although the use
of such contracts may incidentally generate income. However, the Fund's dealings
in forward contracts would be limited to hedging involving either specific
transactions or portfolio positions. Transaction hedging is the purchase or sale
of a forward contract with respect to specific receivables or payables of the
Fund generally arising in connection with the purchase or sale of its portfolio
securities and accruals of interest or dividends receivable and Fund expenses.
Position hedging is the sale of a foreign currency with respect to portfolio
security positions denominated or quoted in that currency or in a different
currency (cross hedge). The Fund
15
would not speculate in forward contracts. The Fund would not position hedge
(including cross hedges) with respect to a particular currency for an amount
greater than the aggregate market valuetotal assets
(determined at the time of makinginvestment) in any salenumber of investment companies. If
shareholders approve the designation of a forward contract)Fund's investment in mutual funds as a
non-fundamental investment restriction, we anticipate that such Fund's Board
will amend the investment restriction to implement the cash management strategy
permitted by the SEC relief. The Boards of some of the securities being hedged.
WhenFunds also recently
approved their investment in exchange-traded funds, subject to any necessary
shareholder approval of the elimination of the fundamental investment
restriction on the Funds' ability to invest in other investment companies.
A second investment restriction that would be designated as non-fundamental
if Proposal No. 5(h) is approved limits the Funds' ability to enter into short
sales. The Boards of some of the Funds recently approved a recommendation by PIC
that these Funds be permitted to make short sales, with up to 5% of a Fund's
total assets allowed to be allocated to uncovered short sales. In a short sale,
a Fund sells a security it doesn't own when the subadviser thinks that the value
will decline. The Fund generally borrows the security to deliver to the buyer in
a short sale. The Fund then must buy the security at its market price when the
borrowed security must be returned to the lender. Short sales involve costs and
risks. The Fund must pay the lender interest on the security it borrows, and the
Fund enters into a contract forwill lose money if the purchase or sale of a security
denominated in a foreign currency, or when the Fund anticipates the receipt in a
foreign currency of dividends or interest payments on a security which it holds,
the Fund may desire to "lock in" the U.S. dollar price of the security orincreases between the U.S. dollar equivalenttime of
such dividend or interest payment, as the case may be.
Byshort sale and the date when the Fund replaces the borrowed security.
The investment restrictions of each Fund that will be designated
non-fundamental are included in Exhibit H. There is no current intention to
change any of these, apart from the restrictions relating to investing in other
investment companies and entering into short sales, as described above. The
following is a forward contract for a fixed amount of dollars for the
purchase or salegeneral summary of the amount of foreign currency involved inrestrictions to be designated
non-fundamental and the underlying
transactions,Funds to which they apply:
1. Purchase securities on margin (except that the Fund may obtain such
short-term loans as may be able to protect itself against a possible loss
resulting from an adverse change innecessary for the relationship between the U.S. dollar and
the subject foreign currency during the period between the date on which the
security is purchased or sold, or on which the dividend or interest payment is
declared, and the date on which such payments are made or received.
Additionally, when the investment adviser believesclearance of transactions);
provided that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar,deposit or payment by the Fund would be able to enter into a forward contract, for a fixed
amount of dollars, to sell the amount of foreign currency approximating the
value of someinitial or all of the portfolio securities of the Fund denominated in such
foreign currency. Requirements under the Internal Revenue Code for qualification
as a regulated investment company may limit the Fund's ability to engage in
transactions in forward contracts.
FUTURES CONTRACTS ON FOREIGN CURRENCIES AND OPTIONS ON FUTURES CONTRACTS ON
FOREIGN CURRENCIES
The Fund would be permitted to buy and sell futures contracts on foreign
currencies and groups of foreign currencies (futures contracts) such as the
European Currency Unit, and options thereon solely for hedging purposes. A
European Currency Unit is a basket of specified amounts of the currencies of
certain member states of the European Union. The Fund would engage in
transactions in only those futures contracts and options thereon that are traded
on a commodities exchange or a board of trade. A "sale" of a futures contract
means the assumption of a contractual obligation to deliver the specified amount
of foreign currency at a specified price in a specified future month. A
"purchase" of a futures contract means the assumption of a contractual
obligation to acquire the currency called for by the contract at a specified
price in a specified future month. At the time a futures contract is purchased
or sold, the Fund would have to allocate cash or securities as a deposit payment
(initial margin). Thereafter, the futures contract would be valued daily and the
payment of "variation margin" may be required, resulting in the Fund's paying or
receiving cash that reflects any decline or increase, respectively, in the
contract's value, a process known as "marking to market."
The Fund intends to engage in futures contracts on foreign currencies and
options on these futures contracts as a hedge against changes in the value of
the currencies to which the Fund is subject or to which the Fund expects to be
subjectmaintenance
margin in connection with futurefutures or options is not considered the purchase
of a security on margin. (This restriction, or one substantially similar to
this, as identified in Exhibit H,
36
would become non-fundamental for 20/20 Focus, Stock Index, Natural
Resources, Utility, Small Company, Tax Small-Cap, Emerging Growth, Equity
Opportunity, Growth and Active Balanced.)
2. Make short sales of securities or maintain a short position, subject
to certain exceptions. (This restriction, or one substantially similar to
this, as identified in Exhibit H and as modified pursuant to the previous
discussion, would become non-fundamental for 20/20 Focus, Stock Index,
Natural Resources, Utility, Small Company, Tax Small-Cap, Emerging Growth,
Equity Opportunity, Growth and Active Balanced.)
3. Make investments for the purpose of exercising control of
management. (This restriction, or one substantially similar to this, as
identified in Exhibit H, would become non-fundamental for 20/20 Focus,
Natural Resources, Utility, Small Company, Tax Small-Cap, Emerging Growth,
Equity Opportunity, Growth and Active Balanced.)
4. Invest in securities of other investment companies, except, subject
to certain restrictions, by purchases in accordance with the rules and
regulations of the Commodity Futures Trading Commission (the CFTC). The Fund
also intends to engage in such transactions when they are economically
appropriate for the reduction of risks inherent in the ongoing management of the
Fund. There can be no assurance that these hedging strategies will be
successful.
OPTIONS ON FOREIGN CURRENCIES
The Fund would be able to purchase and write put and call options on foreign
currencies and on futures contracts on foreign currencies traded on securities
exchangesopen market involving customary
brokerage commissions. (This restriction, or boards of trade (foreign and domestic) for hedging purposes in a
mannerone substantially similar to
thatthis, as identified in which forward foreign currency exchange contractsExhibit H and futures contracts on foreign currencies will be employed. Options on foreign
currenciesas modified pursuant to the previous
discussion, would become non-fundamental for 20/20 Focus, Natural Resources,
Utility, Small Company, Tax Small-Cap, Emerging Growth, Equity Opportunity,
Growth and on futures contracts on foreign currencies areActive Balanced.)
5. Purchase more than 10% of all outstanding voting securities of any
one issuer. (This restriction, or one substantially similar to options
on stock,this, as
identified in Exhibit H, would become non-fundamental for 20/20 Focus, Stock
Index, Natural Resources, Small Company, Tax Small-Cap, Emerging Growth,
Equity Opportunity, Growth and Active Balanced.)
6. Invest in interests in oil, gas or other mineral exploration or
development programs, except that the Fund would have the right to take or make delivery of
a specified amount of foreign currency, rather than stock. (See Item 2(d) for a
discussion of options.)
The Fund would be able to purchase and write options to hedge the Fund's
portfolio securities denominated in foreign currencies. If there were a decline
in the dollar value of a foreign currency in which the Fund's portfolio
securities are denominated, the dollar value of such securities would decline
even though the foreign currency value remained the same. See "Risks of
Investing in Forward Foreign Currency Exchange Contracts, Options on Foreign
Currencies and Futures Contracts on Foreign Currencies and
16
Options Thereon" below. To hedge against the decline of the foreign currency,
the Fund would be able to purchase put options on futures contracts on such
foreign currency. If the value of the foreign currency declined, the gain
realized on the put option would offset, in whole or in part, the adverse effect
such decline would have on the value of the portfolio securities. Alternatively,
the Fund would be able to write a call option on a futures contract on the
foreign currency. If the value of the foreign currency declined, the option
would not be exercised and the decline in the value of the portfolio securities
denominated in such foreign currency would be offset in part by the premium the
Fund received for the option.
If, on the other hand, the investment adviser anticipated purchasing a
foreign security and also anticipated a rise in the value of such foreign
currency (thereby increasing the cost of such security), the Fund would be able
to purchase call options on the foreign currency. The purchase of such options
could offset, at least partially, the effects of the adverse movements of the
exchange rates. Alternatively, the Fund could write a put option on the currency
and, if the exchange rates moved as anticipated, the option would expire
unexercised.
RISKS OF INVESTING IN FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS, OPTIONS ON
FOREIGN CURRENCIES, AND FUTURES CONTRACTS ON FOREIGN CURRENCIES AND OPTIONS
THEREON
The Fund's successful use of forward foreign currency exchange contracts,
options on foreign currencies and futures contracts on foreign currencies and
options thereon would depend upon the investment adviser's ability to predict
the direction of the market and political conditions, which requires different
skills and techniques than predicting changes in the securities markets
generally. There is no assurance it will be able to do so and, in fact, the Fund
may incur a loss. For instance, if the value of the securities being hedged
moves in a favorable direction, the advantage to the Fund would be wholly or
partially offset by a loss in the forward contracts or futures contracts.
Further, if the value of the securities being hedged does not change, the Fund's
net income would be less than if the Fund had not hedged since there are
transaction costs associated with the use of these investment practices.
These practices are subject to various additional risks. The correlation
between movements in the price of options and futures contracts and the price of
the currencies being hedged is imperfect. The use of these instruments would
hedge only the currency risks associated with investments in foreign securities,
not market risks. In addition, if the Fund purchased these instruments to hedge
against currency advances before it invested in securities denominated in such
currency and the currency market declined, the Fund might incur a loss on the
futures contract. The Fund's ability to establish and maintain positions would
depend on market liquidity. The ability of the Fund to close out a futures
position or an option would depend upon a liquid secondary market. There is no
assurance that liquid secondary markets will exist for any particular futures
contract or option at any particular time. There can be no assurance that the
Fund will be able successfully to hedge its portfolio or that foreign exchange
rates will be sufficiently predictable to enable the investment adviser
successfully to employ hedging (including cross hedging) techniques.
The Board of Directors believes that adoption of Item 2(e) is in the best
interests of the Small Companies Fund and its Shareholders since the ability to
hedge the Fund's foreign portfolio would be important during periods of
volatility in the foreign currency markets. If the proposed changes in
Investment Restriction Nos. 6 and 9 and related investment policies are not
approved, the Fund would not be able to engage in forward foreign currency
exchange contracts, options on foreign currencies, and futures contracts on
foreign currencies and options thereon.
ITEM 2(F). APPROVAL OF A CHANGE IN THE INVESTMENT OBJECTIVE OF PRUDENTIAL
UTILITY FUND, INC.
PROPOSED CHANGE. The current investment objective of the Utility Fund is
"to seek high current income and moderate capital appreciation through
investment in equity and debt securities of utility companies." It is proposed
that this objective be changed to "total return through a combination of current
income and capital appreciation." As noted above, the Board does not anticipate
at this time that the change in investment objective will result in a major
restructuring of the Fund's portfolio.
RELEVANT FUND. Prudential Utility Fund, Inc.
DISCUSSION: At the request of the Fund's Subadviser, the Board of Directors
has considered and recommends for Shareholder approval a change in the Fund's
investment objective. The current investment
17
objective of the Fund is "to seek high current income and moderate capital
appreciation through investment in equity and debt securities of utility
companies." It is proposed that the investment objective be changed to "to seek
total return through a combination of current income and capital appreciation."
Although not part of the new investment objective, the Fund would seek to
achieve its objective through investment in equity and debt securities of
utility companies, which include electric, gas, gas pipeline, telephone,
telecommunications, water, cable, airport, seaport and toll road companies.
The Subadviser has recommended this change in investment objective because
of a general change occurring in the market for securities of utility companies.
Deregulation and greater competition are changing the structure of utilities
companies, causing (1) greater uncertainty in the market, (2) the creation of
"non-traditional" utilities with minimal or no yields (such as cable television,
wireless communication and independent power companies) and (3) the
restructuring of traditional utilities in order to remain competitive. As a
result, utility yields have declined in recent years, and for many companies
there has been less emphasis on paying high dividends. In recent years, there
has also been greater volatility in the market for utilities companies.
The Subadviser believes that it is in the Shareholders' best interest to
lessen the Fund's emphasis on current income, both because of the lower yields
currently available in the market and the greater impact made by capital gains
on total returns in years such as 1995. Yield on equities in general have
decreased significantly in recent years. In 1986, the average yield of the
stocks comprising the S & P 500 Index was 3.8% versus 2.1% currently. Over the
same time, the average yield of traditional utilities stocks declined from 7.8%
to 6%. Currently, telephone stocks yield approximately 4% on average while gas
pipeline and distribution company yields range from 2.5% to 5.5%. International
utility yields tend to be lower than in the U.S. because of differing attitudes
towards current income. In some cases, yields may be as low as 1% to 2% for a
traditional electric utility. Dividend policy differs significantly from country
to country.
If the Fund were to continue to seek high current income in today's market,
it would have to consider holding a greater percentage of its assets in bonds in
lieu of common stocks and preferred stocks. The Subadviser does not believe that
maintaining a large weighting in bonds for yield enhancement is in the best
interest of Shareholders.
If this proposed change in investment objective is approved, the Fund would
continue to invest under normal circumstances, at least 80% of the Fund's
assets in the securities of
utilities companies which operate, invest in or sponsor such programs. (This
restriction, or one substantially similar to this, as identified in
Exhibit H, would become non-fundamental for Stock Index, Natural Resources,
Utility, Small Company, Equity Opportunity and would invest primarily in
common stocks of utilities companies that the investment adviser believes have
the potential for total return, which includes both current income and capital
appreciation. For temporary defensive purposes,Growth.)
7. Purchase any security if as a result the Fund would continue to be
able to investthen have more
than 5% of its total assets invested in preferred stocks and debt securities of utility companies (including
predecessors) less than three years old. (This restriction, or one
substantially similar to this, as well asidentified in money market instruments.Exhibit H, would become
non-fundamental for Natural Resources and Utility.)
The Subadviser believes that changingspecific investment restrictions and policies affected by this Proposal
are identified in Exhibit H. If shareholders of a Fund approve Proposal
No. 5(h), all of the Fund's objective to reduce the emphasis on current incomeinvestment restrictions and increase the
emphasis on total return could enhancepolicies apart from its ability to manage the Fund in the
long term interests of Shareholders. Of course, there can be no assurance that
the Fund will achieve its objective. The Fund's
investment objective isand other than those listed in Proposals No. 5(a) through
5(g), will be non-fundamental. If shareholders of a Fund reject Proposal
No. 5(h), all of the Fund's current fundamental policy which can only be changed by Shareholder vote.
* * * * *investment restrictions, apart
from those described in Proposals No. 5(a) through 5(g), will remain
fundamental.
REQUIRED VOTE
FOR PROPOSAL 2, ITEMS (a) - (f): Approval of each of the six
items contemplated by Proposal No. 2 with respectthese Proposals as to a Fund requires the affirmative vote of a
"majoritymajority of the Fund's outstanding voting securities" of that
Fund, which for this purpose means the affirmative vote of the lesser of (1)
more than 50% of the outstanding Shares of the Fund or (2) 67% or more of the
Shares of the Fund present at the Meeting if more than 50% of the outstanding
Shares of the Fund are represented at the Meeting in person or by proxy.
Shareholders of any Fund may vote against the changes proposed in any item with
respect to specific fundamental restrictions applicable to their Fundsecurities, as defined in the manner indicated on the proxy card.
IF ONE OR MORE OF THE NUMBERED ITEMS CONTEMPLATED BY PROPOSAL NO. 2 IS NOT
APPROVED BY SHAREHOLDERS OF A FUND, THE RELATED, EXISTING FUNDAMENTAL
RESTRICTIONS OF THAT FUND WILL CONTINUE IN EFFECT FOR THAT FUND, BUT FAILURE TO
APPROVE ALL OR PART OF PROPOSAL NO. 2 BY THE SHAREHOLDERS OF ONE FUND WILL NOT
AFFECT ANY APPROVALS OF PROPOSAL NO. 2 THAT ARE OBTAINED WITH RESPECT TO ANY
OTHER FUND.1940
Act.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT SHAREHOLDERSYOU
VOTE "FOR" PROPOSALS NO. 5(a) THROUGH 5(h).
37
TO AMEND THE INVESTMENT OBJECTIVE OF EQUITY OPPORTUNITY FUND
PROPOSAL NO. 6
The Board is submitting for approval by shareholders of the Fund the
following proposal to amend the investment objective of the Fund. The Board
approved this proposal at a meeting held on October 25, 2000. For the reasons
described below, the Board believes that the proposed changes are in the best
interests of shareholders and recommends that shareholders approve the proposed
amendment. The Fund's investment objective is a fundamental policy that cannot
be changed without shareholder approval.
The current investment objective for the Fund is long-term growth of capital
and income with current income as a secondary objective. The Board has approved
and recommends that the shareholders of the Fund approve an amendment to remove
the income component of the Fund's investment objective. To reflect the change,
the Fund's Prospectus will state: "The Fund's investment objective is long-term
growth of capital."
The Manager and Jennison, the Fund's Subadviser, have proposed the change in
investment objective to allow the Fund to take greater advantage of capital
appreciation opportunities. The proposed change in investment objective will
allow Jennison more flexibility to invest for capital appreciation rather than
having to focus on income-generating securities. Further, the Fund's management
believes that repositioning the Fund in the multi-cap value category should
provide shareholders with exposure to securities with stronger performance
potential.
For these reasons, the Board believes that the proposed changes are in the
best interests of shareholders and therefore recommends that the shareholders
approve the proposed amendment.
If the change in investment objective is approved by shareholders, Jennison
has indicated that the primary difference in how it may manage the Fund would be
in purchasing fewer income-producing securities. As a result of this change, the
Subadviser may, depending on market conditions, invest a greater percentage of
the Fund's assets in securities of mid-cap or large-cap companies with good
earnings growth prospects and attractive valuation levels. Therefore, if the
change is approved, the Fund may be subject to more risk to the extent that it
would be investing a greater proportion of its assets in these securities.
REQUIRED VOTE
Approval of this Proposal requires the affirmative vote of a majority of the
Fund's outstanding voting securities, as defined in the 1940 Act.
THE BOARD OF EQUITY OPPORTUNITY FUND, INCLUDING ITS INDEPENDENT BOARD
MEMBERS, RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2.
18
RATIFICATION OF6.
TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUND
PROPOSAL NO. 3
RELEVANT FUNDS. All Funds, except Prudential Allocation Fund.
DISCUSSION: Under Proposal No. 3, Shareholders7
The Board of each Fund, are asked to
ratify their Board'sincluding a majority of the Independent Directors,
has selected PricewaterhouseCoopers LLP as independent accountants for each Fund
for the current fiscal year. PricewaterhouseCoopers LLP has served as
independent accountants for the Funds for each year since at least 1996. The
ratification of the selection of independent accountants is to be voted on at
the Meeting and it is intended that the persons named in the accompanying proxy
vote for their Fund.PricewaterhouseCoopers LLP. No representative of PricewaterhouseCoopers
LLP is expected to be present at the Meeting.
The accountants for each Fund audit the Fund's financial statements for each fiscal
year.
TheBoard policy of the Board of each of the Funds regarding engaging independent accountants' services is
that management may engage thea Fund's principal independent public accountants to perform
any service(s)service normally provided by independent accounting firms, provided that
such service(s) meet(s) any and all
ofservice meets the independence requirements of the
38
American Institute of Certified Public Accountants and the SEC. In accordance with this policy, theThe Audit
Committee of
each Board reviewswill review and approves allapprove services provided by the independent public
accountants prior to their being rendered. The Audit Committee responsibilities
have been summarized in Proposal No. 1. Each Board of each Fundalso receives a report from
its Audit Committee relating to all services after they have been performed by thea
Fund's independent accountants.
During the last fiscal year, Deloitte & Touche LLP served as independent
accountants for Equity Income, Global Limited Maturity, Jennison, Multi-Sector
and Global Total Return and Price Waterhouse LLP served as accountants for
Equity, Intermediate Global, Small Companies, Utility and Global Government.REQUIRED VOTE
The Boardsaffirmative vote of each of these Funds have selected their respective accountants to
continue to serve in that capacity for the current fiscal year, subject to
ratification by Shareholders of each of those Funds at the Meetings. Deloitte &
Touche LLP also served as accountants for Allocation, but the Trustees have not
yet met to consider whether to recommend their continued retention for the
fiscal year ending July 31, 1997, so Allocation Shareholders are not being asked
to vote on this proposal.
Representatives of the accountants are not expected to be present at the
Meetings but will be available to answer any questions or make any statements
should any matters arise requiring their presence. Deloitte & Touche LLP and
Price Waterhouse LLP have informed the Funds for which they will act as
accountants that they have no material direct or indirect financial interest in
these Funds.
The persons named in the accompanying proxy will vote FOR ratification of
the selection of each Fund's accountant unless contrary instructions are given.
REQUIRED VOTE. For each Fund, approval of Proposal No. 3 requires a vote ofleast a majority of the votes cast with respect to Proposal No. 3shares present, in person
or by proxy, at the Meeting provided a quorum is present.required for ratification as to each Fund.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT SHAREHOLDERSYOU
VOTE "FOR" PROPOSAL NO. 3.7.
39
ADDITIONAL INFORMATION
The solicitation of proxies, the cost of which will be borne mostly by the
Funds, will be made primarily by mail but also may include telephone or oral
communications by regular employees of Prudential Securities or Prudential
Mutual Fund Management,PIFM, who will
not receive any compensation therefor from the Funds or in the case of certain Funds, by Georgeson Shareholder
Communications Corporation,Inc., a proxy solicitation firm retained by the Funds, who will
be paid the approximate fees and expenses for soliciting services set forth
below. Proxies may be recorded pursuant to (i) electronically transmitted
instructions or (ii) telephone instructions 19
obtained through procedures
reasonably designed to verify that the instructions have been authorized.
Soliciting fees and expenses payable to Shareholder Communications Corporation
by a particular Fund are a function of the number of Shareholdersshareholders in that Fund.
Twenty-five percent of the cost of the Meetings will be borne by PIFM.
ESTIMATED SOLICITATION
FUND FEES AND EXPENSES
- -------------------------------------------------------------------------------------------- ------------------------ ----------------------
Prudential Allocation Fund
Balanced Portfolio...................................................................... N/A
Strategy Portfolio...................................................................... N/A
Prudential20/20 Focus............................................ $129,817
Active Balanced........................................ $ 6,590
Growth................................................. $ 24,314
Equity Fund, Inc.................................................................Opportunity..................................... $504,135
Financial Services..................................... $ 173,280
Prudential Equity Income Fund...............................................................29,260
Emerging Growth........................................ $118,793
Health Sciences........................................ $ 156,805
Prudential Global Limited Maturity Fund, Inc................................................ N/A
Prudential Intermediate Global Income Fund, Inc.............................................47,782
Natural Resources...................................... $ 500
Prudential Jennison Fund, Inc...............................................................12,627
Small Company.......................................... $106,573
Stock Index............................................ $ 29,735
Prudential Multi-Sector Fund, Inc...........................................................88,170
Tax Equity............................................. $ 1,520
Prudential Small Companies Fund, Inc........................................................30,025
Tax Small-Cap.......................................... $ 97,810
Prudential Utility Fund, Inc................................................................18,070
Technology............................................. $ 372,315
The Global Government Plus Fund, Inc........................................................ N/A
The Global Total Return Fund, Inc........................................................... N/A94,472
Utility................................................ $327,263
SHAREHOLDER PROPOSALS
Any Shareholdershareholder who wishes to submit a proposal to be considered at a Fund's
next annual meeting of Shareholdersshareholders should send the proposal to that Fund at One
Seaport Plaza,Gateway
Center Three, 100 Mulberry Street, 4th Floor, Newark, New York, New York 10292,Jersey 07102, so as to
be received within a reasonable time before the Board makes the solicitation
relating to such meeting, in order to be included in the proxy statement and
form of proxy relating to such meeting.
The Funds will not be required to hold annual meetings of Shareholdersshareholders if
the election of Board Members is not required under the Investment Company1940 Act. It is the
present intention of the Board of each Fund not to hold annual meetings of
Shareholdersshareholders unless such Shareholdershareholder action is required.
Shareholder proposals that are submitted in a timely manner will not
necessarily be included in the Fund's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
40
OTHER BUSINESS
Management knows of no business to be presented at the Meetings other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of Shareholdersshareholders arise, the proxies will vote according to their
best judgment in the interest of the Funds.
S. JANE ROSEMarguerite E. H. Morrison
SECRETARY
August 22, 1996
IT IS IMPORTANT THAT YOU EXECUTE AND RETURNDecember 8, 2000
It is important that you execute and return ALL OF YOUR PROXIES PROMPTLY.
20of your proxies promptly.
41
INDEX TO EXHIBITS TO PROXY STATEMENT
Exhibit A --Five Percent Shareholder Report
Exhibit B Year in Which Each Current Board Member Standing for
Re-election Became a Member of the Board.................................................. A-1Board
Exhibit B --C Fund Ownership of Nominees and Current Board Members
Standing for Re-election............................................................ B-1Election
Exhibit C --D Board and Committee Information......................................... C-1
Exhibit D -- Officer Information..................................................... D-1Information
Exhibit E --Officer Information
Exhibit F Form of Subadvisory Agreement with Jennison
Exhibit G-1 Form of Management Agreement
Exhibit G-2 Form of Subadvisory Agreement with PIC
Exhibit H Fundamental Restrictions................................................ E-1
Appendix I -- Five Percent Shareholder Report......................................... I-1Restrictions
2142
EXHIBIT A
FIVE PERCENT SHAREHOLDER REPORT
As of November 3, 2000, the beneficial owners, directly or indirectly, of
more than 5% of the outstanding shares of any class of the Funds are listed
below. With respect to Prudential Financial Services Fund, Prudential Health
Sciences Fund and Prudential Technology Fund (each a series of Prudential Sector
Funds, Inc.) and Prudential 20/20 Focus Fund, there were no beneficial owners,
directly or indirectly, of more than 5% of the outstanding shares of any class
of each of the respective Funds as of November 3, 2000.
FUND NAME REGISTRATION SHARES (PERCENT)
- --------- --------------------------------------- ---------- ---------
Prudential Index Series Fund
Prudential Stock Index Fund (Class A) Atticus Trust Company 68,416 (7.24%)
RE: J. K. Tuerk Settlement
3 Charles Street St Helier
Jersey JE2 4SF
Channel Islands
United Kingdom
National Investor Services 54,753 (5.79%)
FBO 512-51526-28
55 Water Street
32nd Floor
New York, NY 10041
The Prudential Insurance 239,558 (25.34%)
Company
Derivatives Management Group C
Attn: Linda Bitondo
2 Gateway Center
10th Floor
Mailstop NJ 04-10-5A
Newark, NJ 07102
Prudential Stock Index Fund (Class Z) Pru Defined Contributions 4,727,902 (15.15%)
FBO PRU - DC QUALIFIED CLIENTS
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Trust Company 10,828,177 (34.71%)
FBO PRU - DC CLIENTS
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Pru Defined Contributions 1,614,369 (5.17%)
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Stock Index Fund (Class I) MasterShare Restricted 10,426,107 (22.17%)
Account
113 Gail Court
E. Northport, NY 11731
A-1
FUND NAME REGISTRATION SHARES (PERCENT)
- --------- --------------------------------------- ---------- ---------
Prudential Trust Company 16,637,304 (35.38%)
FBO Prudential Employee Saving Pl
Attn: Leann Yannuzzi
30 Ed Preate Dr.
Scranton, PA 18507
Prudential Trust Company 13,193,152 (28.05%)
FBO PRU - DC CLIENTS
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Marquette Trust Co 4,047,342 (8.61%)
CO TTEE STST
Hawaii Deferred Compensation P
Marquette Trust Company
Attn: Ann Mejia DCA/TR Adminis
13100 Wayzata Blvd.
Minnetonka, MN 55305
Prudential Natural Resources Fund, Inc. Grandview Pharmacy Inc. 9,935 (5.12%)
(Class C) Profit Sharing Plan
Howard Eldridge Trustee
Ralph Eldridge Trustee
2230 N Park Rd.
Connersville, IN 47331
Prudential Securities C/F 11,455 (5.90%)
Mr Lawrence G Scheer
IRA DTD 06/14/00
11501 Rosewood St.
Leawood, KS 66211-2015
Prudential Natural Resources Fund, Inc. Prudential Trust Company 168,386 (57.12%)
(Class Z) FBO PRU-DC Trust Accounts
ATTN John Surdy
30 Scranton Office Park
Moosic, PA 18507-1796
Pru Defined Contributions Svcs 32,821 (11.13%)
FBO PRU - NON-TRUST ACCOUNTS
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Sector Funds, Inc.
Prudential Utility Fund (Class C) Prudential Trust Company 165,057 (6.54%)
FBO St. Charles Trading, Inc.
650 N. Raddant Rd.
Batavia, IL 60510
Prudential Small Company Fund, Inc. Prudential Trust Co 315,399 (21.06%)
(Class C) FBO BPA International, Inc
270 Madison Avenue
New York, NY 10016
A-2
FUND NAME REGISTRATION SHARES (PERCENT)
- --------- --------------------------------------- ---------- ---------
Prudential Small Company Fund, Inc. Pru Defined 957,717 (13.85%)
(Class Z) Contribution Svcs
Attn: JOHN SURDY
FBO PRU - NON-TRUST ACCOUNTS
30 Scranton Office Park
Moosic, PA 18507
Prudential Trust 1,795,998 (25.98%)
Company
FBO PRU - DC - TRUST ACCOUNTS
Attn: JOHN SURDY
30 Scranton Office Park
Moosic, PA 18507
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund Mark A. Davis 476,232 (6.39%)
(Class A) Investment Account
4305 Churchill Downs Dr.
Austin, TX 78746-1104
Prudential Tax-Managed Small-Cap Fund, Bost & Company C/F 11,945 (10.27%)
Inc. (Class Z) A/C # 7018109010
PO Box 534005
Pittsburgh, PA 15253
Prudential U.S. Emerging Growth Fund, Pru Defined Contributions 155,818 (5.22%)
Inc. (Class Z) FBO PRU DC QUALIFIED Clients
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Trust Company 291,801 (9.78%)
FBO PRU DC CLIENTS
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
The Prudential Investment Portfolios,
Inc.
Prudential Active Balanced Fund Prudential Trust Company 295,260 (20.87%)
(Class A) FBO PRU - DC TRUST ACCOUNTS
ATTN: John Surdy
30 Scranton Office Park
Moosic, PA 18507
The Prudential Insurance 204,959 (14.49%)
Company
Derivatives Management Group C
Attn: Linda Bitondo
2 Gateway Center
10th Floor
Mailstop NJ 04-10-5A
Newark, NJ 07102
Prudential Bank & Trust C/F 78,788 (5.57%)
Consuelo Rua
IRA DTD 09/21/00
450 Rovino Ave
Coral Gables, FL 33156-4261
A-3
FUND NAME REGISTRATION SHARES (PERCENT)
- --------- --------------------------------------- ---------- ---------
Prudential Active Balanced Fund Prudential Trust Company 20,953 (9.65%)
(Class C) FBO TOPCO, INC
107 Trumball Street
Elizabeth, NJ 07206
Prudential Active Balanced Fund Pru Defined Contribution 4,006,954 (38.00%)
(Class Z) Svcs FBO Pru-DC Qualified Clients
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Trust Company 6,515,131 (61.79%)
FBO Pru-DC Clients
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
The Prudential Investment Portfolios,
Inc.
Prudential Jennison Equity Pru Trust Company 655,180 (14.05%)
Opportunity Fund (Class A) FBO PRU - DC- TRUST ACCOUNTS
New Business Account
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Jennison Equity Pru Defined Contribution 306,027 (21.26%)
Opportunity Fund (Class Z) Svcs
FBO Pru-Non-Trust Accounts
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Trust Company 304,837 (21.18%)
FBO Pru-DC Trust Accounts
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
The Prudential Investment Portfolios,
Inc.
Prudential Jennison Growth Fund Prudential Trust Company 4,132,425 (5.64%)
(Class A) FBO PRU - DC Trust Accounts
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
Prudential Jennison Growth Fund Prudential Trust Company 51,759,393 (43.32%)
(Class Z) FBO Prudential Employee Saving Plan
Attn: Leann Vannuzzi
30 Ed Preate Dr.
Scranton, PA 18507
Prudential Trust Company 39,371,067 (32.96%)
FBO Pru-DC Trust Accounts
Attn: John Surdy
30 Scranton Office Park
Moosic, PA 18507
A-4
FUND NAME REGISTRATION SHARES (PERCENT)
- --------- --------------------------------------- ---------- ---------
Boston Safe Deposit & Trust 12,509,667 (10.47%)
As Trustee K-Mart PRT S
Core Account
1 Cabot Road # 28-0035
Medford, MA 02155
A-5
EXHIBIT B
YEAR IN WHICH CURRENT BOARD MEMBER STANDING
FOR RE-ELECTION BECAME A MEMBER OF THE BOARD*BOARD
NAME OF FUNDS
-------------------------------------------------------------------------------------------TAX
STOCK INVESTMENT NATURAL SMALL TAX SMALL- EMERGING 20/20
DIRECTORS/TRUSTEES INDEX PORTFOLIOS RESOURCES COMPANY SECTOR EQUITY GLOBAL LTD. INTERM. MULTI-
DIRECTORS/TRUSTEES ALLOCATION EQUITY INCOME MATURITY GLOBAL JENNISON SECTORCAP GROWTH FOCUS
- --------------------------------- ------------- ----------- ----------- ----------- ----------- ----------- ----------------------------- -------- ---------- --------- -------- -------- -------- -------- -------- --------
Edward D. Beach.................. 1987 1986 1986 -- -- -- 1990
Fenster, Saul K. ........... 2000 2000 2000 2000 2000 2000 2000 2000 2000
Gold, Delayne D. Gold.................. --........... 1996 1996 1996 1982 -- 1990 -- -- --
Donald D. Lennox................. 1987 -- 1987 -- -- -- 19901981 1998 1997 1996 1998
Gunia, Robert F. ........... 1996 1996 1996 1996 1996 1998 1997 1996 1998
McCorkindale, Douglas McCorkindale............. 1987 -- 1987 -- -- -- 1990H. ... 1996 1996 2000 1996 1996 1998 1997 1996 1998
McDonald, Jr., W. Scott .... 2000 2000 2000 2000 2000 2000 2000 2000 2000
Mooney, Thomas T. Mooney................. 1987 1986 1986 -- -- -- 1990.......... 1996 1996 2000 1996 1996 1998 1997 1996 1998
Munn, Stephen P. Munn.................. -- -- -- -- -- -- --........... 1996 1996 2000 1991 1996 1998 1997 1996 1998
Odenath, Jr., David R. ..... 1999 1999 1999 1999 1999 1999 1999 1999 1999
Redeker, Richard A. Redeker............... 1993 1993 1993 1993 1993........ 1996 1995 2000 1995 1993 1998 1997 1996 1998
Rice, Judy A. .............. 2000 2000 2000 2000 2000 2000 2000 2000 2000
Smith, Robin B. Smith................... -- -- -- -- --............ 1996 1995 --1996 1996 1996 1998 1997 1996 1998
Weil, III, Louis A. Weil, III............... 1987 -- 1986 -- -- -- 1990........ 1996 1996 2000 1991 1996 1998 1997 1996 1998
Whitehead, Clay T. Whitehead................ -- -- -- -- -- -- --
GLOBAL
SMALL GLOBAL TOTAL
DIRECTORS/TRUSTEES COMPANIES UTILITY GOV'T RETURN
- --------------------------------- ------------- ----------- ----------- -----------
Edward D. Beach.................. -- -- 1987 1986
Delayne D. Gold.................. 1982 1981 -- --
Donald D. Lennox................. -- -- 1987 --
Douglas McCorkindale............. -- -- 1987 --
Thomas T. Mooney................. -- -- 1987 1986
Stephen P. Munn.................. 1991 -- -- --
Richard A. Redeker............... 1995 1993 1993 1993
Robin B. Smith................... -- -- -- 1986
Louis A. Weil, III............... 1991 -- 1987 --
Clay T. Whitehead................ -- -- -- --......... 1996 1996 1999 1996 1996 1998 1997 1996 1998
- ----------------
*Excludes Robert F. Gunia and Mendel A. Melzer, who are not presently Members of
these Boards. All nominees were nominated in 1996.
A-1B-1
EXHIBIT BC
FUND OWNERSHIP OF NOMINEES AND CURRENT
BOARD MEMBERS STANDING FOR RE-ELECTIONELECTION
NUMBER OF SHARES HELD AS OF AUGUST 9, 1996NOVEMBER 3, 2000
NAME OF FUNDS
---------------------------------------------------------------------------------------DIRECTOR/ 20/20 ACTIVE EMERGING EQUITY GLOBAL LTD. INTERM. MULTI-
DIRECTORS/TRUSTEES ALLOCATION EQUITY INCOME MATURITY GLOBAL JENNISON SECTORFINANCIAL HEALTH NATURAL SMALL
TRUSTEE FOCUS BALANCED GROWTH OPPORTUNITY SERVICES GROWTH SCIENCE RESOURCES COMPANY
- -------------------------------------- -------- -------- -------- ----------- ----------- ----------- ----------- ----------- ----------- --------- -------- -------- --------- --------
Edward D. Beach................ 507 401 423 -- -- -- --
Saul K. Fenster............
Delayne Dedrick Gold........... 980 992 987 1,972 -- -- 2,908Gold....... 892 1,356 1,342 1,080
Robert F. Gunia................ -- 1,463 -- -- -- -- 277
Donald D. Lennox............... 1,652 -- -- -- 970 -- 1,727Gunia............
Douglas H. McCorkindale........ -- -- -- -- -- -- --
Mendel A. Melzer............... -- -- -- -- -- -- --McCorkindale.... 855 782 730 909
W. Scott McDonald, Jr...... 509
Thomas T. Mooney............... 443 2,943 819 -- -- -- 1,320Mooney........... 300 672 4,256 413
Stephen P. Munn................ -- -- -- -- -- -- --Munn............ 5,247 980 3,298 1,168 500 849 500 833
David R. Odenath, Jr....... 2,206
Richard A. Redeker............. -- 8,915 -- -- -- -- 8,315Redeker......... 552 15,846
Judy A. Rice............... 2,207 7,675 3,721
Robin B. Smith................. -- -- -- -- -- 543 2,369Smith............. 449 110 589 23 31 2,247 23 812 693
Louis A. Weil, III............. 809 -- 504 639 -- -- 651III......... 754 1,390 297 408 818 875
Clay T. Whitehead.............. -- -- -- -- -- -- --Whitehead..........
GLOBAL
SMALL GLOBAL TOTAL
DIRECTORS/TRUSTEES COMPANIESTAX
DIRECTOR/ STOCK TAX SMALL-
TRUSTEE INDEX EQUITY CAP TECHNOLOGY UTILITY
GOV'T RETURN
- ------------------------------- ------------- --------- ----------- ------------------ -------- -------- -------- ---------- --------
Edward D. Beach................ -- -- -- --
Saul K. Fenster............
Delayne Dedrick Gold........... 1,080Gold....... 6,458 -- --
Robert F. Gunia................ -- 445 -- --
Donald D. Lennox............... -- -- 4,168 --Gunia............
Douglas H. McCorkindale........ -- -- -- --
Mendel A. Melzer............... -- -- -- --McCorkindale.... 112 409 1,664
W. Scott McDonald, Jr......
Thomas T. Mooney............... -- -- 2,720 3,567Mooney........... 309 492 1,639
Stephen P. Munn................ 569 -- -- --Munn............ 128 500 511 2,552
David R. Odenath, Jr....... 1,619
Richard A. Redeker............. -- 12,947 -- --Redeker.........
Judy A. Rice............... 10,881
Robin B. Smith................. -- -- -- 6,125Smith............. 604 426 560 29 2,238
Louis A. Weil, III............. 598 -- -- --III......... 446
Clay T. Whitehead.............. -- -- -- --Whitehead..........
B-1C-1
EXHIBIT CD
BOARD AND COMMITTEE INFORMATION**INFORMATION (1)
GLOBALPRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL
20/20 INDEX NATURAL SECTOR SMALL TAX-MANAGED PRUDENTIAL
FOCUS SERIES RESOURCES FUNDS, COMPANY SMALL-CAP TAX-MANAGED
FUND FUND FUND, INC. INC. FUND, INC. FUND, INC. EQUITY LTD. INTERM. MULTI-
ALLOCATION(1) EQUITY(2) INCOME(1) MATURITY GLOBAL(3) JENNISON SECTOR
------------- ----------- ----------- ----------- ----------- ----------- -----------FUND
------- ---------- ---------- ---------- ---------- ------------ ------------
Annual Fee*.................. $ 8,500 $ 7,500 $ 7,500 $ 10,000 $ 7,500 $ 7,500 $ 7,500Fee(2).................... N/A N/A N/A N/A N/A N/A N/A
Fee for Attendance at Board
Meetings.................... NA NA NA NA NA NA NAMeetings(2).................... N/A N/A N/A N/A N/A N/A N/A
Fee for Attendance at Committee
Meetings.......... NA NA NA NA NA NA NAMeetings(2).................... N/A N/A N/A N/A N/A N/A N/A
Number of Board Meetings during
the Last Fiscal Year........................ 7 4 8 4 5 1 5Year........... 6 6 6 6 6 6 6
Number of Audit Committee
Meetings during the Last Fiscal
Year................. 2 2 2Year*.......................... 4 2 0 24 4 4 4 4 4
Number of Nominating Committee
Meetings during the Last Fiscal
Year........Year*.......................... 2 1 0 0 0 0 01 1 1 1 1
Size of Current Board........ 7 7 7 9 5 3 7Board............ 13 13 10 13 13 13 13
GLOBAL
SMALL GLOBAL TOTAL
COMPANIES(2)(4) UTILITY(2) GOV'T(1)(2) RETURN(2)
----------------- ----------- -------------PRUDENTIAL THE
U.S. PRUDENTIAL
EMERGING INVESTMENT
GROWTH PORTFOLIOS,
FUND, INC. INC.
---------- -----------
Annual Fee*.................. $ 6,000 $ 9,000 $ 10,000 $ 8,000Fee(2).................... N/A N/A
Fee for Attendance at Board
Meetings.................... NA NA $ 1,250 $ 1,500Meetings(2).................... N/A N/A
Fee for Attendance at Committee
Meetings.......... NA NA NA NAMeetings(2).................... N/A N/A
Number of Board Meetings during
the Last Fiscal Year........................ 5Year........... 6 10 86
Number of Audit Committee
Meetings during the Last Fiscal
Year................. 3 2 2 2Year*.......................... 4 4
Number of Nominating Committee
Meetings during the Last Fiscal
Year........ 0 0 0 0Year*.......................... 1 1
Size of Current Board........ 6 6 7 7Board............ 13 13
- ------------------------------------------------------
* Reflects compensation rates in effect prior to changes described in proxy
statement. Board Members who were not independent did not receive
compensation from the Funds.
** Only the independent Directors/TrusteesIndependent Directors serve on the Funds'Fund's Audit and Nominating
Committees.
(1) Louis A. Weil, IIINo fund within the Fund Complex has a bonus, pension, profit sharing or
retirement plan.
(2) While Board and Committee members do not receive attendance fees, they do
receive compensation for Board and Committee membership. See page 5 of this
proxy statement. No Director attended fewer than 75% of the aggregate of the total number of
Board and Committee meetings held during the most recentlast fiscal year.
(2) Harry A. Jacobs, Jr. attended fewer than 75%year of the number of Board meetings
held during the most recent fiscal year.
(3)Richard A. Redeker attended fewer than 75% of the number of Board meetings
held during the most recent fiscal year.
(4) Stephen P. Munn and Louis A. Weil, III attended fewer than 75% of the
aggregate of the total number of Board and Committee meetings held during
the most recent fiscal year.
C-1each Fund.
D-1
EXHIBIT DE
OFFICER INFORMATION
OFFICER SINCE
--------------------------------------------------------------------------
NAME, AGE, PRINCIPAL GLOBALTAX- TAX-
BUSINESS OCCUPATION EQUITY LTD. INTERM. MULTI-
FOR THE 20/20 STOCK INVESTMENT NATURAL SMALL MANAGED MANAGED EMERGING
PAST FIVE YEARS OFFICE ALLOCATIONFOCUS INDEX PORTFOLIOS RESOURCES SECTOR COMPANY EQUITY INCOME MATURITY GLOBAL JENNISON SECTORSMALL-CAP GROWTH
- ------------------------------------------------------------------- ------ ----- ----- ---------- --------- ---------- ------ ------------- ------- --------- -------- ------ -------- ------
Richard A. Redeker (53),
David R. Odenath, Jr. (43) President 1995 1995 1995 1995 1995 1995 19952000 2000 2000 2000 2000 2000 2000 2000 2000
President (since June 1999) of
Prudential Investments; President,
Chief Executive Officer and DirectorChief
Operating Officer (since October 1993), PMF;
ExecutiveJune
1999) of Prudential Investments
Fund Management LLC (PIFM); Senior
Vice President Director and
Member(since June 1999)
of the Operating Committee
(since October 1993),The Prudential Securities; Director (since October
1993)Insurance
Company of Prudential Securities Group,
Inc.; ExecutiveAmerica Prudential;
formerly Senior Vice President
PIC
(since July 1994); Director (since
January 1994)(Prudential) (August 1993-May
1999) of Prudential Mutual Fund
Distributors, Inc. (PMFD) and
Prudential Mutual Fund Services, Inc.
(PMFS); formerly Senior Executive Vice
President and Director of Kemper
Financial Services, Inc. (September
1978-September 1993); President and
Director of The High Yield Income Fund,PaineWebber Group, Inc.
Robert F. Gunia (49)(53), Vice 1997 1992 1995 1987 1987 1987 1990 1995 1995 1990
Director (since January 1989),1998 1998 1996
Executive Vice President and Chief President
Administrative Officer (since July
1990)June
1999) of Prudential Investments;
Corporate Vice President (since
September 1997) of Prudential;
Executive Vice President and
Treasurer (since December 1996) of
PIFM; President (since April 1999)
of Prudential Investment
Management Services LLC (PIMS);
formerly Senior Vice President
(March 1987-
May 1999) of Prudential Securities
Incorporated (Prudential
Securities); formerly Chief
Administrative Officer
(July 1990-September 1996),
Director (January 1989-September
1996), and Executive Vice
President, Treasurer and Chief
Financial Officer (since June 1987) of PMF; Comptroller
of the Money Management Group(June 1987-
September 1996) of Prudential
(since 1996); Senior Vice
President (since March 1987) of
Prudential Securities; Executive Vice
President,
Treasurer and Comptroller (since March
1991) of PMFD; Director (since June
1987) of PMFS; Vice President and
Director of the Asia PacificMutual Fund Management, Inc.
(since May 1989)
SusanGrace C. CoteTorres (41), Treasurer 1987 -- 1987 -- -- -- 1990
Managing Director, Prudential
Investment Advisors, and Vice
President, PIC (since February 1995);
Senior Vice President (January
1989-January 1995) of PMF; Senior Vice
President (January 1992-January 1995)
and Vice President (January
1986-December 1991) of Prudential
Securities
Eugene S. Stark (38), Treasurer -- 1995 -- -- -- 1995 --1997 1997 1998 1997 1998 1998 1998 1997 1996
First Vice President (since January
1990)and
December 1996) of PMFPIFM; First Vice Principal
President (since Financial
March 1994) of Prudential and
Securities; formerly First Vice Accounting
President (March 1994-September Officer
1996), Prudential Mutual Fund
Management, Inc.
E-1
OFFICER SINCE
--------------------------------------------------------------------------
NAME, AGE, PRINCIPAL TAX- TAX-
BUSINESS OCCUPATION SMALL
FOR THE PAST FIVE YEARS COMPANIES UTILITY
- ---------------------------------------- --------- -------
Richard A. Redeker (53), 1995 1995
President, Chief Executive Officer and
Director (since October 1993), PMF;
Executive Vice President, Director and
Member of the Operating Committee
(since October 1993), Prudential
Securities; Director (since October
1993) of Prudential Securities Group,
Inc.; Executive Vice President, PIC
(since July 1994); Director (since
January 1994) of Prudential Mutual Fund
Distributors, Inc. (PMFD) and
Prudential Mutual Fund Services, Inc.
(PMFS); formerly Senior Executive Vice
President and Director of Kemper
Financial Services, Inc. (September
1978-September 1993); President and
Director of The High Yield Income Fund,
Inc.
Robert F. Gunia (49), 1987 1987
Director (since January 1989), Chief
Administrative Officer (since July
1990), and Executive Vice President,
Treasurer and Chief Financial Officer
(since June 1987) of PMF; Comptroller
of the Money Management Group of
Prudential (since 1996); Senior Vice
President (since March 1987) of
Prudential Securities; Executive Vice
President,
Treasurer and Comptroller (since March
1991) of PMFD; Director (since June
1987) of PMFS; Vice President and
Director of the Asia Pacific Fund, Inc.
(since May 1989)
Susan C. Cote (41), -- --
Managing Director, Prudential
Investment Advisors, and Vice
President, PIC (since February 1995);
Senior Vice President (January
1989-January 1995) of PMF; Senior Vice
President (January 1992-January 1995)
and Vice President (January
1986-December 1991) of Prudential
Securities
Eugene S. Stark (38), 1995 1995
First Vice President (since January
1990) of PMF
NAME, AGE, PRINCIPAL GLOBAL
BUSINESS OCCUPATION GLOBAL TOTAL
FOR THE PAST FIVE YEARS GOV'T RETURN
- ---------------------------------------- ------ ------
Richard A. Redeker (53), 1995 1995
President, Chief Executive Officer and
Director (since October 1993), PMF;
Executive Vice President, Director and
Member of the Operating Committee
(since October 1993), Prudential
Securities; Director (since October
1993) of Prudential Securities Group,
Inc.; Executive Vice President, PIC
(since July 1994); Director (since
January 1994) of Prudential Mutual Fund
Distributors, Inc. (PMFD) and
Prudential Mutual Fund Services, Inc.
(PMFS); formerly Senior Executive Vice
President and Director of Kemper
Financial Services, Inc. (September
1978-September 1993); President and
Director of The High Yield Income Fund,
Inc.
Robert F. Gunia (49), 1987 1986
Director (since January 1989), Chief
Administrative Officer (since July
1990), and Executive Vice President,
Treasurer and Chief Financial Officer
(since June 1987) of PMF; Comptroller
of the Money Management Group of
Prudential (since 1996); Senior Vice
President (since March 1987) of
Prudential Securities; Executive Vice
President,
Treasurer and Comptroller (since March
1991) of PMFD; Director (since June
1987) of PMFS; Vice President and
Director of the Asia Pacific Fund, Inc.
(since May 1989)
Susan C. Cote (41), 1990 --
Managing Director, Prudential
Investment Advisors, and Vice
President, PIC (since February 1995);
Senior Vice President (January
1989-January 1995) of PMF; Senior Vice
President (January 1992-January 1995)
and Vice President (January
1986-December 1991) of Prudential
Securities
Eugene S. Stark (38), -- 1995
First Vice President (since January
1990) of PMF
D-1
NAME, AGE, PRINCIPAL GLOBAL
BUSINESS OCCUPATION EQUITY LTD. INTERM. MULTI-
FOR THE20/20 STOCK INVESTMENT NATURAL SMALL MANAGED MANAGED EMERGING
PAST FIVE YEARS OFFICE ALLOCATIONFOCUS INDEX PORTFOLIOS RESOURCES SECTOR COMPANY EQUITY INCOME MATURITY GLOBAL JENNISON SECTORSMALL-CAP GROWTH
- ------------------------------------------------------------------- ------ ----- ----- ---------- --------- ---------- ------ ------------- ------- --------- -------- ------ -------- ------
Grace C. Torres (37), Treasurer -- -- -- 1995 1995 -- --
First Vice President (since March 1994)
of PMF; First Vice President of
Prudential Securities (since March
1994); prior thereto, Vice President of
Bankers Trust Corporation
Stephen M. Ungerman (42), Assistant 1995 1995 1995 1995 1995 1995 1995
First Vice President (since February Treasurer
1993) of PMF; prior thereto, Senior Tax
Manager of Price Waterhouse
(1981-January 1993)
S. Jane Rose (50)
Marguerite E. H. Morrison (44), Secretary 1987 1984 1986 1990 1988 1995 1990
Senior1999 1999 1999 2000 1999 1999 1999 1999 1999
Department Vice President and
Senior
CounselChief Legal Officer (since August
2000) of PMF; Seniorthe Mutual Funds Law
Division of Prudential; Vice
President and SeniorAssociate General
Counsel (since December 1996) of
Prudential
Securities (since July 1992);PIFM; formerly Vice President and
Associate General Counsel
(September 1987-
September 1996) of Prudential
Securities
Deborah A. Docs (38), Assistant -- 1989 -- -- 1989 -- --Securities; Vice President and
Associate General Counsel
(June 1991-September 1996) of
Prudential Mutual Fund
Management, Inc.
William V. Healey (46), Assistant 2000 2000 2000 2000 2000 2000 2000 2000 2000
Assistant Secretary, Counsel (since January 1993) of PMF;
Vice Secretary
President and Associate General
Counsel of Prudential Securitiesand Chief
Legal Officer of Prudential
Investments (since January 1993)August 1998);
previously Associate
Vice President (January 1990-
December 1992) and Assistant General
Counsel (November 1991-December 1992)
of PMF
Marguerite E.H. Morrison (40), Assistant 1991 -- 1991 -- -- -- 1991
Vice President and Associate General Secretary
CounselDirector, ICI Mutual Insurance
Company (since June 1991) of PMF; Vice
President and1999);
formerly Associate General Counsel
of Prudential Securities
Ellyn C. Vogin (35)The Dreyfus Corporation
(Dreyfus), a subsidiary of Mellon
Bank, N.A. (Mellon Bank), and an
officer and/or director of various
affiliates of Mellon Bank and
Dreyfus.
Jonathan Shain (42), Assistant 2000 2000 2000 -- -- -- 1995 -- 1995 --
Vice President and Associate General Secretary
Counsel (since March 1995) of PMF; Vice
President and Associate2000 2000 2000 2000 2000
Assistant General Counsel of Secretary
Prudential Securities (since March
1995); prior thereto, associated with
the law firm of Fulbright & Jaworski
LLP
NAME, AGE, PRINCIPAL
BUSINESS OCCUPATION SMALL
FOR THE PAST FIVE YEARS COMPANIES UTILITY
- ---------------------------------------- --------- -------
Grace C. Torres (37), -- --
First Vice President (since March 1994)
of PMF; First Vice President of
Prudential Securities (since March
1994); prior thereto, Vice President of
Bankers Trust Corporation
Stephen M. Ungerman (42), 1995 1995
First Vice President (since February
1993) of PMF; prior thereto, Senior Tax
Manager of Price Waterhouse
(1981-January 1993)
S. Jane Rose (50), 1984 1985
Senior Vice President and Senior
Counsel of PMF; Senior Vice President
and Senior Counsel of Prudential
Securities (since July 1992)August 1998);
formerly, Vice PresidentAttorney with Fleet
Bank, N.A. (January 1997-July
1998) and Associate General
Counsel
(August 1994-January 1997) of Prudential Securities
Deborah A. Docs (38), -- --
Vice President and Associate General
Counsel (since January 1993) of PMF;
Vice President and Associate General
Counsel of Prudential Securities (since
January 1993); previously Associate
Vice President (January 1990-
December 1992) and Assistant General
Counsel (November 1991-December 1992)
of PMF
Marguerite E.H. Morrison (40), -- 1991
Vice President and Associate General
Counsel (since June 1991) of PMF; Vice
President and Associate General Counsel
of Prudential Securities
Ellyn C. Vogin (35), -- --
Vice President and Associate General
Counsel (since March 1995) of PMF; Vice
President and Associate General Counsel
of Prudential Securities (since March
1995); prior thereto, associated with
the law firm of Fulbright & Jaworski
LLP
NAME, AGE, PRINCIPAL GLOBAL
BUSINESS OCCUPATION GLOBAL TOTAL
FOR THE PAST FIVE YEARS GOV'T RETURN
- ---------------------------------------- ------ ------
Grace C. Torres (37), -- --
First Vice President (since March 1994)
of PMF; First Vice President of
Prudential Securities (since March
1994); prior thereto, Vice President of
Bankers Trust Corporation
Stephen M. Ungerman (42), 1995 1995
First Vice President (since February
1993) of PMF; prior thereto, Senior Tax
Manager of Price Waterhouse
(1981-January 1993)
S. Jane Rose (50), 1987 1986
Senior Vice President and Senior
Counsel of PMF; Senior Vice President
and Senior Counsel of Prudential
Securities (since July 1992); formerly
Vice President and Associate General
Counsel of Prudential Securities
Deborah A. Docs (38), -- --
Vice President and Associate General
Counsel (since January 1993) of PMF;
Vice President and Associate General
Counsel of Prudential Securities (since
January 1993); previously Associate
Vice President (January 1990-
December 1992) and Assistant General
Counsel (November 1991-December 1992)
of PMF
Marguerite E.H. Morrison (40), 1991 --
Vice President and Associate General
Counsel (since June 1991) of PMF; Vice
President and Associate General Counsel
of Prudential Securities
Ellyn C. Vogin (35), -- --
Vice President and Associate General
Counsel (since March 1995) of PMF; Vice
President and Associate General Counsel
of Prudential Securities (since March
1995); prior thereto, associated with
the law firm of Fulbright & Jaworski
LLPNew
York Life Insurance Company.
D-2E-2
EXHIBIT E
FUNDAMENTAL RESTRICTIONS
The fundamental investment restrictions of each Fund will be found on the
following pagesF
[FUND]
SUBADVISORY AGREEMENT
Agreement made as of this Exhibit (underscored language represents proposed
additions. Bracketed language represents proposed deletions):
E-1
PRUDENTIAL EQUITY FUND, INC.
INVESTMENT RESTRICTIONS
Theday of , 2001, between Prudential
Investments Fund may not:
1. Purchase any security (other than obligationsManagement LLC (PIFM or the Manager) and Jennison
Associates LLC (the Subadviser or Jennison).
WHEREAS, the Manager has entered into a Management Agreement, dated ,
2001 (the Management Agreement), with [FUND] (the Fund), a [Delaware business
trust/Maryland corporation] and a [diversified/nondiversified], open-end
management investment company registered under the Investment Company Act of
1940 (the 1940 Act), pursuant to which PIFM acts as Manager of the U.S. Government,Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund [on behalf of its agencies or instrumentalities) ifseries,
(individually and collectively, with the Fund, referred to herein as a result with respectthe Fund)]
and to 75%manage such portion of the Fund as the Manager shall from time to time
direct, and the Subadviser is willing to render such investment advisory
services; and
WHEREAS, this Agreement is intended to supersede the agreement, dated
, 2000, between PIFM and the Subadviser:
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors/Trustees of the Fund, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's total assets, more than 5%portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and
Statement of Additional Information (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 such portion of
the Fund's total assets (taken at current
value) would theninvestments as the Manager shall direct and shall
determine from time to time what investments and securities will be
invested in securities of a single issuer.
2. Make short sales of securities except short sales against-the-box (butpurchased, retained, sold or loaned by the Fund, may obtain such short-term credits as may be necessary for the
clearance of transactions).
3. Concentrate its investments in any one industry (no more than 25%and what portion of
the
Fund's total assets will be invested in any one industry).
4. Issue senior securities, borrow money or pledge its assets, except thatheld uninvested as cash.
(ii) In the Fund may borrow up to 20% of the value of the total assets
(calculated when the loan is made) for temporary, extraordinary or emergency
purposes or for the clearance of transactions. The Fund may pledge up to 20% of
the valueperformance of its total assets to secure such borrowings. Forduties and obligations under this
Agreement, the purposeSubadviser shall act in conformity with the [Articles
of this
restriction, obligationsIncorporation/Agreement and Declaration of Trust], By-Laws and
Prospectus of the Fund and with the instructions and directions of
the Manager and of the Board of Directors/Trustees of the Fund,
co-operate with the Manager's (or its designee's) personnel
responsible for monitoring the Fund's compliance, and will conform to
Directors pursuantand 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 deferred
compensation arrangements,be purchased or sold by such portion of the Fund, and
will place orders with or through such persons, brokers, dealers or
futures commission merchants (including but not limited to Prudential
Securities Incorporated or any broker or dealer affiliated with the
Subadviser) to carry out the policy with respect to brokerage as set
forth in the Fund's Prospectus or as the Board of Directors/Trustees
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
F-1
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 or any broker or dealer affiliated
with the Subadviser 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/Trustees 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 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
Board of Directors/Trustees such periodic and special reports as the
Directors/Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Directors/Trustees 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 Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's assets it manages, 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, the Subadviser and Manager understand and agree that if
the Manager manages the Fund in a when-issued"manager-of-managers" style, the
Manager will, among other things, (i) continually evaluate the
performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser,
(ii) periodically make recommendations to the Fund's Board as to
whether the contract with the Subadviser should be renewed, modified,
or delayed deliveryterminated and (iii) periodically report to the Fund's Board
regarding the results of its evaluation and monitoring functions. The
Subadviser recognizes that its services may be terminated or modified
pursuant to this process.
F-2
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors/Trustees 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 under the 1940 Act any such records as
are required to be maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Investment Advisers Act of 1940
and other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and
(ii) the maintenance of compliance procedures pursuant to paragraph 1(d)
hereof as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund 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. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation
therefor, a fee equal to the percentage of the Fund's average daily net
assets of the portion of the Fund managed by the Subadviser as described in
the attached Schedule A.
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/Trustees of the Fund or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) 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' 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) 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/Trustee, 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.
F-3
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 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 INVESTMENTS FUND MANAGEMENT LLC
By:
--------------------------------------------
Robert F. Gunia
EXECUTIVE VICE PRESIDENT
JENNISON ASSOCIATES LLC
By:
--------------------------------------------
Karen E. Kohler
EXECUTIVE VICE PRESIDENT
F-4
SCHEDULE A
Prudential 20/20 Focus Fund................................. 0.375%
Prudential Natural Resources Fund, Inc...................... 0.375%
Prudential Sector Funds, Inc.
Prudential Financial Services Fund...................... 0.375%*
Prudential Technology Fund.............................. 0.375%*
Prudential Utility Fund................................. 0.300% to $250 mil.
0.238% next $500 mil.
0.203% next $750 mil.
0.170% next $500 mil.
0.140% next $2 bil.
0.122% next $2 bil.
0.105% over $6 bil.
Prudential Small Company Fund, Inc.......................... 0.455%
Prudential U.S. Emerging Growth Fund, Inc................... 0.300%
- ------------------------
* As to the Strategically Managed segment's assets
F-5
EXHIBIT G-1
[FUND]
MANAGEMENT AGREEMENT
Agreement made this day of , 2001, between , a
[Delaware business trust/ Maryland corporation] (the Fund), and Prudential
Investments Fund Management LLC, a New York limited liability company (the
Manager).
W I T N E S S E T H
WHEREAS, the Fund is a [diversified/nondiversified], 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 Fund 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 business 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
each series thereof, if any (each a Portfolio), and as administrator of its
business 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. Subject to the approval of the
Board of Directors/ Trustees of the Fund, the Manager is authorized to enter
into a subadvisory agreement with The Prudential Investment Corporation,
Jennison Associates LLC, or any other subadviser, whether or not affiliated with
the Manager (each, a Subadviser), pursuant to which such Subadviser shall
furnish to the Fund the investment advisory services in connection with the
management of the Fund (each, a Subadvisory Agreement). Subject to the approval
of the Board of Directors/Trustees of the Fund, the Manager is authorized to
retain more than one Subadviser for the Fund or any Portfolio, and if the Fund
or any Portfolio has more than one Subadviser, the Manager is authorized to
allocate the Fund's or the Portfolio's assets among the Subadvisers. The Manager
will continue to have responsibility for all investment advisory services
furnished pursuant to any Subadvisory Agreement. The Fund and Manager understand
and agree that the Manager may manage the Fund in a "manager-of-managers" style
with either a single or multiple Subadvisers, which contemplates that the
Manager will, among other things and pursuant to an Order issued by the
Securities and Exchange Commission (SEC): (i) continually evaluate the
performance of the Subadviser to the Fund and to each Portfolio, if applicable,
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. The Fund recognizes that,
subject to the approval of the Board of Directors/Trustees of the Fund, a
Subadviser's services may be terminated or modified pursuant to the
"manager-of-managers" process and that the Manager may appoint a new Subadviser
for a Subadviser that is so removed.
2. Subject to the supervision of the Board of Directors/Trustees of the
Fund, the Manager shall administer the Fund's business 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 any Subadvisory Agreement, the Manager shall
manage the investment operations of the Fund and the composition of the Fund's
or Portfolio's portfolio including the purchase, retention and
G-1(a)
disposition thereof, in accordance with the Fund's and each Portfolio's
investment objectives, policies and restrictions as stated in the Fund's SEC
registration statement, and subject to the following understandings:
(a) The Manager (or a Subadviser under the Manager's supervision) shall
provide supervision of the Fund's and each Portfolio's investments, and
shall determine from time to time what investments or securities will be
purchased, retained, sold or loaned by the Fund and each Portfolio, and what
portion of the assets will be invested or held uninvested as cash.
(b) The Manager, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the [Articles of
Incorporation/Agreement and Declaration of Trust] and By-Laws of the Fund
and the Fund's SEC registration statement and with the instructions and
directions of the Board of Directors/Trustees 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. In connection therewith, the Manager
shall, among other things, prepare and file (or cause to be prepared and
filed) such reports as are, or may in the future be, required by the SEC.
(c) The Manager (or the Subadviser under the Manager's supervision)
shall determine the securities and futures contracts to be purchased or sold
by the Fund and each Portfolio 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 or as the Board of
Directors/Trustees may direct from time to time. In providing the Fund with
investment supervision, it is recognized that the Manager (or the Subadviser
under the Manager's supervision) will give primary consideration to securing
the most favorable price and efficient execution. Consistent with this
policy, the Manager (or Subadviser under the Manager's supervision) 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 (or Subadviser) may be a
party. It is understood that Prudential Securities Incorporated (or a
broker-dealer affiliated with a Subadviser) 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 Manager (or
Subadviser) have access to supplemental investment and market research and
security and economic analysis provided by brokers or futures commission
merchants, and that such brokers or futures commission merchants may execute
brokerage transactions at a higher cost to the Fund 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 (or the Subadviser under the Manager's supervision)
is authorized to pay higher brokerage commissions for the purchase and sale
of options,securities and futures contracts for the Fund to brokers or futures
commission merchants who provide such research and forward foreign currency exchange contracts and collateral arrangementsanalysis, subject to
review by the Fund's Board of Directors/Trustees 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 (or the Subadviser) in connection with its services
to other clients.
On occasions when the Manager (or a Subadviser under the Manager's
supervision) deems the purchase or sale of a security or a futures contract
to be in the best interest of the Fund as well as other clients of the
Manager (or the Subadviser), the Manager (or 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 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 (or the
Subadviser) in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
G-1(b)
(d) The Manager (or the Subadviser under the Manager's supervision)
shall maintain all books and records with respect to the Fund's portfolio
transactions and shall render to the Fund's Board of Directors/Trustees such
periodic and special reports as the Board may reasonably request.
(e) The Manager (or the Subadviser under the Manager's supervision)
shall be responsible for the financial and accounting records to be
maintained by the Fund (including those being maintained by the Fund's
Custodian).
(f) The Manager (or the Subadviser under the Manager's supervision)
shall provide the Fund's Custodian on each business day information relating
to all transactions concerning the Fund's 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.
(h) The Manager shall make reasonably available its employees and
officers for consultation with any of the Directors/Trustees or officers or
employees of the Fund with respect to any matter discussed herein,
including, without limitation, the valuation of the Fund's securities.
3. The Fund has delivered to the Manager copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
(a) [Articles of Incorporation/Agreement and Declaration of Trust];
(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/Trustees 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 SEC relating to the Fund and its shares of [common stock/beneficial
interest] and all amendments thereto; and
(e) Prospectus and Statement of Additional Information of the Fund and
each of its Portfolios.
4. The Manager shall authorize and permit any of its officers and employees
who may be elected as Directors/Trustees 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
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 Fund 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 employees of the Fund and the
Manager, except the fees and expenses of Directors/Trustees who are not
affiliated persons of the Manager or any Subadviser,
(ii) all expenses incurred by the Manager in connection with managing
the ordinary course of the Fund's business, other than those assumed by the
Fund herein, and
(iii) the fees, costs and expenses payable to a Subadviser pursuant to a
Subadvisory Agreement. The Fund assumes and will pay the expenses described
below:
(a) the fees and expenses incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets,
G-1(c)
(b) the fees and expenses of Fund Directors/Trustees who are not
"interested persons" of the Fund within the meaning of the 1940 Act,
(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 Fund
and the provision of any such records to the Manager useful to the
Manager in connection with the Manager's responsibility for the
accounting records of the Fund pursuant to Section 31 of the 1940 Act and
the rules promulgated thereunder, (iii) the pricing or valuation of the
shares of the Fund, including the cost of any pricing or valuation
service or services which may be retained pursuant to the authorization
of the Board of Directors/Trustees of the Fund, and (iv) for both mail
and wire orders, the cashiering function in connection with the issuance
and redemption of the Fund's securities,
(d) the fees and expenses of the Fund's Transfer and Dividend
Disbursing Agent 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 share certificates representing, and/or
non-negotiable share deposit receipts evidencing, shares of the Fund,
(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, and paying notice filing fees under state securities
laws, including the preparation and printing of the Fund's registration
statement and the Fund's prospectuses and statements of additional
information for filing under federal and state securities laws for such
purposes,
(l) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Directors'/Trustees'
meetings and of preparing, printing and mailing reports and notices 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 pursuant to a Distribution and
Service Plan adopted in a manner that is consistent with Rule 12b-1 under
the 1940 Act.
7. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Manager as full compensation therefor a fee
at the annual rate(s) as described on the attached Schedule A with respect to
the average daily net assets of each Portfolio of the Fund. This fee will be
computed daily, and will be paid to the Manager monthly.
8. 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 1940 Act) 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.
G-1(d)
9. 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 with respect to any
Portfolio by the Fund at any time, without the payment of any penalty, by the
Board of Directors/ Trustees of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Portfolio, or
by the Manager 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 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right of any
officer or employee of the Manager who may also be a Director/Trustee, 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.
11. Except as otherwise provided herein or authorized by the Board of
Directors/Trustees 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.
12. 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 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.
13. 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.
14. 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 Gateway Center Three, 100 Mulberry
Street, 4th Floor, Newark, NJ 07102-4077, Attention: Secretary; or (2) to the
Fund at Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102-4077,
Attention: President.
15. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
16. The Fund may use the name "[INSERT FUND NAME]" 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 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 "[INSERT FUND NAME]" 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.
G-1(e)
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.
[FUND]
By:
-----------------------------------------
David R. Odenath, Jr.
PRESIDENT
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
By:
-----------------------------------------
Robert F. Gunia
EXECUTIVE VICE PRESIDENT
G-1(f)
SCHEDULE A
Prudential 20/20 Focus Fund................................. 0.75% to $1 bil. and
0.70% over $1 bil.
Prudential Index Series Fund
Prudential Stock Index Fund............................. 0.30%
Prudential Natural Resources Fund, Inc...................... 0.75%
Prudential Sector Funds, Inc.
Prudential Financial Services Fund...................... 0.75%
Prudential Health Sciences Fund......................... 0.75%
Prudential Technology Fund.............................. 0.75%
Prudential Utility Fund................................. 0.60% to $250 mil.
0.50% next $500 mil.
0.45% next $750 mil.
0.40% next $500 mil.
0.35% next $2 bil.
0.325% next $2 bil.
0.30% over $6 bil.
Prudential Small Company Fund, Inc.......................... 0.70%
Prudential Tax Managed Funds
Prudential Tax-Managed Equity Fund...................... 0.65% to $500 mil. and
0.60% over $500 mil.
Prudential Tax-Managed Small-Cap Fund, Inc.................. 0.60%
Prudential U.S. Emerging Growth Fund, Inc................... 0.60% to $1 bil. and
0.55% above $1 bil.
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund......................... 0.65% to $1 bil.
0.60% above $1 bil.
Prudential Jennison Equity Opportunity Fund............. 0.60% to $300 mil.
0.575% above $300 mil.
Prudential Jennison Growth Fund......................... 0.60% to $300 mil.
0.575% next $4.7 bil.
0.55% over $5 bil.
G-1(g)
EXHIBIT G-2
[FUND]
SUBADVISORY AGREEMENT
Agreement made as of this day of , 200 , between Prudential
Investments Fund Management LLC (PIFM or the Manager) and The Prudential
Investment Corporation (the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement, dated ,
(the Management Agreement), with [FUND] (the Fund), a [Delaware business
trust/Maryland corporation] and a [diversified/nondiversified], open-end
management investment company registered under the Investment Company Act of
1940 (the 1940 Act), pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund [on behalf of its series,
(individually and collectively, with the Fund, referred to herein as the Fund)]
and to manage such portion of the Fund as the Manager shall from time to time
direct, and the Subadviser is willing to render such investment advisory
services; and
WHEREAS, this Agreement is intended to supersede the agreement, dated
, 2000, between PIFM and the Subadviser:
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors/Trustees of the Fund, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and
Statement of Additional Information (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 such portion of
the Fund's investments as the Manager shall direct and shall
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/Agreement and Declaration of Trust], By-Laws and
Prospectus of the Fund and with the instructions and directions of
the Manager and of the Board of Directors/Trustees of the Fund,
co-operate with the Manager's (or its designee's) personnel
responsible for monitoring the Fund's compliance, 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 such portion of the Fund, and
will place orders with or through such persons, brokers, dealers or
futures commission merchants (including but not limited to Prudential
Securities Incorporated or any broker or dealer affiliated with the
Subadviser) to carry out the policy with respect to brokerage as set
forth in the Fund's Prospectus or as the Board of Directors/Trustees
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
G-2(a)
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 or any broker or dealer affiliated
with the Subadviser 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 options,securities and futures contracts options onfor the Fund with such
brokers or futures commission merchants, subject to review by the
Fund's Board of Directors/Trustees 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 forward foreign currency exchangeefficient
execution. In such event, allocation of the securities or futures
contracts are not deemedso 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 issuancemost 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
Board of Directors/Trustees such periodic and special reports as the
Directors/Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Directors/Trustees 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 Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's assets it manages, 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, the Subadviser and Manager understand and agree that if
the Manager manages the Fund in a "manager-of-managers" style, the
Manager will, among other things, (i) continually evaluate the
performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser,
(ii) periodically make recommendations to the Fund's Board as to
whether the contract with the Subadviser should be renewed, modified,
or terminated and (iii) periodically report to the Fund's Board
regarding the results of its evaluation and monitoring functions. The
Subadviser recognizes that its services may be terminated or modified
pursuant to this process.
G-2(b)
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors/Trustees 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 under the 1940 Act any such records as
are required to be maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Investment Advisers Act of 1940
and other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and
(ii) the maintenance of compliance procedures pursuant to paragraph 1(d)
hereof as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund 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. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation
therefor, a fee equal to the percentage of the Fund's average daily net
assets of the portion of the Fund managed by the Subadviser as described in
the attached Schedule A.
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/Trustees of the Fund or by vote of a senior security or a pledge of assets.
5. Purchase any security if as a result the Fund would then hold more than
10%majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund, or by the
Manager or the Subadviser at any time, without the payment of any one issuer.
[6.Purchase any security if as a result the Fund would then have more than
5% of its total assets (taken at current value) invested in securities of
companies (including predecessors) less than three years old.]
6. [7.] Buy or sell commodities or commodity contracts or real estate or
-- interests in real estate except that the Fund may purchase and sell stock
index futures contracts, options thereon and forward foreign currency exchange
contracts and securities which are secured by real estate and securities of
companies which invest or deal in real estate.
7. [8.] Act as underwriter except to the extent that, in connection with the
-- disposition of portfolio securities, it may be deemed to be an
underwriter under certain federal securities laws.
8. [9.] Make investments for the purpose of exercising control or
-- management.
9. [10.] Invest in securities of other investment companies, except by
-- purchases in the open market involving only customary brokerage
commissions and as a result of whichpenalty,
on not more than 10%60 days' nor less than 30 days' written notice to the other
party. This Agreement shall terminate automatically in the event of its
total assets
(taken at current value) wouldassignment (as defined in the 1940 Act) 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 investeda
Director/Trustee, officer or employee of the Fund to engage in such securities,any other
business or except asto devote his or her time and attention in part to the
management or other aspects of any business, whether of a merger, consolidationsimilar 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.
G-2(c)
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 acquisition.
10.[11.] Invest in interests in oil, gas or other mineral exploration or
-- development programs, although it may invest in the common stock of
companies which invest in or sponsor such programs.
11.[12.] Make loans, except through (i) repurchase agreements and (ii) loans
-- of portfolio securities ([such loans being] limitedmaterial prepared for
distribution to 30% [10%]shareholders of the --
Fund's total assets). (The purchase of a portion of an issue of securities
distributed publicly, whetherFund or the public, which refer to the
Subadviser in any way, prior to use thereof and not to use material if the
purchase is made on the original
issuance, is not considered the making of a loan.)
E-2
PRUDENTIAL EQUITY INCOME FUND
INVESTMENT RESTRICTIONS
The Fund may not:
(1)Purchase securities on margin (but the Fund may obtainSubadviser reasonably objects in writing five business days (or such short-term
creditsother
time as may be necessary formutually agreed) after receipt thereof. Sales literature may
be furnished to the clearanceSubadviser 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 transactions); provided
that the
deposit or paymentFund must be obtained in conformity with the requirements of the 1940 Act.
9. This Agreement shall be governed by the Fund of initial or maintenance margin in
connection with stock index futures or options thereon is not considered the
purchase of a security on margin.
(2)Make short sales of securities or maintain a short position, except short
sales against-the-box.
(3)Issue senior securities, borrow money or pledge its assets, except that
the Fund may borrow up to 20%laws of the valueState of its total assets
(calculated whenNew York.
IN WITNESS WHEREOF, the loan is made) for temporary, extraordinary or emergency
purposes or for the clearance of transactions andParties hereto have caused this instrument to take advantage of
investment opportunities. The Fund may pledge up to 20%be
executed by their officers designated below as of the value of its
total assets to secure such borrowings. For purposes of this restriction, the
purchase or sale of securities on a when-issued or delayed delivery basis,
forward foreign currency exchange contractsday and collateralyear first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
By:
--------------------------------------------
Robert F. Gunia
EXECUTIVE VICE PRESIDENT
THE PRUDENTIAL INVESTMENT CORPORATION
By:
--------------------------------------------
PRESIDENT
G-2(d)
SCHEDULE A
Prudential Index Series Fund
Prudential Stock Index Fund............................... 0.150%
Prudential Sector Funds, Inc.
Prudential Financial Services Fund--Enhanced Index
Segment................................................. 0.375%
Prudential Health Sciences Fund--Enhanced Index Segment... 0.375%
Prudential Technology Fund--Enhanced Index Segment........ 0.375%
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund........................ 0.325%
Prudential Tax-Managed Small-Cap Fund, Inc.................. 0.390%
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund........................... 0.325%
G-2(e)
EXHIBIT H
AMENDMENTS TO FUNDAMENTAL
INVESTMENT RESTRICTIONS AND POLICIES
The following chart compares each Fund's fundamental investment restrictions
and collateral
arrangements relating thereto, collateral arranagements with respect to stock
index futures and options thereon and with respectpolicies as they currently exist to the writing of options on
securities or on stock indicesproposed amended provisions. For
more information about these changes, please refer to Proposals 5(a) through
5(h) in the Proxy Statement.
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
PRUDENTIAL 20/20 FOCUS FUND
The Fund may not:
1. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); provided that the deposit or
payment by the Fund of initial or
maintenance margin in connection with
futures or options is not considered the
purchase of a security on margin.
2. Make short sales of securities or The restriction will not change, but will
maintain a short position if, when added become non-fundamental.
together, more than 25% of the value of the
Fund's net assets would be (i) deposited as
collateral for the obligation to replace
securities borrowed to effect short sales
and (ii) allocated to segregated accounts in
connection with short sales. Short sales
"against-the-box" are not subject to this
limitation.
3. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks up to 20% of the value of the Investment Company Act of 1940, and the
its total assets (calculated when the loan rules and regulations promulgate thereunder,
is made) for temporary, extraordinary or as each may be amended from time to time
emergency purposes or for the clearance of except to the extent that the Fund may be
transactions. The Fund may pledge up to 20% permitted to do so by exemptive order, SEC
of the value of its total assets to secure release, no-action letter or similar relief
such borrowings. For purposes of this or interpretations (collectively, the "1940
restriction, the purchase or sale of Act Laws, Interpretations and Exemptions").
securities on a when-issued or delayed For purposes of this restriction, the
delivery basis, foreign currency forward purchase or sale of securities on a
contracts and collateral arrangements when-issued or delayed delivery basis,
relating thereto, and collateral reverse repurchase agreements, dollar rolls,
arrangements with respect to futures short sales, derivative and hedging
contracts and options thereon and with transactions such as interest rate swap
respect to the writing of options and transactions, and collateral arrangements
obligations of the Fund to Trustees pursuant with respect thereto, and transactions
to deferred compensation arrangements are similar to any of the foregoing and
not deemed to be a pledge of assets subject collateral arrangements with respect
to this restriction. thereto, and obligations of the Fund to
Trustees pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets or the issuance of a senior
security.
(4)Purchase any security (other than obligations of the U.S. Government, its
agencies or instrumentalities) if as a result: (i) with respect to 75%
H-1
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
4. Purchase any security (other than Purchase any security if as a result more
obligations of the U.S. government, its than 25% or more of the Fund's total assets
agencies or instrumentalities) if as a would be invested in the securities of
result 25% or more of the Fund's total issuers having their principal business
assets (determined at the time of the activities in the same industry, except for
investment) would be invested in a single temporary defensive purposes, and except
industry. that this limitation does not apply to
securities issued or guaranteed by the U.S.
government, its agencies or
instrumentalities.
5. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. estate are not subject to this limitation,
and except that the Fund may exercise rights
relating to such securities, including the
right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
6. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that the Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon, and foreign currency (i) derivative, hedging and similar
forward contracts. instruments such as financial futures
contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
7. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
8. Make investments for the purpose of This restriction will not change, but will
exercising control or management. become non-fundamental.
9. Invest in securities of other This restriction will become non-fundamental
non-affiliated investment companies, except and, as described in Proposal No. 5(h), is
by purchases in the open market involving expected to be amended by the Board.
only customary brokerage commissions and as
a result of which the Fund will not hold
more than 3% of the outstanding voting
securities of any one investment company,
will not have invested more
than 5% of the Fund's total assets (determined at
the time of investment) would then be invested in securities of a single issuer,
or (ii) more than 25% of the Fund's total assets (determined at the time of
investment) would be invested in a single industry. As to utility companies,
gas, electric and telephone companies will be considered as separate industries.
(5)Purchase any security if as a result the Fund would then hold more than
10% of the outstanding voting securities of an issuer.
[(6)
Purchase any security if as a result the Fund would then
H-2
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
than 5% of its total assets in any one
investment company and will not have
invested more than 10% of its total assets
(determined at the time of investment) in
such securities of one or more investment
companies, or except as part of a merger,
consolidation or other acquisition.
10. Make loans, except through The Fund may make loans, including loans of
(a) repurchase agreements and (b) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 33 1/3 of trade claims, loan participations or similar
the Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
11. Purchase more than 10% of all The restriction will not change, but will
outstanding voting securities of any one become non-fundamental.
issuer.
PRUDENTIAL INDEX SERIES FUND
- -PRUDENTIAL STOCK INDEX FUND
The Fund may not:
1. Purchase any security if, as a result, Purchase the securities of any issuer if, as
with respect to 75% of the Fund's total a result, the Fund would fail to be a
assets, more than 5% of the value of its diversified company within the meaning of
total assets (determined at the time of the Investment Company Act of 1940 Act, and
investment) would then be invested in the the rules and regulations promulgated
securities of any one issuer. thereunder, as each may be amended from time
to time, except to the extent that the Fund
may be permitted to do so by exemptive
order, SEC release, no-action letter or
similar relief or interpretations
(collectively, the "1940 Act Laws,
Interpretations and Exemptions").
2. Purchase a security if more than 10% of The restriction will not change, but will
the outstanding voting securities of any one become non-fundamental, to the extent not
issuer would be held by the Fund. included within restriction no. 1.
3. Purchase a security if, as a result, 25% Purchase any security if as a result 25% or
or more of the value of its total assets more of the Fund's total assets would be
(determined at the time of investment) would invested in the securities of issuers having
be invested in securities of one or more their principal business activities in the
issuers having their principal business same industry, except for temporary
activities in the same industry. This defensive purposes, and except that this
restriction does not apply to obligations limitation does not apply to securities
issued or guaranteed by the United States issued or guaranteed by the U.S. government,
Government, its agencies or its agencies or instrumentalities.
instrumentalities.
H-3
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
4. Purchase or sell real estate or interests Buy or sell real estate, except that
therein (including limited partnership investment in securities of issuers that
interests), although a Fund may purchase invest in real estate and investments in
securities of issuers which engage in real mortgage-backed securities, mortgage
estate operations and securities which are participations or other instruments
secured by real estate or interests therein. supported or secured by interests in real
estate are not subject to this limitation,
and except that the Fund may exercise rights
relating to such securities, including the
right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
5. Purchase or sell commodities or commodity Buy or sell physical commodities or
futures contracts, except that the Fund may contracts involving physical commodities.
purchase and sell financial futures The Fund may purchase and sell
contracts and options thereon and that (i) derivative, hedging and similar
forward contracts are not deemed to be instruments such as financial futures
commodities or commodity futures contracts. contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
6. Purchase oil, gas or other mineral The restriction will not change, but will
leases, rights or royalty contracts or become non-fundamental.
exploration or development programs, except
that the Fund may invest in the securities
of companies which operate, invest in or
sponsor such programs.
7. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that each Fund may pledge its assets, except as permitted by
borrow from banks or through forward rolls, the 1940 Act Laws, Interpretations and
dollar rolls or reverse repurchase Exemptions. For purposes of this
agreements up to 20% of the value of its restriction, the purchase or sale of
total assets to take advantage of investment securities on a when-issued or delayed
opportunities, for temporary, extraordinary delivery basis, reverse repurchase
or emergency purposes, or for the clearance agreements, dollar rolls, short sales,
of transactions and may pledge up to 20% of derivative and hedging transactions such as
the value of its total assets to secure such interest rate swap transactions, and
borrowings. For purposes of this collateral arrangements with respect
restriction, the purchase or sale of thereto, and transactions similar to any of
securities on a "when-issued" or delayed the foregoing and collateral arrangements
delivery basis; the purchase and sale of with respect thereto, and obligations of the
options, financial futures contracts and Fund to Trustees pursuant to deferred
options thereon; the entry into repurchase compensation arrangements are not deemed to
agreements and collateral and margin be a pledge of assets or the issuance of a
arrangements with respect to any of the senior security.
H-4
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
foregoing, will not be deemed to be a pledge
of assets nor the issuance of senior
securities.
8. Make loans except by the purchase of The Fund may make loans, including loans of
fixed-income securities in which the Fund assets of the Fund, repurchase agreements,
may invest consistently with its investment trade claims, loan participations or similar
objective and policies or by use of reverse investments, or as permitted by the 1940 Act
repurchase and repurchase agreements, Laws, Interpretations and Exemptions. The
forward rolls, dollar rolls and securities acquisition of bonds, debentures, other debt
lending arrangements. securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
9. Make short sales of securities. The restriction will become non-fundamental,
and is proposed to be changed, as described
in Proposal No. 5(h).
10. Purchase securities on margin, except The restriction will not change, but will
for such short-term loans as are necessary become non-fundamental.
for the clearance of purchases of portfolio
securities. (For the purpose of this
restriction, the deposit or payment by any
Fund of initial or maintenance margin in
connection with financial futures contracts
is not considered the purchase of a security
on margin.)
11. Act as underwriter except to the extent Act as underwriter except to the extent
that, in connection with the disposition of that, in connection with the disposition of
portfolio securities, it may be deemed to be portfolio securities, it may be deemed to be
an underwriter under certain federal an underwriter under certain federal
securities laws. The Fund has no limit with securities laws.
respect to investments in restricted
securities.
PRUDENTIAL NATURAL RESOURCES FUND, INC.
The Fund may not:
1. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); provided that the deposit or
payment by the Fund of initial or
maintenance margin in connection with
futures or options is not considered the
purchase of a security on margin.
2. Make short sales of securities or The restriction will not change, but will
maintain a short position, except short become non-fundamental.
sales against-the-box.
3. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
the 1940
H-5
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
borrow up to 20% of the value of its total Act Laws, Interpretations and Exemptions.
assets (calculated when the loan is made) For purposes of this restriction, the
for temporary, extraordinary or emergency purchase or sale of securities on a
purposes or for the clearance of when-issued or delayed delivery basis,
transactions. The Fund may pledge up to 20% reverse repurchase agreements, dollar rolls,
of the value of its total assets to secure short sales, derivative and hedging
such borrowings. For purposes of this transactions such as interest rate swap
restriction, the purchase or sale of transactions, and collateral arrangements
securities on a when-issued or delayed with respect thereto, and transactions
delivery basis, forward foreign currency similar to any of the foregoing and
exchange contracts and collateral collateral arrangements with respect
arrangements relating thereto, and thereto, and obligations of the Fund to
collateral arrangements with respect to Directors pursuant to deferred compensation
futures contracts and options thereon and arrangements are not deemed to be a pledge
with respect to the writing of options and of assets or the issuance of a senior
obligations of the Fund to Directors security.
pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets or the issuance of a senior
security.
4. Purchase any security (other than The first portion of the restriction is
obligations of the U.S. Government, its proposed to be eliminated (so that the Fund
agencies or instrumentalities) if as a will be non- diversified).
result: (i) with respect to 75% of the -and -
Fund's total assets, more than 5% of the Purchase any security if as a result 25% or
Fund's total assets (determined at the time more of the Fund's total assets would be
of investment) would then be invested in invested in the securities of issuers having
securities of a single issuer, or (ii) 25% their principal business activities in the
or more of the Fund's total assets same industry, except for temporary
(determined at the time of investment) would defensive purposes, and except that this
be invested in a single industry. limitation does not apply to securities
issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
5. Purchase any security if as a result the The restriction will not change, but will
Fund would then hold more than 10% of the become non-fundamental.
outstanding voting securities of an issuer.
6. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. The Fund may estate are not subject to this limitation,
not purchase interests in real estate and except that the Fund may exercise rights
limited partnerships which are not readily relating to such securities, including the
marketable. right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
7. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts. (For purposes of this contracts involving physical commodities.
restriction, futures contracts on currencies The Fund may purchase and sell
and on stock indices and forward foreign (i) derivative, hedging and similar
currency exchange contracts are not deemed instruments such as financial futures
to be commodities or commodity contracts.) contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from
H-6
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
which is linked to, physical commodities or
currencies, such as forward currency
exchange contracts, and the Fund may
exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
8. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
9. Make investments for the purpose of The restriction will not change, but will
exercising control or management. become non-fundamental.
10. Invest in securities of other registered The restriction will become non-fundamental
investment companies, except by purchases in and, as described in Proposal No. 5(h), is
the open market involving only customary expected to be amended by the Board.
brokerage commissions and as a result of
which not more than 5% of its total assets (determined at the time of investment) invested in
securities of companies (including predecessors) less than three years old,
except that the Fund may invest in the securities of any U.S. Government agency
or instrumentality, and in any security guaranteed by such an agency or
instrumentality.]
(6)[(7)] Buy or sell real estate or interests in real estate, except that
-- the Fund may purchase and sell securities which are secured by real
estate, securities of companies which invest or deal in real estate and publicly
traded securities of real estate investment trusts. The Fund may not purchase
interests in real estate limited partnerships which are not readily marketable.
(7)[(8)] Buy or sell commodities or commodity contracts, except that the
-- Fund may purchase and sell stock index futures contracts and options
thereon. (For purposes of this restriction, forward foreign currency exchange
contracts are not deemed to be a commodity or commodity contract.)
(8)[(9)] Act as underwriter except to the extent that, in connection with
-- the disposition of portolio securities, it may be deemed to be an
underwriter under certain federal securities law.
(9)[(10)] Make investments for the purpose of exercising control or
-- management.
(10)
---[(11)] Invest in securities or other registered investment companies,
except by purchases in the open market involving only customary brokerage
commissions and as a result of which not more than 10% [5%]of its total assets
--
(determined at the time of investment) would
be invested in such securities, or except as
part of a merger, consolidation or other
acquisition.
11. Invest in interests in oil, gas or other The restriction will not change, but will
mineral exploration or development programs, become non-fundamental.
except that the Fund may invest in the
securities of companies which invest in or
sponsor such programs.
12. Make loans, except through The Fund may make loans, including loans of
(i) repurchase agreements and (ii) loans of assets of the Fund, repurchase agreements,
portfolio securities (limited to 30% of the trade claims, loan participations or similar
Fund's total assets). investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
H-7
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
13. Purchase any security if as a result the The restriction will not change, but will
Fund would then have more than 5% of its become non-fundamental.
total assets (determined at the time of the
investment) invested in securities of
companies (including predecessors) less than
three years old, except that the Fund may
invest in the securities of any U.S.
Government agency or instrumentality, and in
any security guaranteed by such agency or
instrumentality and except that the Fund may
invest in securities rated in the top three
grades by a nationally recognized rating
agency.
PRUDENTIAL SECTOR FUNDS, INC.
- -PRUDENTIAL FINANCIAL SERVICES FUND
- -PRUDENTIAL HEALTH SCIENCES FUND
- -PRUDENTIAL TECHNOLOGY FUND
A Fund may not:
1. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks up to 33 1/3% of the value the Investment Company Act of 1940, and the
of its total assets (calculated when the rules and regulations promulgated
loan is made) for temporary, extraordinary thereunder, as each may be amended from time
or emergency purposes or for the clearance to time except to the extent the Fund may be
of transactions. Each of these Funds may permitted to do so by exemptive order, SEC
pledge up to 33 1/3% of the value of its release, no-action letter or similar relief
total assets to secure such borrowings. For or interpretations (collectively, the "1940
purposes of this restriction, the purchase Act Laws, Interpretations and Exemptions").
or sale of securities on a when-issued or For purposes of this restriction, the
delayed delivery basis, forward foreign purchase or sale of securities on a when-
currency exchange contracts and collateral issued or delayed delivery basis, reverse
arrangements relating thereto, and repurchase agreements, dollar rolls, short
collateral arrangements with respect to sales, derivative and hedging transactions
futures contracts and options thereon and such as interest rate swap transactions, and
with respect to the writing of options and collateral arrangements with respect
obligations of a Fund to Directors pursuant thereto, and transactions similar to any of
to deferred compensation arrangements are the foregoing and collateral arrangements
not deemed to be a pledge of assets subject with respect thereto, and obligations of the
to this restriction. Fund to Directors pursuant to deferred
compensation arrangements are not deemed to
be a pledge of assets or the issuance of a
senior security.
2. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that a Fund may purchase investment in securities of issuers that
and sell securities which are secured by invest in real estate and investments in
real estate, securities of companies which mortgage-backed securities, mortgage
invest or deal in real estate and publicly participations or other instruments
traded securities of real estate investment supported or secured by interests in real
trusts. estate are not subject to this limitation,
and except that the Fund may exercise rights
relating to such
H-8
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
securities, including the right to enforce
security interests and to hold real estate
acquired by reason of such enforcement until
that real estate can be liquidated in an
orderly manner.
3. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that a Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon, and forward foreign (i) derivative, hedging and similar
currency exchange contracts. instruments such as financial futures
contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
4. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
5. Make loans, except through The Fund may make loans, including loans of
(a) repurchase agreements and (b) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 33 1/3% of trade claims, loan participations or similar
the Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
H-9
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
6. Purchase any security (other than This restriction will not change and will
obligations of the U.S. Government, its remain fundamental.
agencies or instrumentalities) if, as a
result, 25% or more of the Fund's total
assets (determined at the time of the
investment) would be invested in any one
industry other than as follows: Prudential
Financial Services Fund will concentrate its
investments (i.e., will invest at least 25%
of its total assets under normal
circumstances) in securities of companies in
the financial services group of industries.
Prudential Health Sciences Fund will
concentrate its investments (i.e., will
invest at least 25% of its total assets
under normal circumstances) in securities of
companies in the health sciences group of
industries. Prudential Technology Fund will
concentrate its investments (i.e., will
invest at least 25% of its total assets
under normal circumstances) in securities of
companies in the technology group of
industries.
PRUDENTIAL SECTOR FUNDS, INC.
- -PRUDENTIAL UTILITY FUND
The Fund may not:
1. Purchase any security (other than The first portion of the restriction is
obligations of the U.S. Government, its proposed to be eliminated (so that the Fund
agencies, or instrumentalities) if as a will be non- diversified). The second
result with respect to 75% of the Fund's portion, which is the Fund's concentration
total assets, more than 5% of the Fund's policy, is proposed to be re-cast to read:
total assets (taken at current value) would Prudential Utility Fund will concentrate its
then be invested in securities of a single investments (i.e., will invest at least 25%
issuer; the Fund will concentrate its of its total assets under normal
investments in utility stocks as described circumstances) in securities of companies in
under "Description of the Funds, Their the utility group of industries.
Investments and Risks."
2. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); the deposit or payment by the
Fund of initial or maintenance margin in
connection with options, futures contracts,
options on futures contracts, forward
foreign currency exchange contracts or
options on currencies is not considered the
purchase of a security on margin.
H-10
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
3. Make short sales of securities or The restriction will not change, but will
maintain a short position, unless at all become non-fundamental.
times when a short position is open it owns
an equal amount of such securities or
securities convertible into or exchangeable,
without payment of any further
consideration, for securities of the same
issue as, and equal in amount to, the
securities sold short, and unless not more
than 25% of the Fund's net assets (taken at
current value) is held as collateral for
such sales at any one time.
4. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow up to 20% of the value of its total the 1940 Act Laws, Interpretations and
assets (calculated when the loan is made) Exemptions. For purposes of this
for temporary, extraordinary or emergency restriction, the purchase or sale of
purposes or for the clearance of securities on a when-issued or delayed
transactions. The Fund may pledge up to 20% delivery basis, reverse repurchase
of the value of its total assets to secure agreements, dollar rolls, short sales,
such borrowings. For purposes of this derivative and hedging transactions such as
restriction, obligations of the Fund to interest rate swap transactions, and
Directors pursuant to deferred compensation collateral arrangements with respect
arrangements, the purchase and sale of thereto, and transactions similar to any of
securities on a when-issued or delayed the foregoing and collateral arrangements
delivery basis, the purchase and sale of with respect thereto, and obligations of the
options, futures contracts, options on Fund to Directors pursuant to deferred
futures contracts, forward foreign currency compensation arrangements are not deemed to
exchange contracts and options on currencies be a pledge of assets or the issuance of a
and collateral arrangements with respect to senior security.
the purchase and sale of options, futures
contracts, options on futures contracts,
forward foreign currency exchange contracts
and options on currencies are not deemed to
be the issuance of a senior security or the
pledge of assets.
5. Purchase any security if as a result the The restriction will be eliminated if
Fund would then hold more than 10% of the Proposal No. 5(a) is approved.
outstanding voting securities of an issuer.
6. Purchase any security if as a result the The restriction will not change, but will
Fund would then have more than 5% of its become non-fundamental.
total assets (taken at current value)
invested in securities of companies
(including predecessors) less than three
years old.
H-11
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
7. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, or real estate or interests in contracts involving physical commodities.
real estate, except that the Fund may The Fund may purchase and sell
purchase and sell options, futures (i) derivative, hedging and similar
contracts, options on futures contracts, instruments such as financial futures
forward foreign currency exchange contracts contracts and options thereon, and
and options on currencies and securities (ii) securities or instruments backed by,
which are secured by real estate and or the return from which is linked to,
securities of companies which invest or deal physical commodities or currencies, such as
in real estate. forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
8. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
9. Make investments for the purpose of The restriction will not change, but will
exercising control or management. become non-fundamental.
10. Invest in securities of other investment The restriction will become non-fundamental
companies, except by purchases in the open and, as described in Proposal No. 5(h), is
market involving only customary brokerage expected to be amended by the Board.
commissions and as a result of which not
more than 5% of its total assets (taken at
current value) would be invested in such
securities, or except as part of a merger,
consolidation or other acquisition.
11. Invest in interests in oil, gas or other The restriction will not change, but will
mineral exploration or development programs, become non-fundamental.
although it may invest in the common stocks
of companies which invest in or sponsor such
programs.
H-12
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
12. Make loans, except through (i) the The Fund may make loans, including loans of
purchase of bonds, debentures, commercial assets of the Fund, repurchase agreements,
paper, corporate notes and similar evidences trade claims, loan participations or similar
of indebtedness of a type commonly sold investments, or as permitted by the 1940 Act
privately to financial institutions, Laws, Interpretations and Exemptions. The
(ii) the lending of its portfolio acquisition of bonds, debentures, other debt
securities, as described under "Description securities or instruments, or participations
of the Funds, Their Investments and or other interests therein and investments
Risks--Lending of Securities" and in government obligations, commercial paper,
(iii) repurchase agreements. (The purchase certificates of deposit, bankers'
of a portion of an issue of securities acceptances or instruments similar to any of
described under (i) above distributed the foregoing will not be considered the
publicly, whether or not the purchase is making of a loan, and is permitted if
made on the original issuance, is not consistent with the Fund's investment
considered the making of a loan.) objective.
PRUDENTIAL SMALL COMPANY FUND, INC.
The Fund may not:
(1) With respect to 75% of the Fund's total Purchase the securities of any issuer if, as
assets, invest more than 5% of the value of a result, the Fund would fail to be a
its total assets in the securities of any diversified company within the meaning of
one issuer (other than obligations issued or the Investment Company Act of 1940, and the
guaranteed by the United States Government, rules and regulations promulgated
its agencies or instrumentalities). It is thereunder, as each may be amended from time
the current policy (but not a fundamental to time, except to the extent that the Fund
policy) of the Fund not to invest more than may be permitted to do so by exemptive
5% of the value of its total assets in order, SEC release, no-action letter or
securities of any one issuer. similar relief or interpretations
(collectively, the "1940 Act Laws,
Interpretations and Exemptions").
(2) Purchase more than 10% of the The restriction will not change, but will
outstanding voting securities of any one become non-fundamental, to the extent not
issuer. included within restriction no. 1.
(3) Invest more than 25% of the value of its Purchase any security if as a result 25% or
total assets in securities of issuers in any more of the Fund's total assets would be
one industry. This restriction does not invested in the securities of issuers having
apply to obligations issued or guaranteed by their principal business activities in the
the United States Government or its agencies same industry, except for temporary
or instrumentalities. defensive purposes, and except that this
limitation does not apply to securities
issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
H-13
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
(4) Purchase or sell real estate or Buy or sell real estate, except that
interests therein, although the Fund may investment in securities of issuers that
purchase securities of issuers which engage invest in real estate and investments in
in real estate operations and securities mortgage-backed securities, mortgage
which are secured by real estate or participations or other instruments
interests therein. supported or secured by interests in real
estate are not subject to this limitation,
and except that the Fund may exercise rights
relating to such securities, including the
right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
(5) Purchase or sell commodities or Buy or sell physical commodities or
commodity futures contracts, except that contracts involving physical commodities.
transactions in foreign currency financial The Fund may purchase and sell
futures contracts and forward contracts and (i) derivative, hedging and similar
related options are not considered to be instruments such as financial futures
transactions in commodities or commodity contracts and options thereon, and
contracts. (ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
(6) Purchase oil, gas or other mineral The restriction will not change, but will
leases, rights or royalty contracts or become non-fundamental.
exploration or development programs, except
that the Fund may invest in the securities
of companies which operate, invest in or
sponsor such programs.
(7) Purchase securities of other investment The restriction will become non-fundamental
companies, except by purchases in the open and, as described in Proposal No. 5(h), is
market involving only customary brokerage expected to be amended by the Board.
commissions and as a result of which not
more than 10% of its total assets
(determined at the time of investment) would
be invested in such securities or except in
connection with a merger, consolidation,
reorganization or acquisition of assets.
H-14
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
(8) Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow up to 20% of the value of the total the 1940 Act Laws, Interpretations and
assets (calculated when the loan is made) Exemptions. For purposes of this
for temporary, extraordinary or emergency restriction, the purchase or sale of
purposes or for the clearance of securities on a when-issued or delayed
transactions. The Fund may pledge up to 20% delivery basis, reverse repurchase
of the value of its total assets to secure agreements, dollar rolls, short sales,
such borrowings. Secured borrowings may take derivative and hedging transactions such as
the form of reverse repurchase agreements, interest rate swap transactions, and
pursuant to which the Fund would sell collateral arrangements with respect
portfolio securities for cash and thereto, and transactions similar to any of
simultaneously agree to repurchase them at a the foregoing and collateral arrangements
specified date for the same amount of cash with respect thereto, and obligations of the
plus an interest component. For purposes of Fund to Directors pursuant to deferred
this restriction, obligations of the Fund to compensation arrangements are not deemed to
Directors pursuant to deferred compensation be a pledge of assets or the issuance of a
arrangements, the purchase and sale of senior security.
securities on a when-issued or delayed
delivery basis, the purchase and sale of
forward foreign currency exchange contracts
and financial futures contracts and related
options and collateral arrangements with
respect to margins for financial futures
contracts and with respect to options are
not deemed to be the issuance of a senior
security or a pledge of assets.
(9) Make loans of money or securities, The Fund may make loans, including loans of
except by the purchase of debt obligations assets of the Fund, repurchase agreements,
in which the Fund may invest consistently trade claims, loan participations or similar
with its investment objective and policies investments, or as permitted by the 1940 Act
or by investment in repurchase agreements. Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
(10) Make short sales of securities except The restriction will not change, but will
short sales against-the-box. become non-fundamental.
H-15
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
(11) Purchase securities on margin, except The restriction will not change, but will
for such short-term loans as are necessary become non-fundamental.
for the clearance of purchases of portfolio
securities. (For the purpose of this
restriction, the deposit or payment by the
Fund of initial or maintenance margin in
connection with financial futures contracts
is not considered the purchase of a security
on margin.)
(12) Engage in the underwriting of Act as underwriter except to the extent
securities, except insofar as the Fund may that, in connection with the disposition of
be deemed an underwriter under the portfolio securities, it may be deemed to be
Securities Act, in disposing of a portfolio an underwriter under certain federal
security. securities laws.
(13) Invest for the purpose of exercising The restriction will not change, but will
control or management of any other issuer. become non-fundamental.
PRUDENTIAL TAX-MANAGED FUNDS
- -PRUDENTIAL TAX-MANAGED EQUITY FUND
The Fund may not:
1. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks up to 33 1/3% of the value the 1940 Act Laws, Interpretations and
of its total assets (calculated when the Exemptions. For purposes of this
loan is made) for temporary, extraordinary restriction, the purchase or sale of
or emergency purposes or for the clearance securities on a when-issued or delayed
of transactions. The Fund may pledge up to delivery basis, reverse repurchase
33 1/3% of the value of its total assets to agreements, dollar rolls, short sales,
secure such borrowings. For purposes of this derivative and hedging transactions such as
restriction, the purchase or sale of interest rate swap transactions, and
securities on a when-issued or delayed collateral arrangements with respect
delivery basis, forward foreign currency thereto, and transactions similar to any of
exchange contracts and collateral the foregoing and collateral arrangements
arrangements relating thereto, and with respect thereto, and obligations of the
collateral arrangements with respect to Fund to Trustees pursuant to deferred
futures contracts and options thereon and compensation arrangements are not deemed to
with respect to the writing of options and be a pledge of assets or the issuance of a
obligations of the Fund to Trustees pursuant senior security.
to deferred compensation arrangements are
not deemed to be a pledge of assets subject
to this restriction.
H-16
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
2. Purchase any security (other than Purchase the securities of any issuer if, as
obligations of the U.S. Government, its a result, the Fund would fail to be a
agencies or instrumentalities) if as a diversified company within the meaning of
result, with respect to 75% of the Fund's the Investment Company Act of 1940, and the
total assets, more than 5% of the Fund's rules and regulations promulgated
total assets (determined at the time of thereunder, as each may be amended from time
investment) would then be invested in to time, except to the extent that the Fund
securities of a single issuer. may be permitted to do so by exemptive
order, SEC release, no-action letter or
similar relief or interpretations
(collectively, the "1940 Act Laws,
Interpretations and Exemptions").
3. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. estate are not subject to this limitation,
and except that the Fund may exercise rights
relating to such securities, including the
right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
4. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that the Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon, and foreign currency (i) derivative, hedging and similar
forward contracts. instruments such as financial futures
contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
5. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
H-17
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
6. Make loans, except through The Fund may make loans, including loans of
(i) repurchase agreements and (ii) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 33 1/3% of trade claims, loan participations or similar
the Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
7. Purchase any security (other than Purchase any security if as a result 25% or
obligations of the U.S. Government, its more of the Fund's total assets would be
agencies or instrumentalities) if as a invested in the securities of issuers having
result 25% or more of the Fund's total their principal business activities in the
assets (determined at the time of same industry, except for temporary
investment) would be invested in a single defensive purposes, and except that this
industry. limitation does not apply to securities
issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
The Fund may not:
1. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); provided that the deposit or
payment by the Fund of initial or
maintenance margin in connection with
futures or options is not considered the
purchase of a security on margin.
2. Make short sales of securities or The restriction will become non-fundamental,
maintain a short position if, when added and is proposed to be changed, as described
together, more than 25% of the value of the in Proposal No. 5(h).
Fund's net assets would be (i) deposited as
collateral for the obligation to replace
securities borrowed to effect short sales
and (ii) allocated to segregated accounts in
connection with short sales. Short sales
"against-the-box" are not subject to this
limitation.
H-18
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
3. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks up to 20% of the value of the 1940 Act Laws, Interpretations and
its total assets (calculated when the loan Exemptions. For purposes of this
is made) for temporary, extraordinary or restriction, the purchase or sale of
emergency purposes or for the clearance of securities on a when-issued or delayed
transactions. The Fund may pledge up to 20% delivery basis, reverse repurchase
of the value of its total assets to secure agreements, dollar rolls, short sales,
such borrowings. For purposes of this derivative and hedging transactions such as
restriction, the purchase or sale of interest rate swap transactions, and
securities on a when-issued or delayed collateral arrangements with respect
delivery basis, foreign currency forward thereto, and transactions similar to any of
contracts and collateral arrangements the foregoing and collateral arrangements
relating thereto, and collateral with respect thereto, and obligations of the
arrangements with respect to futures Fund to Directors pursuant to deferred
contracts and options thereon and with compensation arrangements are not deemed to
respect to the writing of options and be a pledge of assets or the issuance of a
obligations of the Fund to Directors senior security.
pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets subject to this restriction.
4. Purchase any security (other than Purchase the securities of any issuer if, as
obligations of the U.S. government, its a result, the Fund would fail to be a
agencies or instrumentalities) if as a diversified company within the meaning of
result: (i) with respect to 75% of the the Investment Company Act of 1940, and the
Fund's total assets, more than 5% of the rules and regulations promulgated
Fund's total assets (determined at the time thereunder, as each may be amended from time
of investment) would then be invested in to time, except to the extent that the Fund
securities of a single issuer, or (ii) 25% may be permitted to do so by exemptive
or more of the Fund's total assets order, SEC release, no-action letter or
(determined at the time of the investment) similar relief or interpretations
would be invested in a single industry. (collectively, the "1940 Act Laws,
Interpretations and Exemptions").
-and -
Purchase any security if as a result 25% or
more of the Fund's total assets would be
invested in the securities of issuers having
their principal business activities in the
same industry, except for temporary
defensive purposes, and except that this
limitation does not apply to securities
issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
5. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. The Fund may estate are not subject to this limitation,
not purchase interests in real estate and except that the Fund may exercise rights
limited partnerships which are not readily relating to such securities, including the
marketable. right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
H-19
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
6. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that the Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon, and foreign currency (i) derivative, hedging and similar
forward contracts. instruments such as financial futures
contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
7. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
8. Make investments for the purpose of The restriction will not change, but will
exercising control or management. become non-fundamental.
9. Invest in securities of other The restriction will become non-fundamental
non-affiliated investment companies, except and, as described in Proposal No. 5(h), is
by purchases in the open market involving expected to be amended by the Board.
only customary brokerage commissions and as
a result of which the Fund will not hold
more than 3% of the outstanding voting
securities of any one investment company,
will not have invested more than 5% of its
total assets in any one investment company
and will not have invested more than 10% of
its total assets (determined at the time of
investment) in such securities of one or
more investment companies, or except as part
of a merger, consolidation or other
acquisition.
(11)
---[(12)] Invest in interests in oil, gas or other mineral exploration or
development programs, except that the Fund may invest in the securities
of companies which invest in or sponsor such programs.
E-3
H-20
(12)
---[(13)] Make loans, except through repurchase agreements and loans of
portfolio securities (limited to 33% of the Fund's total assets).
(13)
---[(14)] Purchase warrants if as a result the Fund would then have more
than 5% of its total assets (taken at current value) invested in warrants
or more than 2% of its total assets (taken at current value) invested in
warrants not listed on the New York or American Stock Exchanges.
E-4
PRUDENTIAL INTERMEDIATE GLOBAL INCOME
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
10. Make loans, except through The Fund may make loans, including loans of
(i) repurchase agreements and (ii) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 33 1/3% of trade claims, loan participations or similar
the Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
11. Purchase more than 10% of all The restriction will not change, but will
outstanding voting securities of any one become non-fundamental, to the extent not
issuer. included within restriction no. 4.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
INVESTMENT RESTRICTIONS
The Fund may not:
1. Invest 25% or more of its total assets in any one industry. For this
purpose "industry" does not include the U.S. Government and agencies and
instrumentalities of the U.S. Government.
[2. Invest more than 5% of its total assets in securities of companies
having a record, together with predecessors, of less than three years of
continuous operation. This restriction shall not apply to obligations of the
U.S. Government and obligations issued by agencies of the U.S. Government or
instrumentalities established or sponsored by the U.S. Government.]
2. [3.] Purchase securities on margin, except such short-term credits as may
--
be necessary for the clearance of transactions and except that the Fund may make
deposits on margin in connection with futures contracts and options.
3. [4.] Purchase securities of other investment companies, except in
--
accordance with applicable limits under the Investment Company Act.
4. [5.] Make short sales of securities or maintain a short position, with
--
the exception of "short sales against the box," provided that not more than 10%
of the Fund's net assets (taken at market value) is held as collateral for such
sales at any one time.
5. [6.] Issue senior securities, borrow money or pledge its assets, except
--
that the Fund may borrow up to 20% of the value of its total assets (calculated
when the loan is made) for temporary or extraordinary or emergency purposes or
for the clearance of transactions. The Fund may pledge up to 20% of the value of
its total assets to secure such borrowings. For purposes of this restriction,
the purchase or sale of securities on a when-issued or delayed delivery basis,
collateral arrangements with respect to interest rate swaps, reverse repurchase
agreements or dollar roll transactions, options, futures contracts and options
on futures contracts and collateral arrangements with respect to initial and
variation margins are not deemed to be a pledge of assets or the issuance of a
senior security; and neither such arrangements, the purchase or sale of interest
rate futures contacts or other financial futures contracts or the purchase or
sale of related options nor obligations of the Fund to the Directors pursuant to
deferred compensation arrangements are deemed to be the issuance of a senior
security.
6. [7.] Buy or sell commodities, commodity contracts, real estate or
--
interests in real estate (including mineral leases or rights), except that the
Fund may purchase and sell futures contracts, options on futures contracts and
securities secured by real estate or interests therein or issued by companies
that invest therein. Transactions in foreign currencies and forward contracts
and options in foreign currencies are not considered by the Fund to be
transactions in commodities or commodity contracts.
7. [8.] Make loans (except that purchases of debt securities in accordance
--
with the Fund's investment objective and policies and loans of portfolio
securities and repurchase agreements are not considered by the Fund to be
"loans").
8. [9.] Make investments for the purpose of exercising control or management
--
over the issuers of any security.
9. [10.] Act as an underwriter (except to the extent the Fund may be deemed
--
to be an underwriter in connection with the sale of securities in the Fund's
investment portfolio).
E-5
PRUDENTIAL JENNISON FUND, INC.
INVESTMENT RESTRICTIONS
The Fund may not:
1. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); provided that the deposit or
payment by the Fund of initial or
maintenance margin in connection with
futures or options is not considered the
purchase of a security on margin.
2. Make short sales of securities or The restriction will not change, but will
maintain a short position if, when added become non-fundamental.
together, more than 25% of the value of the
Fund's net assets would be (i) deposited as
collateral for the obligation to replace
securities borrowed to effect short sales
and (ii) allocated to segregated accounts in
connection with short sales. Short sales
"against-the-box" are not subject to this
limitation.
H-21
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
3. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks up to 20% of the value of the 1940 Act Laws, Interpretations and
its total assets (calculated when the loan Exemptions. For purposes of this
is made) for temporary, extraordinary or restriction, the purchase or sale of
emergency purposes or for the clearance of transactions. The Fund may pledge up to 20% of
the value of its total assets to secure such borrowings. For purposes of this
restriction, the purchase or sale of securities on a when-issued or delayed
transactions. The Fund may pledge up to 20% delivery basis, reverse repurchase
of the value of its total assets to secure agreements, dollar rolls, short sales,
such borrowings. For purposes of this derivative and hedging transactions such as
restriction, the purchase or sale of interest rate swap transactions, and
securities on a when-issued or delayed collateral arrangements with respect
delivery basis, forward foreign currency thereto, and transactions similar to any of
exchange contracts and collateral the foregoing and collateral arrangements
arrangements relating thereto, and with respect thereto, and obligations of the
collateral arrangements with respect to Fund to Directors pursuant to deferred
futures contracts and options thereon and compensation arrangements are not deemed to
with respect to the writing of options and obligations of the Fund to Directors pursuant to deferred compensation
arrangements are not deemed to be a pledge of assets or the issuance of a
obligations of the Fund to Directors senior security.
pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets subject to this restriction.
4. Purchase any security (other than obligations of the U.S. Government, its
agencies or instrumentalities) if as a result: (i) with respect to 75% of the
Fund's total assets, more than 5% of the Fund's total assets (determined at the
time of investment) would then be invested in securities of a single issuer, or
(ii) 25% or more of the Fund's total assets (determined at the time of the
investment) would be invested in a single industry.
[5. Purchase any security if as a result the Fund would then have more than
5% of its total assets (determined at the time of investment) invested in
securities of companies (including predecessors) less than three years old,
except that the Fund may invest in the securities of any U.S. Government agency
or instrumentality, and in any security (other than Purchase the securities of any issuer if, as
obligations of the U.S. Government, its a result, the Fund would fail to be a
agencies or instrumentalities) if as a diversified company within the meaning of
result: (i) with respect to 75% of the the 1940 Act, and the rules and regulations
Fund's total assets, more than 5% of the promulgated thereunder, as each may be
Fund's total assets (determined at the time amended from time to time, except to the
of investment) would then be invested in extent that the Fund may be permitted to do
securities of a single issuer, or (ii) 25% so by exemptive order, SEC release,
or more of the Fund's total assets no-action letter or similar relief or
(determined at the time of the investment) interpretations (collectively, the "1940 Act
would be invested in a single industry. Laws, Interpretations and Exemptions").
-and -
Purchase any security if as a result 25% or
more of the Fund's total assets would be
invested in the securities of issuers having
their principal business activities in the
same industry, except for temporary
defensive purposes, and except that this
limitation does not apply to securities
issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
5. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. The Fund may estate are not subject to this limitation,
not purchase interests in real estate and except that the Fund may exercise rights
limited partnerships which are not readily relating to such securities, including the
marketable. right to enforce security interests and to
hold real estate acquired by
such an agency or
instrumentality.]
5. [6.] BUY OR SELL REAL ESTATE OR INTERESTS IN REAL ESTATE, EXCEPT THAT THE
-- FUND MAY PURCHASE AND SELL SECURITIES WHICH ARE SECURED BY REAL ESTATE,
SECURITIES OF COMPANIES WHICH INVEST OR DEAL IN REAL ESTATE AND PUBLICLY TRADED
SECURITIES OF REAL ESTATE INVESTMENT TRUSTS. THE FUND MAY NOT PURCHASE INTERESTS
IN REAL ESTATE LIMITED PARTNERSHIPS WHICH ARE NOT READILY MARKETABLE.
6. [7.] BUY OR SELL COMMODITIES OR COMMODITY CONTRACTS, EXCEPT THAT THE FUND
-- MAY PURCHASE AND SELL FINANCIAL FUTURES CONTRACTS AND OPTIONS THEREON.
(FOR PURPOSES OF THIS RESTRICTION, FUTURES CONTRACTS ON CURRENCIES AND ON
SECURITIES INDICES AND FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS ARE NOT
DEEMED TO BE COMMODITIES OR COMMODITY CONTRACTS.)
7. [8.] ACT AS UNDERWRITER EXCEPT TO THE EXTENT THAT, IN CONNECTION WITH THE
-- DISPOSITION OF PORTFOLIO SECURITIES, IT MAY BE DEEMED TO BE AN
UNDERWRITER UNDER CERTAIN FEDERAL SECURITIES LAWS. THE FUND HAS NOT ADOPTED A
FUNDAMENTAL INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN RESTRICTED
SECURITIES. SEE "ILLIQUID SECURITIES."
8. [9.] MAKE INVESTMENTS FOR THE PURPOSE OF EXERCISING CONTROL OR
-- MANAGEMENT.
9. [10.] INVEST IN SECURITIES OF OTHER INVESTMENT COMPANIES, EXCEPT BY
-- PURCHASES IN THE OPEN MARKET INVOLVING ONLY CUSTOMARY BROKERAGE
COMMISSIONS AND AS A RESULT OF WHICH THE FUND WILL NOT HOLD MORE THAN 3% OF THE
OUTSTANDING VOTING SECURITIES OF ANY ONE INVESTMENT COMPANY, WILL NOT HAVE
INVESTED MORE THAN 5% OF ITS TOTAL ASSETS IN ANY ONE INVESTMENT COMPANY AND WILL
NOT HAVE INVESTED MORE THAN 10% OF ITS TOTAL ASSETS (DETERMINED AT THE TIME OF
INVESTMENT) IN SUCH SECURITIES OF ONE OR MORE INVESTMENT COMPANIES, OR EXCEPT AS
PART OF A MERGER, CONSOLIDATION OR OTHER ACQUISITION.
E-6
H-22
10.[11.] Invest in interests in oil, gas or other mineral exploration or
-- development programs, except that the Fund may invest in the securities
of companies which invest in or sponsor such programs.
11.[12.] Make loans, except through (i) repurchase agreements and (ii) loans
-- of portfolio securities limited to 30% of the Fund's total assets.
12.[13.] Purchase more than 10% of all outstanding voting securities of any
-- one issuer.
E-7
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
reason of such enforcement until that real
estate can be liquidated in an orderly
manner.
6. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that the Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon, and forward foreign (i) derivative, hedging and similar
currency exchange contracts. instruments such as financial futures
contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
7. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
8. Make investments for the purpose of The restriction will not change, but will
exercising control or management. become non-fundamental.
9. Invest in securities of other The restriction will become non-fundamental
non-affiliated investment companies, except and, as described in Proposal No. 5(h), is
by purchases in the open market involving expected to be amended by the Board.
only customary brokerage commissions and as
a result of which the Fund will not hold
more than 3% of the outstanding voting
securities of any one investment company,
will not have invested more than 5% of its
total assets in any one investment company
and will not have invested more than 10% of
its total assets (determined at the time of
investment) in such securities of one or
more investment companies, or except as part
of a merger, consolidation or other
acquisition.
H-23
PRUDENTIAL MULTI-SECTOR FUND, INC.
INVESTMENT
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
10. Make loans, except through The Fund may make loans, including loans of
(i) repurchase agreements and (ii) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 33 1/3% of trade claims, loan participations or similar
the Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
11. Purchase more than 10% of all The restriction will not change, but will
outstanding voting securities of any one become non-fundamental, to the extent not
issuer. included within restriction no. 4.
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
- -EQUITY OPPORTUNITY FUND
- -GROWTH FUND
Each Fund may not:
1. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); provided that the deposit or
payment by the Fund of initial or
maintenance margin in connection with
futures or options is not considered the
purchase of a security on margin.
2. Make short sales of securities or The restriction will not change, but will
maintain a short position if, when added become non-fundamental.
together, more than 25% of the value of the
Fund's net assets would be (i) deposited as
collateral for the obligation to replace
securities borrowed to effect short sales
and (ii) allocated to segregated accounts in
connection with short sales. Short sales
"against-the-box" are not subject to this
limitation.
H-24
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
3. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks up to 20% of the value of the 1940 Act Laws, Interpretations and
its total assets (calculated when the loan Exemptions. For purposes of this
is made) for temporary, extraordinary or restriction, the purchase or sale of
emergency purposes or for the clearance of securities on a when-issued or delayed
transactions. The Fund may pledge up to 20% delivery basis, reverse repurchase
of the value of its total assets to secure agreements, dollar rolls, short sales,
such borrowings. For purposes of this derivative and hedging transactions such as
restriction, the purchase or sale of interest rate swap transactions, and
securities on a when-issued or delayed collateral arrangements with respect
delivery basis, forward foreign currency thereto, and transactions similar to any of
exchange contracts and collateral the foregoing and collateral arrangements
arrangements relating thereto, and with respect thereto, and obligations of the
collateral arrangements with respect to Fund to Directors pursuant to deferred
futures contracts and options thereon and compensation arrangements are not deemed to
with respect to the writing of options and be a pledge of assets or the issuance of a
obligations of the Fund to Directors senior security.
pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets or the issuance of a senior
security.
4. Purchase any security (other than Purchase the securities of any issuer if, as
obligations of the U.S. Government, its a result, the Fund would fail to be a
agencies or instrumentalities) if as a diversified company within the meaning of
result: (i) with respect to 75% of the the 1940 Act, and the rules and regulations
Fund's total assets, more than 5% of the promulgated thereunder, as each may be
Fund's total assets (determined at the time amended from time to time, except to the
of investment) would then be invested in extent that the Fund may be permitted to do
securities of a single issuer, or (ii) 25% so by exemptive order, SEC release,
or more of the Fund's total assets no-action letter or similar relief or
(determined at the time of the investment) interpretations (collectively, the "1940 Act
would be invested in a single industry. Laws, Interpretations and Exemptions").
-and -
Purchase any security if as a result 25% or
more of the Fund's total assets would be
invested in the securities of issuers having
their principal business activities in the
same industry, except for temporary
defensive purposes, and except that this
limitation does not apply to securities
issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
H-25
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
5. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. The Fund may estate are not subject to this limitation,
not purchase interests in real estate and except that the Fund may exercise rights
limited partnerships which are not readily relating to such securities, including the
marketable. right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
6. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that the Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon. (For purposes of this (i) derivative, hedging and similar
restriction, futures contracts on currencies instruments such as financial futures
and on securities indices and, with respect contracts and options thereon, and
to Equity Opportunity Fund, futures (ii) securities or instruments backed by,
contracts on debt securities, and forward or the return from which is linked to,
foreign currency exchange contracts are not physical commodities or currencies, such as
deemed to be commodities or commodity forward currency exchange contracts, and the
contracts.) Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
7. Act as underwriter except to the extent Act as underwriter except to the extent
that, in connection with the disposition of that, in connection with the disposition of
portfolio securities, it may be deemed to be portfolio securities, it may be deemed to be
an underwriter under certain federal an underwriter under certain federal
securities laws. Neither Fund has adopted a securities laws.
fundamental investment policy with respect
to investments in restricted securities. See
"Investment Objectives and
Policies--Illiquid Securities."
8. Make investments for the purpose of The restriction will not change, but will
exercising control or management. become non-fundamental.
H-26
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
9. Invest in securities of other investment The restriction will become non-fundamental
companies, except by purchases in the open and, as described in Proposal No. 5(h), is
market involving only customary brokerage proposed to be amended by the Board.
commissions and as a result of which the
Fund will not hold more than 3% of the
outstanding voting securities of any one
investment company, will not have invested
more than 5% of its total assets in any one
investment company and will not have
invested more than 10% of its total assets
(determined at the time of investment) in
such securities of one or more investment
companies, or except as part of a merger,
consolidation or other acquisition.
10. Invest in interests in oil, gas or other The restriction will not change, but will
mineral exploration or development programs, become non-fundamental.
except that the Fund may invest in the
securities of companies which invest in or
sponsor such programs.
11. Make loans, except through The Fund may make loans, including loans of
(i) repurchase agreements and (ii) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 30% of the trade claims, loan participations or similar
Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
12. Purchase more than 10% of all The restriction will not change, but will
outstanding voting securities of any one become non-fundamental, to the extent not
issuer. included within restriction no. 4.
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
- -ACTIVE BALANCED FUND
The Fund may not:
1. Purchase securities on margin (but the The restriction will not change, but will
Fund may obtain such short-term credits as become non-fundamental.
may be necessary for the clearance of
transactions); provided that the deposit or
payment by the Fund of initial or
maintenance margin in connection with
futures or options is not considered the
purchase of a security on margin.
2. Make short sales of securities (other than short sales against-the-box)
or maintain a short position if, when added together, more than 25% of the value
of the Fund's net assets would be (i) deposited as collateral for the obligation
to replace securities borrowed to effect short sales and (ii) allocated to
segregated accounts in connection with short sales.
3. Issue senior securities, borrow money or pledge its assets, except that
the Fund may borrow up to 20% of the value of its total assets (calculated when
the loan is made) from banks and from entities other than banks if so permitted
pursuant to an order of the SEC for temporary, extraordinary or emergency
purposes or for the clearance of transactions and to take advantage of
investment opportunities. The Fund may pledge up to 20% of the value of its
total assets to secure such borrowings. For purposes of this restriction, the
purchase or sale of securities on a when-issued or delayed delivery basis,
forward foreign currency exchange contracts and collateral and collateral
arrangements relating thereto, and collateral arrangements with respect to
futures contracts and options thereon and with respect to the writing of options
and obligations of the Fund to Directors pursuant to deferred compensation
arrangements are not deemed to be a pledge of assets or the issuance of a senior
security.
4. Purchase any security (other than obligations of the U.S. Government, its
agencies or instrumentalities) if as a result 25% or more of the value of the
Fund's total assets (determined at the time of the investment) would be invested
in the securities of one or more issuers conducting their principal business
activities in the same industry or group of industries.
5. Purchase any security if as a result the Fund would then hold more than
10% of the outstanding voting securities of an issuer.
6. Purchase any security if as a result the Fund would then have more than
5% of its total assets (determined at the time of investment) invested in
securities of companies (including predecessors) less than three years old,
provided that there is no limit on the Fund's ability to invest in the
securities of any U.S. Government agency or instrumentality, and in any security
guaranteed by such an agency or instrumentality.
7. Buy or sell real estate or interests in real estate, except that the Fund
may purchase and sell securities which are secured by real estate, securities of
companies which invest or deal in real estate and publicly traded securities of
real estate investment trusts. The Fund may not purchase interests in real
estate limited partnerships which are not readily marketable.
8. Buy or sell commodities or commodity contracts. (For purposes of this
restriction, futures contracts and forward foreign currency exchange contracts
are not deemed to be commodities or commodity contracts.)
9. Act as an underwriter except to the extent that, in connection with the
disposition of portfolio securities, it may be deemed to be an underwriter under
certain federal securities laws.
10. Make investments for the purpose of exercising control or management.
11. Invest in securities of other registered investment companies, except by
purchases in the open market involving only customary brokerage commissions and
as a result of which not more than 10% of its total assets (determined at the
time of investment) would be invested in such securities, or except as part of a
merger, consolidation or other acquisition.
E-8
12. Invest in interests in oil, gas or other mineral exploration or
development programs, except that the Fund may invest in the securities of
companies which invest in or sponsor such programs.
13. Make loans, except through (i) repurchase agreements and (ii) loans of
portfolio securities (limited to 30% [10%] of the Fund's total assets).
E-9
PRUDENTIAL SMALL COMPANIES FUND, INC.
INVESTMENT RESTRICTIONS
The Fund may not:
(1) With respect to 75% of the Fund's total assets, invest more than 5% of
the value of its total assets in the securities of any one issuer (other than
obligations issued or guaranteed by the United States Government, its agencies
or instrumentalities). It is the current policy (but not a fundamental policy)
of the Fund not to invest more than 5% of the value of its total assets in
securities of any one issuer.
(2) Purchase more than 10% of the outstanding voting securities of any one
issuer.
(3) Invest more than 25% of the value of its total assets in securities of
issuers in any one industry. This restriction does not apply to obligations
issued or guaranteed by the United States Government or its agencies or
instrumentalities.
[(4) Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three years of
continuous operation. This restriction shall not apply to any obligation issued
or guaranteed by the United States Government, its agencies or
instrumentalities.]
(4)[(5)] Purchase or sell real estate or interests therein, although the
-- Fund may purchase securities of issuers which engage in real estate
operations and securities which are secured by real estate or interests therein.
(5)[(6)] Purchase or sell commodities or commodity futures contracts, except
-- THAT TRANSACTIONS IN FOREIGN CURRENCY financial futures contracts AND
FORWARD CONTRACTS AND RELATED OPTIONS ARE NOT CONSIDERED TO BE TRANSACTIONS IN
COMMODITIES OR COMMODITY CONTRACTS [as described under "Investment Objective and
Policies" in the Prospectus and this Statement of Additional Information].
(6)[(7)] Purchase oil, gas or other mineral leases, rights or royalty
-- contracts or exploration or development programs, except that the Fund
may invest in the securities of companies which operate, invest in or sponsor
such programs.
(7)[(8)] Purchase securities of other investment companies, EXCEPT BY
-- PURCHASES IN THE OPEN MARKET INVOLVING ONLY CUSTOMARY BROKERAGE
COMMISSIONS AND AS A RESULT OF WHICH NOT MORE THAN 10% OF ITS TOTAL ASSETS
(DETERMINED AT THE TIME OF INVESTMENT) WOULD BE INVESTED IN SUCH SECURITIES OR
except in connection with a merger, consolidation, reorganization or acquisition
of assets.
(8)[(9)] Issue senior securities, borrow money or pledge its assets, except
-- that the Fund may borrow up to 20% of the value of the total assets
(calculated when the loan is made) for temporary, extraordinary or emergency
purposes or for the clearance of transactions. The Fund may pledge up to 20% of
the value of its total assets to secure such borrowings. Secured borrowings may
take the form of reverse repurchase agreements, pursuant to which the Fund would
sell portfolio securities for cash and simultaneously agree to repurchase them
at a specified date for the same amount of cash plus an interest component. For
purposes of this restriction, obligations of the Fund to Directors pursuant to
deferred compensation arrangements, the purchase and sale of securities on a
when-issued or delayed delivery basis, the purchase and sale of FORWARD FOREIGN
CURRENCY EXCHANGE CONTRACTS AND financial futures contracts and RELATED options
and collateral arrangements with respect to margins for financial futures
contracts and with respect to options are not deemed to be the issuance of a
senior security or a pledge of assets.
(9)[(10)] Make loans of money or securities, except by the purchase of debt
-- obligations in which the Fund may invest consistently with its investment
objective and policies or by investment in repurchase agreements.
(10)
---[(11)] Make short sales of securities except short sales against-the-box.
E-10
(11)
---[(12)] Purchase securities on margin, except for such short-term loans as
are necessary for the clearance of purchases of portfolio securities.
(For the purpose of this restriction, the deposit or payment by the Fund of
initial or maintenance margin in connection with financial futures contracts is
not considered the purchase of a security on margin.)
(12)
---[(13)] Engage in the underwriting of securities, except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933, as
amended (the "Securities Act"), in disposing of a portfolio security.
(13)
---[(14)] Invest for the purpose of exercising control or management of any
other issuer.
E-11
APPENDIX I
FIVE PERCENT SHAREHOLDER REPORT
As of August 9, 1996, the beneficial owners, directly or indirectly, of more
than 5% of the outstanding shares of the Funds are listed below. With respect to
Equity, Equity Income, Jennison, Multi-Sector and Small Companies Funds, there
were no beneficial owners, directly or indirectly, of more than 5% of the
outstanding shares of each of the respective Funds as of August 9, 1996.
FUND NAME REGISTRATION SHARES (PERCENT)
- ----------------------------------------------- --------------------------------------------- --------- -----------
Allocation -- Balanced Portfolio (Class C) Prudential Securities Inc. 20,619 (6.6%)
FA/Charles A Lismeier
9952 Wildwood Way
Villa Park, CA 92667
Elsie I Hammond
Tod Bonnie Maret
Subject to Sta Tod Rules-NJ
6122 NE Upper Wood Rd
Lees Summit MO 64064-2441
22,769 (7.3%)
Allocation -- Strategy Portfolio (Class C) Prudential Securities Inc. 8,205 (13.3%)
FA/Isaac Weber & Eve Weber
307 Prospect Ave
Hackensack, NJ 07601
Global Limited Maturity (Class C) Prudential Securities C/F 32 (34.4%)
Anita P D Ambrosio
Village Sundries Distributor
Sarsep D7D 08/26/94
9 Walnut Dr
Howell, NJ 07731-3023
Prudential Securities C/F
Sandra M Rizzo
Village Sundries
Distributors Sarsep Dtd 08/26/94
107 Starlight Rd
Howell, NJ
35 (37.6%)
Intermediate Global Income (Class C) Dr Urban Scheuring 922 (6.3%)
2600 Torrey Pines Rd B-28
La Jolla, CA 92037-3403
John Reis &
Kathleen Reis Jt Ten
10859 Patowmack Dr
Great Falls, VA 22066-3034
6,404 (44.2%)
Robert L Mofenson Ttee
Robert L Mofenson
MPP/PS Plan Dtd 01/01/74
FBO Robert L Mofenson
P O Box 1103
Great Neck, NY 11023-0103
1,526 (10.5%)
Mrs Pamella B Thayer
2938 Cherry Ln
Northbrook, IL 60062-4312
5,463 (37.7%)
Utility (Class C) Nancy A Hunter Ttee 24,969 (5.7%)
Nancy A Hunter Rev Liv Trust
Ua Dtd 08/03/92
2702 Galen Dr
Champaign, IL 61821-7034
I-1H-27
FUND NAME REGISTRATION SHARES (PERCENT)CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ----------------------------------------------- --------------------------------------------- --------- ----------------------- --------------------------------------------
2. Make short sales of securities. Short The restriction will become non-fundamental,
sales "against-the-box" are not subject to and is proposed to be changed, as described
this limitation. in Proposal No. 5(h).
3. Issue senior securities, borrow money or Issue senior securities or borrow money or
pledge its assets, except that the Fund may pledge its assets, except as permitted by
borrow from banks or through forward rolls, the 1940 Act Laws, Interpretations and
dollar rolls or reverse repurchase Exemptions. For purposes of this
agreements in an amount up to 30% of the restriction, the purchase or sale of
value of its total assets (calculated when securities on a when-issued or delayed
the loan is made) to take advantage of delivery basis, reverse repurchase
investment opportunities, for temporary, agreements, dollar rolls, short sales,
extraordinary or emergency purposes or for derivative and hedging transactions such as
the clearance of transactions. The Fund may interest rate swap transactions, and
pledge up to 30% of the value of its total collateral arrangements with respect
assets to secure such borrowings. The thereto, and transactions similar to any of
purchase or sale of securities on a the foregoing and collateral arrangements
when-issued or delayed delivery basis, with respect thereto, and obligations of the
forward foreign currency exchange contracts Fund to Directors pursuant to deferred
and collateral arrangements relating compensation arrangements are not deemed to
thereto, and collateral arrangements with be a pledge of assets or the issuance of a
respect to futures contracts and options senior security.
thereon and with respect to the writing of
options and obligations of the Fund to
Directors pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets subject to this restriction.
4. Purchase any security (other than Purchase the securities of any issuer if, as
obligations of the U.S. Government, its a result, the Fund would fail to be a
agencies or instrumentalities) if as a diversified company within the meaning of
result; (i) with respect to 75% of the the 1940 Act, and the rules and regulations
Fund's total assets, more than 5% of the promulgated thereunder, as each may be
Fund's total assets (determined at the time amended from time to time, except to the
of investment) would then be invested in extent that the Fund may be permitted to do
securities of a single issuer, or (ii) 25% so by exemptive order, SEC release,
or more of the Fund's total assets no-action letter or similar relief or
(determined at the time of investment) would interpretations (collectively, the "1940 Act
be invested in a single industry. Laws, Interpretations and Exemptions").
5. Buy or sell real estate or interests in Buy or sell real estate, except that
real estate, except that the Fund may investment in securities of issuers that
purchase and sell securities which are invest in real estate and investments in
secured by real estate, securities of mortgage-backed securities, mortgage
companies which invest or deal in real participations or other instruments
estate and publicly traded securities of supported or secured by interests in real
real estate investment trusts. The Fund may estate are not subject to this limitation,
not purchase interests in real estate and except that the Fund may exercise rights
limited partnerships which are not readily relating to such securities, including the
marketable. right to enforce security interests and to
hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
H-28
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
6. Buy or sell commodities or commodity Buy or sell physical commodities or
contracts, except that the Fund may purchase contracts involving physical commodities.
and sell financial futures contracts and The Fund may purchase and sell
options thereon, and forward foreign (i) derivative, hedging and similar
currency exchange contracts. instruments such as financial futures
contracts and options thereon, and
(ii) securities or instruments backed by,
or the return from which is linked to,
physical commodities or currencies, such as
forward currency exchange contracts, and the
Fund may exercise rights relating to such
instruments, including the right to enforce
security interests and to hold physical
commodities and contracts involving physical
commodities acquired as a result of the
Fund's ownership of instruments supported or
secured thereby until they can be liquidated
in an orderly manner.
7. Act as underwriter except to the extent No change.
that, in connection with the disposition of
portfolio securities, it may be deemed to be
an underwriter under certain federal
securities laws.
8. Make investments for the purpose of The restriction will not change, but will
exercising control or management. become non-fundamental.
9. Invest in securities of other investment The restriction will become non-fundamental
companies, except: (i) purchases in the open and, as described in Proposal No. 5(h), is
market involving only customary brokerage expected to be amended by the Board.
commissions and as a result of which the
Fund will not hold more than 3% of the
outstanding voting securities of any one
investment company, will not have invested
more than 5% of its total assets in any one
investment company and will not have
invested more than 10% of its total assets
(determined at the time of investment) in
such securities of one or more investment
companies, (ii) as part of a merger,
consolidation or other acquisition, or
(iii) purchases of affiliated investment
company shares pursuant to and subject to
such limits as the Commission may impose by
rule or order.
H-29
CURRENT PROPOSED
RESTRICTIONS RESTRICTIONS/POLICIES
- ------------ --------------------------------------------
Global Government (Class B) Raymond Butterly & 961 (25.8%)
Mary Butterly Jt Ten
102 Pershing Blvd
Lavallette, NJ 08735-2835
Prudential Securities Inc.
FA/Richard T Letwak Ttee
856 (23%)
Gantt Charitable Remainder Trust,
26400 La Alemeda, Suite 2000
Mission Viejo, CA 92691
Erna Stoll
Margarete L Stoll Jt Ten
170 Westmere Rd
Des Plaines, IL 60016-2745
308 (8.2%)
Albert W Froehde Jr &
Patricia A Levernier Jt Ten
230 Prairie Lane
Lake Zurich, IL 60047-2434
1,300 (34.9%)
Global Government (Class C) Dr Urban Scheuring 828 (54.5%)
2600 Torrey Pines Rd B-28
La Jolla, CA 92037-3403
Leslie R Smith &
Eudema G Smith
Jt Wros
11413 W 72 St Ter
Shawnee, KS 68203-4319
663 (43.6%)
Global Total Return (Class A) Merrill Lynch Pierce Fenner & Smith 1,609,763 (5.2%)
Attn: Physical Team
4800 Deer Lake Drive East
3rd Fl
Jacksonville, FL 32246-6484
Global Total Return (Class B) Raymond Butterly & 892 (16.9%)
Mary Butterly Jt Ten
102 Pershing Blvd
Lavallette, NJ 08735-2835
Francis A Connors
Box 954
Pottsville, PA 17901-0954
483 (9.1%)
Prudential Securities Inc.
FA/Richard T Letwak Ttee
1,171 (22.2%)
Gantt Charitable Remainder Trust,
26400 La Alemeda, Suite 2000
Mission Viejo, CA 92691
Mrs Virginia F Helferich
7600 Indian Hill Rd
Cincinnati, OH 45243-4028
355 (6.7%)
Terry L Harper
582 Kearney Pl
Meridian, ID 83642-2835
1,231 (23.3%)10. Make loans, except through The Fund may make loans, including loans of
(i) repurchase agreements and (ii) loans of assets of the Fund, repurchase agreements,
portfolio securities limited to 30% of the trade claims, loan participations or similar
Fund's total assets. investments, or as permitted by the 1940 Act
Laws, Interpretations and Exemptions. The
acquisition of bonds, debentures, other debt
securities or instruments, or participations
or other interests therein and investments
in government obligations, commercial paper,
certificates of deposit, bankers'
acceptances or instruments similar to any of
the foregoing will not be considered the
making of a loan, and is permitted if
consistent with the Fund's investment
objective.
11. Purchase more than 10% of all The restriction will not change, but will
outstanding voting securities of any one become non-fundamental, to the extent not
issuer. included within restriction no. 4.
I-2H-30
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
PRUDENTIAL NATURAL RESOURCES FUND, INC.
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
x PRUDENTIAL EQUITY FUND, INC
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292Annual Meeting of Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Deborah A. Docs, S. Jane RoseGrace C. Torres and Eugene S.
StarkMarguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to
represent and to vote, as designated below, all the shares of common stockCommon Stock of
Prudential Equitythe Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of Shareholders
to be held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 2, 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2(b). To approveIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the elimination of the Fund's investment
restriction regarding unseasoned issuers.
2(c). To approve an amendment of the Fund's investment
restriction relatingProxies are authorized to securities lending.
3. To ratify the selection by the Board of Directors of Price
Waterhouse LLP as independent accountants for the fiscal year ending
December 31, 1996.
4. To transactvote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC03 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL NATURAL RESOURCES FUND, INC.
THE ENCLOSED
ENVELOPE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED INBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE MANNER DIRECTED BYNOMINEES AND EACH OF THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTEDPROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 2, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
2b. / / / / / /
2c. / / / / / /
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 0 0 0
08) David R. Odenath, Jr., 09) Richard A.
Redeker, 10) Judy A. Rice, 11) Robin B. Smith,
12) Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposalsline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new subadvisory agreement between
Prudential Investments Fund Management LLC
(PIFM) and Jennison Associates LLC. 0 0 0
3. To permit PIFM to enter into or make your selection. For detailed
information refermaterial
changes to subadvisory agreements without 0 0 0
shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) fund to become non-diversified 0 0 0
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL FINANCIAL SERVICES FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
After making your selections, signing and dating the card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
x PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints S. Jane Rose, Grace C. Torres and Ellyn C. VoginMarguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to
represent and to vote, as designated below, all the shares of common stockCommon Stock of
Prudential Global Limited Maturitythe Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of
Shareholders
to be held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES AND "FOR"
EACH OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
3. To ratify the selection by the Board of Directors of Deloitte
& Touche LLP as independent accountants for the fiscal year ending
October 31, 1996.
4. To transact such other business as may properly come before the Meeting
and any adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPESHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THISTHE PROXY
WILL BE VOTED FOR THE NOMINEES AND FOR PROPOSALS 1,2, 3, 4, 5 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE PROPOSALS.
IF VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain)BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE BOX
For Against Abstain
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
To ensureUNITED STATES.
In their discretion, the accuracy ofProxies are authorized to vote upon such other business
as may properly come before the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.Meeting or any adjournment thereof.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC04 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election ofIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL SECTOR FUNDS, INC. - PRUDENTIAL FINANCIAL SERVICES FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: - Mark "FOR ALL" if you wish01) Saul K. Fenster, 02) Delayne FOR WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 0 0 0
08) David R. Odenath, Jr., 09) Richard A.
Redeker, 10) Judy A. Rice, 11) Robin B. Smith,
12) Louis A. Weil III, 13) Clay T. Whitehead
To withhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposalsline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new subadvisory agreement between
Prudential Investments Fund Management LLC
(PIFM) and Jennison Associates LLC. 0 0 0
3. To permit PIFM to enter into or make your selection. For detailed
information refermaterial
changes to subadvisory agreements without 0 0 0
shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) NOT APPLICABLE
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) NOT APPLICABLE
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL HEALTH SCIENCES FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
After making your selections, signing and dating the card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
x PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Deborah A. Docs, S. Jane Rose and
Grace C. Torres and Marguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to
represent and to vote, as designated below, all the shares of common stockCommon Stock of
Prudential Intermediate Global Incomethe Fund
Inc. (the Fund), held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of Shareholders
to be held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2.(b). To approveIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the elimination of the Fund's investment
restriction regarding unseasoned issuers.
3. To ratify the selection by the Board of Directors of Deloitte &
Touche LLP as independent accountants for the fiscal year ending
December 31, 1996.
4. To transactProxies are authorized to vote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC05 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL SECTOR FUNDS, INC. - PRUDENTIAL HEALTH SCIENCES FUND
THE ENCLOSED
ENVELOPE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED INBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE MANNER DIRECTED BYNOMINEES AND EACH OF THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTEDPROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 2, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
2b. / / / / / /
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 0 0 0
08) David R. Odenath, Jr., 09) Richard A.
Redeker, 10) Judy A. Rice, 11) Robin B. Smith,
12) Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposals andline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
3. To permit Prudential Investments Fund
Management LLC (PIFM) to enter into or make
your selection. For detailed
information refermaterial changes to subadvisory agreements 0 0 0
without shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) NOT APPLICABLE
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) NOT APPLICABLE
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL TECHNOLOGY FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
After making your selections, signing and dating the card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
x PRUDENTIAL JENNISON FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints S. Jane Rose, Grace C. Torres and Ellyn C.
VoginMarguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to
represent and to vote, as designated below, all the shares of common stockCommon Stock of
Prudential Jennisonthe Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of
Shareholders
to be held on October 30, 1996January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 2, 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2.(b) To approveIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the elimination of the Fund's investment
restriction regarding unseasoned issuers.
3. To ratify the selection by the Board of Directors of Deloitte
& Touche as independent accountants for the fiscal year ending
September 30, 1996.
4. To transactProxies are authorized to vote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC06 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL SECTOR FUNDS, INC. - PRUDENTIAL TECHNOLOGY FUND
THE ENCLOSED
ENVELOPE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED INBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE MANNER DIRECTED BYNOMINEES AND EACH OF THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTEDPROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 2, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
2b. / / / / / /
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 0 0 0
08) David R. Odenath, Jr., 09) Richard A.
Redeker, 10) Judy A. Rice, 11) Robin B. Smith,
12) Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposalsline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new subadvisory agreement between
Prudential Investments Fund Management LLC
(PIFM) and Jennison Associates LLC. 0 0 0
3. To permit PIFM to enter into or make your selection. For detailed
information refermaterial
changes to subadvisory agreements without 0 0 0
shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) NOT APPLICABLE
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) NOT APPLICABLE
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL UTILITY FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
After making your selections, signing and dating the card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
x PRUDENTIAL MULTI-SECTOR FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints SusanGrace C. Cote,Torres and Marguerite E.H. Morrison and
S. Jane Rose as Proxies, each
with the power of substitution, and hereby authorizes each of them to
represent and to vote, as designated below, all the shares of common stockCommon Stock of
Prudential Multi-Sectorthe Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of
Shareholders
to be held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES AND "FOR"
EACH OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2.(c) To approve an amendment of the Fund's investment restriction relating
to securities lending.
3. To ratify the selection by the Board of Directors of
Deloitte & Touche LLP as independent accountants for the fiscal year
ending April 30, 1997.
4. To transact such other business as may properly come before the Meeting
and any adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPESHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THISTHE PROXY
WILL BE VOTED FOR ALL THE NOMINEES AND FOR PROPOSALS LISTED ABOVE.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------2, 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE PROPOSALS.
IF VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain)BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE BOX
For Against Abstain
2c. / / / / / /
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
To ensureUNITED STATES.
In their discretion, the accuracy ofProxies are authorized to vote upon such other business
as may properly come before the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.Meeting or any adjournment thereof.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC07 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election ofIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL SECTOR FUNDS, INC. - PRUDENTIAL UTILITY FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: - Mark "FOR ALL" if you wish01) Saul K. Fenster, 02) Delayne FOR WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 0 0 0
08) David R. Odenath, Jr., 09) Richard A.
Redeker, 10) Judy A. Rice, 11) Robin B. Smith,
12) Louis A. Weil III, 13) Clay T. Whitehead
To withhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposalsline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new subadvisory agreement between
Prudential Investments Fund Management LLC
(PIFM) and Jennison Associates LLC. 0 0 0
3. To permit PIFM to enter into or make
your selection. For detailed
information refermaterial changes to subadvisory agreements 0 0 0
without shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) fund to become non-diversified 0 0 0
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) NOT APPLICABLE
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.
- After making your selections, signingWebsite www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and datingfollow the
card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
xsimple instructions.
PRUDENTIAL SMALL COMPANIESCOMPANY FUND, INC.
ONE SEAPORT PLAZAGATEWAY CENTER THREE
NEWARK, NEW YORK, NEW YORK 10292JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints S. Jane RoseGrace C. Torres and Eugene S. StarkMarguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to
represent and to vote, as designated below, all the shares of common stockCommon Stock of
Prudential Small Companiesthe Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of Shareholders
to be held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 2, 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2.(a). To approve an amendment of Fund's investment restrictions
regarding investment in shares of other investment companies.
2.(b). To approveIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the elimination of the Fund's investment
restriction regarding unseasoned issuers.
2(d). To approve a change in the Fund's investment policiesProxies are authorized to permit the purchase and sale of over-the-counter options on stocks and
options on stock indices.
2(e). To approve an amendment to the Fund's investment restriction to permit
foreign currency exchange transactions.
3. To ratify the selection by the Board of Directors of Price
Waterhouse LLP as independent accountants for the fiscal year ending
September 30, 1996.
4. To transactvote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC08 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL SMALL COMPANY FUND, INC.
THE ENCLOSED
ENVELOPE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED INBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE MANNER DIRECTED
BYNOMINEES AND EACH OF THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTEDPROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 2, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
2a. / / / / / /
2b. / / / / / /
2d. / / / / / /
2e. / / / / / /
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 0 0 0
08) David R. Odenath, Jr., 09) Richard A.
Redeker, 10) Judy A. Rice, 11) Robin B. Smith,
12) Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposalsline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new subadvisory agreement between
Prudential Investments Fund Management LLC
(PIFM) and Jennison Associates LLC. 0 0 0
3. To permit PIFM to enter into or make your selection. For detailed
information refermaterial
changes to subadvisory agreements without 0 0 0
shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) fund diversification 0 0 0
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) engaging in underwriting 0 0 0
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.
- After making your selections, signingWebsite www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and datingfollow the
card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
xsimple instructions.
PRUDENTIAL UTILITYTAX-MANAGED SMALL-CAP FUND, INC.
ONE SEAPORT PLAZAGATEWAY CENTER THREE
NEWARK, NEW YORK, NEW YORK 10292JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Grace C. Torres and Marguerite E.H. Morrison S. Jane Rose and
Eugene S. Stark as Proxies, each
with the power of substitution, and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of common stockCommon Stock of Prudential Utilitythe
Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of
Shareholders to be
held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2(f). To approve a change inIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the investment objective of the
Fund.
3. To ratify the selection by the Board of Directors of Price
Waterhouse LLP as independent accountants for the fiscal year ending
December 31, 1996.
4. To transactProxies are authorized to vote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC10 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
THE ENCLOSED
ENVELOPE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED INBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE MANNER DIRECTED BYNOMINEES AND EACH OF THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTEDPROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 2, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
2f. / / / / / /
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 08) 0 0 0
David R. Odenath, Jr., 09) Richard A. Redeker,
10) Judy A. Rice, 11) Robin B. Smith, 12)
Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposals andline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
3. To permit Prudential Investments Fund
Management LLC (PIFM) to enter into or make
your selection. For detailed
information refermaterial changes to subadvisory agreements 0 0 0
without shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) fund diversification 0 0 0
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.
- After making your selections, signingWebsite www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and datingfollow the
card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
x THE GLOBAL GOVERNMENT PLUSsimple instructions.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
ONE SEAPORT PLAZAGATEWAY CENTER THREE
NEWARK, NEW YORK, NEW YORK 10292JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints SusanGrace C. Cote,Torres and Marguerite E.H. Morrison
and S. Jane Rose as Proxies, each
with the power of substitution, and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of common stockCommon Stock of The Global Government Plusthe
Fund Inc. (the
Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual
Meeting of Shareholders to be
held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 2, 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2. N/A
3. To ratifyIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the selection by the Board of Directors of Price
Waterhouse LLP as independent accountants for the fiscal year ending
December 31, 1996.
4. To transactProxies are authorized to vote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC11 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
THE ENCLOSED
ENVELOPE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED INBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE MANNER DIRECTED
BYNOMINEES AND EACH OF THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTEDPROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 08) 0 0 0
David R. Odenath, Jr., 09) Richard A. Redeker,
10) Judy A. Rice, 11) Robin B. Smith, 12)
Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposalsline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new subadvisory agreement between
Prudential Investments Fund Management LLC
(PIFM) and Jennison Associates LLC. 0 0 0
3. To permit PIFM to enter into or make your selection. For detailed
information refermaterial
changes to subadvisory agreements without 0 0 0
shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) fund diversification 0 0 0
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- It is very important that you date---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and sign your card. Failurehave the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to do so
may result in your proxy being declared invalid.Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC. -
After making your selections, signing and dating the card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope. Please do not enclose anything else in
this envelope, as doing so may delay the tabulationPRUDENTIAL ACTIVE BALANCED FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
PROXY
x THE GLOBAL TOTAL RETURN FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints S. Jane RoseGrace C. Torres and Eugene S. StarkMarguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of common stockCommon Stock of The Global Total Returnthe
Fund Inc. (the Fund) held of record by the undersigned on August 9, 1996November 3, 2000 at the Annual Meeting of Shareholders to be
held on October 30, 1996,January 17, 2001 or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OFSHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND "FOR"
EACHFOR PROPOSALS 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE FOLLOWING PROPOSALS.
1. Election of Directors
Nominees: Edward D. Beach
Delayne D. Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
2. N/A
3. To ratifyIF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the selection by the Board of Directors of Deloitte
& Touche as independent accountants for the fiscal year ending
December 31, 1996.
4. To transactProxies are authorized to vote upon such other business
as may properly come before the Meeting andor any adjournmentsadjournment thereof.
PLEASETO VOTE, MARK SIGN, DATEBLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC12 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THETHIS PORTION ONLY
THIS PROXY CARD PROMPTLY USINGIS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
THE ENCLOSED
ENVELOPE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED INPRUDENTIAL INVESTMENT PORTFOLIOS, INC. -
PRUDENTIAL ACTIVE BALANCED FUND
THE MANNER DIRECTED BYBOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTEDNOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR PROPOSALS 1, 3 AND 4.
PLACE "X" ONLY IN ONE BOX
1. Election of Nominees
/ / For All / / Withhold All / / For All Except As Listed Below
List Exceptions:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
VOTING INSTRUCTIONS: Mark your vote
(For, Against, Abstain) IN THE BOX
For Against Abstain
3. / / / / / /
4. / / / / / /
[NAME/ADDRESS]
WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 08) 0 0 0
David R. Odenath, Jr., 09) Richard A. Redeker,
10) Judy A. Rice, 11) Robin B. Smith, 12)
Louis A. Weil III, 13) Clay T. Whitehead
To ensure the accuracy of the information, we have graphically imaged the
issuer's card. Therefore, please be aware that there may be some references
to "reverse side" which do not pertain.
PROXY CARD INSTRUCTIONS . . .
This Proxy Card is made up of two sections.
The Proposal Section has been designed to present the issuer's proposals for
your consideration. You may wish to retain this section for your records.
The Voting Section has been designed to accommodate the various proposals and
offer quick and accurate tabulation of your valued vote.
For Election of Nominees:
- Mark "FOR ALL" if you wishwithhold authority to vote, for all nominees.
- Mark "WITHHOLD ALL" if you wish to vote against all nominee.
- Mark "FOR ALL EXCEPT AS LISTED BELOW" if you wish to withhold
authority for any individual nominee. Then,mark "For All Except"
and write the name of the
nominee for whom you wish to withhold authority in the space
provided. If you wish to withhold authority for more than one
nominee, simply list the names in the spaces provided andnominee's number on the back of the voting section of the Proxy card.
Please read the issuer's proposals andline below.
---------------------------------------------------
FOR AGAINST ABSTAIN
3. To permit Prudential Investments Fund
Management LLC (PIFM) to enter into or make
your selection. For detailed
information refermaterial changes to subadvisory agreements 0 0 0
without shareholder approval.
4. To approve an amendment to the additional literature enclosed. In orderManagement
Agreement to facilitate electronic scanning please:
- Make dark, heavy marks withinpermit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the appropriate boxFund's
fundamental investment restrictions or
policies relating to indicate your
selection.
- Use a pencilthe following:
(a) fund diversification 0 0 0
(b) issuing senior securities, borrowing money
or pen--black or blue ink only--to completepledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) NOT APPLICABLE
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the form.
- Do not make any stray marks onselection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the form.
- Erase all unwanted marks completely.
Proper Marks For Against Abstain
[EXAMPLE OF PROPER MARKS APPEARS HERE]
Improper Marks For Against Abstain
[EXAMPLE OF IMPROPER MARKS APPEARS HERE]
- If you wish to attend the meeting and vote your shares, mark the box
for a "Legal Proxy" and one will be mailed to you.
- If you wish to attend the meeting, and have your vote included with
ours, mark the box for an "Admission Pass" and one will be mailed to you.
-Fund's current fiscal
year.
NOTE: Please sign exactly as name appears.appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. - It is very important that you date andIf a corporation, please sign your card. Failure to do so
may result in
your proxy being declared invalid.
- After making your selections, signing and dating the card, carefully
detach the Voting Section and return it to us for tabulation, using the
enclosed postage paid envelope.full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please do not enclose anything else in
this envelope, as doing so may delay the tabulation of your vote.
Proposal Section. Please retain for your records.
Voting Section. Enter your vote, date and sign. Detach and return in the
enclosed envelope, right side up, without additional enclosures.
ADDITIONAL EXCEPTED NOMINEES
----------------------------
---------------------------- PROXY SERVICES
----------------------------
YOUR VOTE IS IMPORTANT! PROXY SERVICES, PO BOX 550, NEW YORK, NY 10013-055
To Our Clients:
The enclosed proxy material pertains to shares we hold in your account in
"Street" name (that is, not registered in your name). As the holder of record,
only we can vote these shares at the stockholders' meeting.
To allow us to vote your shares in accordance with your direction, please
indicate your instructions on the enclosed proxy, sign it and return it to us in
the enclosed self-addressed stamped envelope. The Exchange rules state that if
your instructions are not received by the tenth day before the meeting, the
proxy may be voted at our discretion. If you are unable to return the proxy by
that date, you may still communicate your instructions by contacting your
financial advisor. As long as we receive your instructions prior to the
stockholders' meeting, we will follow them, even if your discretionary vote has
already been given.
If you sign without otherwise marking the form, the shares will be voted as
recommended by management on the meeting agenda. If you wish to attend the
meeting in person or have a legal proxy covering your shares, please contact
your financial advisor.
Form 2502 (REV. 7-96)
YOUR VOTE IS IMPORTANT! PROXY SERVICES, PO BOX 550 , NEW YORK, NY 10013-055
To our Clients:
The enclosed proxy material pertains to shares we hold in your account in
"Street" name (that is, not registered in your name). As the holder of record,
only we can vote these shares at the stockholders' meeting.
Because all the proposals are non-routine, the Exchange rules state that to
represent your shares at the meeting, we must have your specific voting
instructions.
Please mark your choices on the proxy and be sure to sign it. Returnand date this Proxy.
- ---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the formProxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to us promptly inWebsite www.proxyvote.com
3) Enter the enclosed self-addressed stamped envelope.
If you sign without otherwise marking12-digit control number set forth on the form,Proxy card and follow the
simple instructions.
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC. -
PRUDENTIAL JENNISON EQUITY OPPORTUNITY FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Grace C. Torres and Marguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to represent
and to vote, as designated below, all the shares will be voted as
recommendedof Common Stock of the
Fund held of record by the managementundersigned on November 3, 2000 at the Meeting to be
held on January 17, 2001 or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
THE PROXY WILL BE VOTED FOR THE NOMINEES AND FOR PROPOSALS 3, 4, 5, 6 AND 7
IF YOU DO NOT SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED
DECEMBER 8, 2000 FOR DISCUSSION OF THE PROPOSALS.
IF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC13 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC. -
PRUDENTIAL JENNISON EQUITY OPPORTUNITY FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 08) 0 0 0
David R. Odenath, Jr., 09) Richard A. Redeker,
10) Judy A. Rice, 11) Robin B. Smith, 12)
Louis A. Weil III, 13) Clay T. Whitehead
To withhold authority to vote, mark "For All Except"
and write the nominee's number on the line below.
---------------------------------------------------
FOR AGAINST ABSTAIN
3. To permit Prudential Investments Fund
Management LLC (PIFM) to enter into or make
material changes to subadvisory agreements 0 0 0
without shareholder approval.
4. To approve an amendment to the Management
Agreement to permit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the Fund's
fundamental investment restrictions or
policies relating to the following:
(a) fund diversification 0 0 0
(b) issuing senior securities, borrowing money
or pledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) engaging in underwriting 0 0 0
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
6. To amend the Fund's objective 0 0 0
7. To ratify the selection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the Fund's current fiscal
year.
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a meeting agenda.corporation, please sign in
full corporate name by president or other authorized officer. If you wisha
partnership, please sign in partnership name by authorized person.
Please be sure to attendsign and date this Proxy.
- ---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the meetingProxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC. -
PRUDENTIAL JENNISON GROWTH FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
January 17, 2001, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Grace C. Torres and Marguerite E.H. Morrison as Proxies, each
with the power of substitution, and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of Common Stock of the
Fund held of record by the undersigned on November 3, 2000 at the Meeting to be
held on January 17, 2001 or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE PROXY
WILL BE VOTED FOR THE NOMINEES AND FOR PROPOSALS 3, 4, 5 AND 7 IF YOU DO NOT
SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED DECEMBER 8, 2000
FOR DISCUSSION OF THE PROPOSALS.
IF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
PRUC14 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC. -
PRUDENTIAL JENNISON GROWTH FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
1. To elect thirteen Directors.
Nominees: 01) Saul K. Fenster, 02) Delayne FOR WITHHOLD FOR ALL
Dedrick Gold, 03) Robert F. Gunia, 04) Douglas ALL ALL EXCEPT
H. McCorkindale, 05) W. Scott McDonald, Jr.,
06) Thomas T. Mooney, 07) Stephen P. Munn, 08) 0 0 0
David R. Odenath, Jr., 09) Richard A. Redeker,
10) Judy A. Rice, 11) Robin B. Smith, 12)
Louis A. Weil III, 13) Clay T. Whitehead
To withhold authority to vote, mark "For All Except"
and write the nominee's number on the line below.
---------------------------------------------------
FOR AGAINST ABSTAIN
3. To permit Prudential Investments Fund
Management LLC (PIFM) to enter into or make
material changes to subadvisory agreements 0 0 0
without shareholder approval.
4. To approve an amendment to the Management
Agreement to permit PIFM to allocate assets 0 0 0
among affiliated and unaffiliated subadvisers.
5. To approve certain changes to the Fund's
fundamental investment restrictions or
policies relating to the following:
(a) fund diversification 0 0 0
(b) issuing senior securities, borrowing money
or pledging assets 0 0 0
(c) buying and selling real estate 0 0 0
(d) buying and selling commodities and
commodity contracts 0 0 0
(e) fund concentration 0 0 0
(f) engaging in personunderwriting 0 0 0
(g) making loans 0 0 0
(h) other investment restrictions 0 0 0
7. To ratify the selection of
PricewaterhouseCoopers LLP as independent 0 0 0
accountants for the Fund's current fiscal
year.
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
haveguardian, please give full title as such. If a legal proxy covering your
shares,corporation, please contact your financial advisor.
FORM 2503 (REV. 7-96)sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy.
- ---------------------------------- -------
- ---------------------------------- -------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------- --------
- ---------------------------------- --------
Signature (Joint Owners) Date
________________________________________________________________________________