PRUDENTIAL MUTUAL FUNDS - ------------------------------------------------------------------------------ Supplement dated September 13, 2000 The following information supplements the Prospectus of each of the Funds listed below. ANNUAL OR SPECIAL MEETING OF SHAREHOLDERS On August 22, 2000, the Board of Directors/Trustees approved the proposals summarized below. The proposals will be submitted for approval by shareholders of the Funds (or their respective series) at an Annual or Special Meeting of Shareholders scheduled to be held on December 14, 2000. Election of Directors/Trustees All Funds. The Board of Directors/Trustees approved a proposal to elect Eugene C. Dorsey, Delayne Dedrick Gold, Robert F. Gunia, Thomas T. Mooney, Stephen P. Munn, David R. Odenath, Jr., Richard A. Redeker, John R. Strangfeld, Jr., Nancy H. Teeters and Louis A. Weil, as Directors/Trustees of each of the Funds. How the Fund is Managed--Manager All Funds. Prudential Investments Fund Management LLC (PIFM or the Manager) manages each Fund's investment operations and is responsible for supervising the Fund's subadviser, The Prudential Investment Corporation (Prudential Investments). The Board of Directors/Trustees of each Fund approved an amendment to the management contract with PIFM to provide PIFM with flexibility to select additional investment advisers and allocate Fund assets to them for management. Specifically, if shareholders approve the amended management contract, PIFM will have the authority (1) to hire one or more additional investment advisers for a Fund, subject to Board approval, and (2) to allocate and reallocate Fund assets among such advisers and Prudential Investments. The Board also considered an amendment to the investment advisory contract with Prudential Investments, which will be submitted to shareholders for their approval. The proposed amendment provides that PIFM may increase or decrease, without limitation, the allocation of Fund assets under the management of Prudential Investments, and MF2000C7 that Prudential Investments will be compensated only with respect to assets allocated to its management. The proposal to allow the Fund to employ other investment advisers without a shareholder vote is subject to certain conditions. The first condition is that Fund shareholders must approve this grant of authority to the Board of Directors/Trustees. Second, this proposal may be implemented only if the Fund is permitted to rely on an exemptive order previously issued by the Securities and Exchange Commission or receives a new exemptive order authorizing the arrangement. Subject to satisfaction of these two conditions, which cannot be assured, the Manager would be permitted, with Board approval but without further shareholder approval, to employ new investment advisers for a Fund, change the terms of a Fund's investment advisory agreements or enter into new investment advisory agreements with existing advisers. Shareholders would be notified of any changes in advisers or of any material amendments to advisory agreements. Shareholders of a Fund would continue to have the right to terminate an investment advisory agreement for a Fund at any time by a vote of the majority of the outstanding voting securities of the Fund. Borrowing All Funds (except Prudential Total Return Bond Fund, Inc.). If approved by shareholders, each applicable Fund's investment restriction regarding borrowing would be modified to allow borrowing of up to 33 1/3% of a Fund's total assets and to delete the requirement that such borrowing can be made only from banks. Investment in Securities of Other Investment Companies All Funds (except Prudential Total Return Bond Fund, Inc.). If approved by shareholders, each applicable Fund's investment restriction regarding the purchase of shares of investment companies would be modified to permit each Fund to invest in the shares of other registered investment companies as permitted under applicable law or by an order of the Commission. To the extent that a Fund does invest in securities of other investment companies, shareholders may be subject to duplicate management and advisory fees. Securities Lending All Funds (except Prudential Total Return Bond Fund, Inc.). If approved by shareholders, each applicable Fund's investment restriction regarding securities lending would be modified to permit each Fund to make loans of portfolio securities in amounts up to 33 1/3% of the Fund's total assets and as permitted by an order of the Commission. OTHER MATTERS Prudential Municipal Series Fund and Prudential Government Securities Trust. Shareholders of Prudential Municipal Series Fund (Connecticut Money Market Series, Massachusetts Series, Massachusetts Money Market Series, North Carolina Series and Ohio Series) and Prudential Government Securities Trust (Short-Intermediate Term Series) are each expected to vote on a proposal to merge their Series into another Prudential mutual fund prior to the shareholder meetings described above. If shareholders of these Series do not approve the proposed merger, shareholders of those Series will likely be solicited to vote on the matters described above under 'ANNUAL OR SPECIAL MEETING OF SHAREHOLDERS'. Listed below are the names of the Prudential Mutual Funds and the dates of the Prospectus to which this Supplement relates. Name of Fund Prospectus Date - ------------------------------------------ ------------------ Prudential California Municipal Fund California Series December 23, 1999 California Income Series December 23, 1999 California Money Market Series December 23, 1999 Prudential Government Income Fund, Inc. May 4, 2000 Prudential Government Securities Trust Money Market Series January 31, 2000 Short-Intermediate Term Series January 31, 2000 U.S. Treasury Money Market Series January 31, 2000 Prudential High Yield Fund, Inc. March 3, 2000 Prudential High Yield Total Return Fund, Inc. June 5, 2000 Prudential Municipal Bond Fund High Income Series June 30, 2000 Insured Series June 30, 2000 Prudential Municipal Series Fund Connecticut Money Market Series December 23, 1999 Florida Series December 23, 1999 Massachusetts Series December 23, 1999 Massachusetts Money Market Series December 23, 1999 New Jersey Series December 23, 1999 New Jersey Money Market Series December 23, 1999 New York Series December 23, 1999 Name of Fund Prospectus Date - ------------------------------------------ ------------------ New York Money Market Series December 23, 1999 North Carolina Series December 23, 1999 Ohio Series December 23, 1999 Pennsylvania Series December 23, 1999 Prudential National Municipals Fund, Inc. March 3, 2000 Prudential Short-Term Corporate Bond Fund, Inc. May 1, 2000 Prudential Total Return Bond Fund, Inc. May 12, 2000