SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Under Rule 14a-12
Prudential Europe Growth Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World 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):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRUDENTIAL EUROPE GROWTH FUND, INC.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
PRUDENTIAL INTERNATIONAL VALUE FUND
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
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IMPORTANT PROXY MATERIALS
PLEASE VOTE NOW!
FEBRUARY 15, 2001
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Dear Shareholder:
I am inviting you to vote on several proposals relating to the management
and operation of your Fund. A shareholder meeting of each of Prudential Europe
Growth Fund, Inc., Prudential Pacific Growth Fund, Inc., Prudential Real Estate
Securities Fund and Prudential World Fund, Inc. (Prudential Global Growth Fund,
Prudential International Value Fund and Prudential Jennison International Growth
Fund) is scheduled for March 28, 2001. This package contains information about
the proposals and includes materials you will need to vote.
The Boards of Directors/Trustees of each Fund have reviewed the proposals
and have recommended that the proposals be presented to you for consideration.
Although the Directors/Trustees have determined that the proposals are in your
best interest, the final decision is yours.
Shareholders of each Fund are being asked to approve many of the same
proposals, so in order to save money for your Fund, one proxy statement has been
prepared for all of the Funds listed above. To help you understand the
proposals, we are including a section that answers commonly asked questions. The
accompanying proxy statement includes a detailed description of 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 web 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,
/s/ David R. Odenath, Jr.
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 issues:
- to elect 9 Board members,
- to approve new subadvisory agreements,
- to permit the Fund's manager to enter into or make material changes to
your Fund's subadvisory agreements 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's independent accountants for the
current year.
Q. WHY AM I RECEIVING PROXY INFORMATION ON A FUND THAT I DO NOT OWN?
A. Shareholders of all of the 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.
Q. WHY AM I RECEIVING MORE THAN ONE PROXY STATEMENT OR MAILING?
A. You will receive a separate proxy statement for each Fund that you own.
Also, if you hold shares in more than one account--for example, in an
individual account and in an IRA--you will receive multiple proxy
statements. Each proxy card should be voted and returned.
Q. ARE YOU RECOMMENDING A NEW BOARD FOR THE FUNDS?
A. No. The Fund Boards nominated the nine individuals who currently serve on
the existing Boards. Six of the individual Board nominees are independent of
Prudential.
Q. WILL THE PROPOSED CHANGES RESULT IN HIGHER MANAGEMENT FEES?
A. No. The rate of the management fees charged to each Fund will remain the
same.
Q. WILL THE PROPOSED CHANGES RESULT IN HIGHER DIRECTORS' OR TRUSTEES' FEES?
A. No.
Q. WHAT ARE "FUNDAMENTAL" INVESTMENT RESTRICTIONS, AND WHY ARE THEY PROPOSED TO
BE CHANGED?
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. The law requires certain investment policies to be
designated as fundamental. Each Fund adopted a number of fundamental
investment restrictions, 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 Boards believe that certain fundamental investment restrictions that are
not legally required should be eliminated. The Boards also believe that
other fundamental restrictions should be modernized and made more uniform.
The reason for these changes is to provide greater 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. No.
Q. WHAT WILL BE THE EFFECT OF THE PROPOSED CHANGES TO MY FUND'S FUNDAMENTAL
RESTRICTIONS?
A. The Boards do not believe that the proposed changes to fundamental
investment restrictions will result in a major restructuring of any Fund's
investment portfolio. The changes will allow each Fund greater flexibility
to respond to investment opportunities. By making certain investment
policies and restrictions non-fundamental, the Boards may make changes in
the future that it considers desirable without the necessity of a
shareholder vote and the related additional expenses. A shareholder vote is
not necessary for changes to non-fundamental investment policies or
restrictions.
Q. 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 9. For Proposals No. 2, 3, 4, 5, 6, 7 and 8, we need the
affirmative vote of a majority of each applicable Fund'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 March 28, 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 approved the proposals and recommends that you
vote to approve them.
Q. HOW MANY VOTES AM I ENTITLED TO CAST?
A. As a shareholder, you are entitled to one vote for each share you own of
your Fund on the record date. The record date is January 19, 2001.
Q. HOW DO I VOTE MY SHARES?
A. You can vote your shares by completing and signing the enclosed proxy card,
and mailing it in the enclosed postage paid envelope. If you need any
assistance, or have any questions regarding the proposal or how to vote your
shares, please call Prudential at (800) 225-1852.
You may also vote via the Internet. To do so, have your proxy card available
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 their names appear
on the account registration shown on the card.
JOINT ACCOUNTS: Both owners must sign and the signatures should conform
exactly to the names shown 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 statement contains more detailed information about each of
the proposals relating to your Fund. Please read it carefully.
PRUDENTIAL EUROPE GROWTH FUND, INC.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
PRUDENTIAL INTERNATIONAL VALUE FUND
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102
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NOTICE OF
JOINT SPECIAL AND ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON
MARCH 28, 2001
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TO OUR SHAREHOLDERS:
Joint meetings of the shareholders of each of the above-listed Funds (each,
a Meeting) will be held at the offices of Prudential Investments Fund Management
LLC (PIFM), 100 Mulberry Street, Gateway Center Three, 14th Floor, Newark, New
Jersey on March 28, 2001 at 10 a.m. The purpose of the Meetings is to consider
and act upon the following proposals:
1. For all Funds, to elect nine Directors or Trustees.
2. For Prudential Europe Growth Fund, Inc., to approve a new subadvisory
agreement between PIFM and Gartmore Global Partners.
3. For Prudential Pacific Growth Fund, Inc., to approve a new subadvisory
agreement between PIFM and Jardine Fleming International Management Inc.
4. For Prudential Global Growth Fund, a series of Prudential World Fund,
Inc., to approve a new subadvisory agreement between PIFM and Jennison
Associates LLC.
5. For Prudential International Value Fund, a series of Prudential World
Fund, Inc., to approve a new subadvisory agreement between PIFM and Bank
of Ireland Asset Management (U.S.) Limited.
6. For all Funds, to permit PIFM to enter into or make material changes to
subadvisory agreements without shareholder approval.
7. For all Funds, to approve an amendment to the Management Agreement to
permit PIFM to allocate assets among affiliated and unaffiliated
subadvisers.
8. For all Funds, as applicable, to approve changes to certain of a Fund's
fundamental investment restrictions or policies, relating to the
following:
(a) fund diversification
(b) issuing senior securities, borrowing money or pledging assets
(c) buying and selling real estate
(d) buying and selling commodities and commodity contracts
(e) fund concentration
(f) making loans
(g) other investment restrictions relating to investing for control,
investing in securities of other investment companies and, for
Prudential International Value Fund and Prudential Global Growth Fund
only, purchasing warrants.
9. For all Funds, to ratify the selection of PricewaterhouseCoopers LLP as
independent accountants for the Fund's current fiscal year.
For each of Prudential Europe Growth Fund, Inc., Prudential Pacific Growth
Fund, Inc. and Prudential World Fund, Inc., the Meeting will be the Fund's
annual meeting. For Prudential Real Estate Securities Fund, the Meeting will be
a special meeting.
You are entitled to vote at the Meeting, and at any adjournments thereof, of
each Fund in which you owned shares at the close of business on January 19,
2001. If you attend a Meeting, you may vote your shares in person. IF YOU DO NOT
EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN EACH
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE OR VOTE BY INTERNET OR
TELEPHONE.
By order of the Boards,
/s/ Marguerite E. H. Morrison
Marguerite E. H. Morrison
SECRETARY
Dated: February 15, 2001
PROXY CARDS FOR YOUR FUND ARE ENCLOSED ALONG WITH THE PROXY STATEMENT. PLEASE
VOTE YOUR SHARES TODAY BY SIGNING AND RETURNING THE ENCLOSED 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 PROXY CARD AND FOLLOWING THE SIMPLE INSTRUCTIONS. THE BOARD OF YOUR
FUND RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES AND "FOR" EACH PROPOSAL.
PRUDENTIAL EUROPE GROWTH FUND, INC.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
PRUDENTIAL INTERNATIONAL VALUE FUND
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102
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PROXY STATEMENT
JOINT SPECIAL AND ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON MARCH 28, 2001
------------------------
This proxy statement is being furnished to holders of shares of all of the
above-listed investment companies and their series (Funds) in connection with
the solicitation by their respective Boards of proxies to be used at joint
meetings (Meetings) of shareholders to be held at Gateway Center Three, 100
Mulberry Street, 14th Floor, Newark, New Jersey 07102 on March 28, 2001, at
10:00 a.m., or any adjournment or adjournments thereof. For each of Prudential
Europe Growth Fund, Inc., Prudential Pacific Growth Fund, Inc. and Prudential
World Fund, Inc., the Meeting will be an annual meeting. For Prudential Real
Estate Securities Fund, the Meeting will be a special meeting. This proxy
statement is being first mailed to shareholders on or about February 15, 2001.
Each Fund is an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the 1940 Act). Each of Prudential
Europe Growth Fund, Inc., Prudential Pacific Growth Fund, Inc. and Prudential
World Fund, Inc. is organized as a Maryland corporation. Prudential Real Estate
Securities Fund is organized as a Delaware business trust. The shares of common
stock of each of Prudential Europe Growth Fund, Inc., Prudential Pacific Growth
Fund, Inc. and Prudential World Fund, Inc., and the shares of beneficial
interest of Prudential Real Estate Securities Fund are referred to as "Shares,"
the holders of the Shares are "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 (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 APPLICABLE
FUND NAME NAME TO FUND
- --------- ---------------------- ----------------------------------
Prudential Europe Growth Fund, Inc....... Europe Growth 1, 2, 6, 7, 8, 9
Prudential Pacific Growth Fund, Inc...... Pacific Growth 1, 3, 6, 7, 8, 9
Prudential Real Estate Securities Fund... Real Estate 1, 6, 7, 8, 9
Prudential Global Growth Fund
(a series of Prudential World Fund,
Inc. (World Fund))..................... Global Growth 1, 4, 6, 7, 8, 9
Prudential International Value Fund (a
series of World Fund).................. International Value 1, 5, 6, 7, 8, 9
Prudential Jennison International Growth
Fund
(a series of World Fund)............... Jennison International 1, 6, 7, 8, 9
Prudential Investments Fund Management LLC (PIFM or the Manager), Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102, serves as the
Funds' Manager under a management
agreement with each Fund (the Management Agreement). Investment advisory
services have been provided to the Funds by PIFM through its affiliates, The
Prudential Investment Corporation (PIC), Prudential Plaza, 751 Broad Street,
Newark, New Jersey 07102, and Jennison Associates LLC (Jennison), 466 Lexington
Avenue, New York, New York 10017, and also through Mercator Asset Management,
L.P. (Mercator), 2400 East Commercial Boulevard, Suite 810, Fort Lauderdale,
Florida 33308. Jennison serves as subadviser to the Europe Growth, Pacific
Growth, Global Growth and Jennison International Funds, PIC serves as subadviser
to the Real Estate Fund, and Mercator serves as subadviser to the International
Value Fund.
PIFM, PIC and Jennison are subsidiaries of The Prudential Insurance Company
of America (Prudential) and are part of Prudential Asset Management Holding
Company. Prudential Investment Management Services LLC (PIMS or the
Distributor), Gateway Center Three, 100 Mulberry Street, Newark, New Jersey
07102, serves as the distributor of the Funds' shares. The Funds' transfer agent
is Prudential Mutual Fund Services LLC (PMFS), 194 Wood Avenue South, Iselin,
New Jersey 08830. As of December 31, 2000, PIFM served as the manager to 40
open-end investment companies and as manager or administrator to 21 closed-end
investment companies with aggregate assets of approximately $76 billion. Each
Fund has a Board of Directors or Trustees which, in addition to overseeing the
actions of the Fund's Manager and Subadviser, decides upon matters of general
policy.
VOTING INFORMATION
In the case of all of the Funds except Real Estate, the presence, in person
or by proxy, of a majority of the Shares of a Fund outstanding and entitled to
vote will constitute a quorum for the transaction of business at the Meeting of
that Fund. With respect to Real Estate, the presence, in person or by proxy, of
40% of the Shares of the Fund outstanding and entitled to vote will constitute a
quorum.
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 Proposals 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 Proposal in favor of the adjournment and will
vote those proxies required to be voted AGAINST any Proposal against the
adjournment. A shareholder vote may be taken on one or more of the Proposals 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 No. 1 and 9, for which the required vote is a plurality or majority
of the votes cast, but effectively will be a vote against adjournment and
against the other Proposals, which require approval of a majority of the
outstanding voting securities under the 1940 Act.
The individuals named as proxies on the enclosed proxy cards will vote in
accordance with your direction as indicated thereon if your 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
2
will be voted FOR the nominees named herein for the Board of the Fund to which
the proxy card relates and FOR the remaining Proposals 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 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.
The close of business on January 19, 2001 has been fixed as the record date
for the determination of shareholders 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:
FUND CLASS A CLASS B CLASS C CLASS Z TOTAL
- ---- ------------ ----------- ----------- ----------- -----------
Europe Growth................. 4,824,633 8,848,122 838,041 771,967 15,282,763
Pacific Growth................ 4,028,473 4,264,033 429,004 357,306 9,078,816
Real Estate................... 1,845,070 3,366,241 566,030 123,804 5,901,145
Global Growth................. 22,608,462 15,583,619 1,239,088 3,543,061 42,974,230
International Value........... 3,119,926 3,908,610 768,991 18,875,921 26,673,448
Jennison International........ 8,231,386 15,348,864 7,381,553 2,388,827 33,350,630
None of the Proposals require separate voting by class. Each Share 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 the Fund as of January 19, 2001. A listing of persons who
owned beneficially 5% or more of the Shares of a Fund as of January 19, 2001 is
contained in Exhibit A.
COPIES OF EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS OF A FUND MAY OBTAIN WITHOUT CHARGE ADDITIONAL COPIES OF THE FUND'S
ANNUAL AND SEMI-ANNUAL REPORTS BY WRITING THE FUND AT GATEWAY CENTER THREE, 100
MULBERRY STREET, 4TH FLOOR, NEWARK, NEW 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 shareholders of
that Fund. Information about the vote necessary with respect to each Proposal is
discussed below in connection with the Proposal.
Shareholders voting via the Internet should understand that there may be
costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies that must be borne by the shareholder.
We have been advised that Internet voting procedures that have been made
available to you are consistent with the requirements of law.
TO ELECT DIRECTORS OR TRUSTEES
PROPOSAL NO. 1
THIS PROPOSAL APPLIES TO EACH FUND.
DISCUSSION. The Board of each Fund has nominated the 9 individuals
identified below for election to each Fund's Board. Under Proposal No. 1,
shareholders of all Funds are being asked to vote on these nominees. Pertinent
information about each nominee is set forth in the listing below and in
Exhibits B through E hereto. Each of the nominees has indicated a willingness to
serve if elected. With respect to all of the Funds except Real Estate, all of
the nominees are currently Directors, and all of the Directors have previously
been elected by shareholders, except for Ms. Rice and Mr. Odenath. With respect
to Real Estate, only Ms. Gold, Mr. Gunia, Ms. Smith and Mr. Whitehead have
previously been elected by shareholders. If elected, all nominees will hold
office until the earlier to occur of (a) the next meeting of shareholders at
which Board Members are elected and until their successors are elected and
qualified or (b) until their terms
3
expire in accordance with the Fund's retirement policy. Each Fund's retirement
policy generally calls for the retirement of Directors on December 31 of the
year in which they reach the age of 75.
Currently, each Board Member who is not affiliated with the Manager, a
Subadviser or the Distributor (an Independent Board Member or Independent
Directors, as applicable) is paid annual fees as set forth below for his or her
service on the Board of each Fund. Directors' fees are allocated among all of
the Funds in a "cluster" based on their proportionate net assets. In addition,
an Independent Board Member who serves on the Executive Committee is paid by the
Funds in the cluster an annual aggregate fee of $8,000 and an Independent Board
Member who chairs the Audit or Nominating Committee is paid by those Funds an
annual aggregate fee of $2,000 per Committee. Board Members affiliated with PIFM
or its 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. Board fees are reviewed periodically
by each Fund's Board.
The following table sets forth information relating to the compensation paid
to Board Members (i) specifically by each Fund during the Fund's last fiscal
year and (ii) in the aggregate for all funds in the Prudential Mutual Fund
Complex for the calendar year ended December 31, 2000:
COMPENSATION TABLE
TOTAL 2000
COMPENSATION
PAID TO BOARD
MEMBERS FROM
BOARD MEMBERS AND EUROPE PACIFIC REAL WORLD FUNDS AND FUND
NOMINEES GROWTH GROWTH ESTATE FUND COMPLEX (2)
- ----------------- -------- -------- -------- -------- ------------------------
Fenster, Saul K............................................ $ -- $ -- $ 425 $ -- $ 91,700(27/82)+
Gold, Delayne D............................................ $2,275 $1,550 $1,375 $4,700 $ 173,000(38/58)+
Gunia, Robert E.(1)........................................ $ -- $ -- $ -- $ -- $ --
LaBlanc, Robert E.......................................... $2,775 $1,550 $ -- $4,700 $ 110,000(22/41)+
McCorkindale, Douglas H.................................... $ -- $ -- $1,275 $ -- $ 110,000(21/42)+
McDonald, Jr. W. Scott..................................... $ -- $ -- $ 400 $ -- $ 91,700(27/82)+
Mooney, Thomas T........................................... $ -- $ -- $1,275 $ -- $ 173,000(32/65)+
Munn, Stephen P............................................ $ -- $ -- $1,375 $ -- $ 114,000(24/41)+
Odenath, Jr., David R.(1).................................. $ -- $ -- $ -- $ -- $ --
Redeker, Richard A......................................... $ -- $ -- $1,275 $ -- $ 110,000(24/41)+
Rice, Judy A.(1)........................................... $ -- $ -- $ -- $ -- $ --
Smith, Robin B.(3)......................................... $2,775 $1,625 $1,375 $5,025 $ 114,000(27/35)+
Stoneburn, Stephen......................................... $2,775 $1,550 $ -- $4,700 $ 110,000(22/41)+
Teeters, Nancy H........................................... $2,800 $1,725 $ -- $5,425 $ 118,000(25/40)+
Weil, Louis A., III........................................ $ -- $ -- $1,275 $ -- $ 114,000(24/41)+
Whitehead, Clay T.......................................... $ 150 $1,550 $1,425 $4,700 $ 173,000(35/59)+
- ------------------------------
+ Indicates number of funds/portfolios in Fund Complex (including the Funds)
to which aggregate compensation relates.
(1) Robert F. Gunia, David R. Odenath, Jr. and Judy A. Rice, who are
"interested" Board Members, do not receive compensation from the Funds or
Fund Complex. All other Board Members listed above are deemed to be
independent Board Members.
(2) No fund within the Fund Complex has a bonus, pension, profit sharing or
retirement plan.
(3) Total compensation from all of the funds in the Fund Complex for the
calendar year ended December 31, 2000, includes amounts deferred at the
election of Directors under the funds' deferred compensation plans.
Including accrued interest, total compensation amounted to approximately
$124,810, $179,810 and $106,992 for Messrs. McCorkindale, Mooney and Ms.
Smith, respectively.
Board Members may elect to receive their fees pursuant to a deferred fee
agreement with each Fund. Under the terms of the agreement, the Fund accrues
daily the amount of the Board Member's fee in installments that 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 Fund Complex regardless of whether the Director
serves on the Board of that fund. Payment of the accrued interest also is
deferred and accruals become payable at the option of the Board Member. A Fund's
obligation to make payments of deferred Directors' fees, together with interest
thereon, is a general obligation of the Fund.
4
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 current
Board Members is set forth in Exhibits B through E. A table indicating each
Director's ownership of Fund Shares is attached as Exhibit C.
NOMINEE (AGE) PRINCIPAL OCCUPATION*
- ------------- ----------------------------------------------------------
Delayne D. Gold (62)............ Marketing Consultant.
Robert F. Gunia** (54).......... Executive Vice President and Chief Administrative Officer
(since June 1999) of Prudential Investments; Executive
Vice President and Treasurer (since December 1996) of
PIFM; President (since April 1999) of PIMS; Corporate Vice
President (since September 1997) of Prudential; formerly
Senior Vice President (March 1987-May 1999) of Prudential
Securities; formerly Chief Administrative Officer (July
1989-September 1996), Director (January 1989-September
1996) and Executive Vice President, Treasurer and Chief
Financial Officer (June 1987-December 1996) of Prudential
Mutual Fund Management, Inc.; Vice President and Director
(since May 1989) of the Asia Pacific Fund, Inc.
Robert E. LaBlanc (66).......... President (since 1981) of Robert E. LaBlanc Associates,
Inc. (telecommunications); formerly General Partner at
Salomon Brothers and Vice Chairman of Continental Telecom;
Director of Storage Technology Corporation (since 1979),
Titan Corporation (since 1995), Salient 3 Communications,
Inc., Chartered Semi-Conductor Manufacturing Ltd. (since
1998) and Tribune Company (since 1981); Trustee of
Manhattan College.
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.
Judy A. Rice**(53).............. 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 for
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.
5
NOMINEE (AGE) PRINCIPAL OCCUPATION*
- ------------- ----------------------------------------------------------
Stephen Stoneburn (57).......... President and Chief Executive Officer (since June 1996) of
Quadrant Media Corp. (a publishing company); formerly
President (June 1995-June 1996) of Argus Integrated Media,
Inc.; Senior Vice President and Managing Director (January
1993-1995), Cowles Business Media and Senior Vice
President of Fairchild Publications, Inc. (1975-1989).
Nancy H. Teeters (70)........... Economist; formerly, Vice President and Chief Economist of
International Business Machines Corporation; formerly
Director of Inland Steel Industries (July 1989-1999);
formerly, Governor of Federal Reserve System (1978-1984).
Clay T. Whitehead (62).......... President of National Exchange Inc. (new business
development firm).
- ------------------------
* Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.
** Is an "interested" Director, as defined in the 1940 Act, by reason of his or
her affiliation with PIFM, Prudential Securities or Prudential.
Each Fund has a Nominating Committee and an Audit Committee, the members of
which are the Independent Board Members. Among other things, the Audit Committee
has the following responsibilities:
- Advising the Board with respect to the selection, retention or
termination, as appropriate, of the independent public accountants for the
Fund.
- Reviewing the independent public accountants' compensation and the
proposed terms of their engagement.
- Monitoring the independence of the independent public accountants.
- Reviewing annual financial 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 shareholders 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; and
-expense reimbursement.
Information about the number of Board and Committee meetings held during the
most recent fiscal year for each Fund is included in Exhibit D. Information
concerning Fund officers is set forth in Exhibit E.
6
REQUIRED VOTE
The nominees receiving the affirmative vote of a majority (for the Real
Estate Fund) and a plurality (for each of the Europe Growth, Pacific Growth and
World Funds) of the votes cast will be elected, provided a quorum is present.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL NO. 1.
TO APPROVE A NEW SUBADVISORY AGREEMENT BETWEEN PIFM AND GARTMORE GLOBAL PARTNERS
PROPOSAL NO. 2
THIS PROPOSAL APPLIES TO THE EUROPE GROWTH FUND ONLY.
The Board of the Europe Growth Fund, including the Independent Directors,
has approved, and recommends that shareholders approve, the adoption of a
subadvisory agreement between PIFM and Gartmore Global Partners (Gartmore) under
which Gartmore would serve as subadviser to the Fund. The proposed subadvisory
contract with Gartmore in substantially final form is attached as Exhibit F-1.
PIFM had entered into a subadvisory agreement with PIC for the Europe Growth
Fund. The subadvisory agreement provided that PIC would furnish investment
advisory services in connection with the management of the Fund. In connection
with those services, PIC was obligated to keep certain books and records of the
Fund. Pursuant to PIFM's Management Agreement with the Fund, PIFM continued to
have responsibility for all investment advisory services.
The Europe Growth Fund's subadvisory agreement provided that PIC would 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. The subadvisory agreement also provided that it would
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. The
subadvisory agreement could be terminated by the Fund, PIFM or PIC on not more
than 60 days, nor less than 30 days, written notice. The subadvisory agreement
with PIC terminated at the time PIFM entered into an interim subadvisory
agreement with Jennison. With the exception of its date, the identity of the
subadviser and the requirement that fees paid thereunder be paid into escrow, as
described above, the interim subadvisory agreement with Jennison is
substantially similar to the subadvisory agreement between PIC and PIFM.
The table below lists the compensation paid to PIC by PIFM under its
subadvisory agreement for the subadvisory services performed for the Europe
Growth Fund, as well as the date of the subadvisory agreement with PIC, and the
date on which the 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)
- ---- ----------- ------------ -----------------------
Europe Growth.................................... 7/11/94 7/7/94 0.375%
- ------------------------
(1) The subadvisory agreement was amended effective January 1, 2000 to provide
for the payment of compensation by PIFM to PIC based on a percentage of the
average daily net assets of the Europe Growth 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 Europe Growth
Fund.
7
The table below sets forth the total fees paid by the Fund to PIFM and the
total fees received by PIC from PIFM for subadvisory services performed by PIC
for the Fund during the fiscal year ended October 31, 2000:
FEE RECEIVED
FEE PAID TO BY PIC FROM
FUND PIFM PIFM(a)
- ---- ----------- ------------
Europe Growth............................................... $2,306,681 $433,630
- ------------------------
(a) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the Europe Growth
Fund. The subadvisory agreement between PIFM and PIC 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 the Fund. The percentage
rate applicable to the Fund is set forth in the previous table. For the
Europe Growth Fund, with its fiscal year ending on April 30, 2000, the
dollar amount shown in the column "Fee Received by PIC From PIFM" consists
of the fees paid by PIFM to PIC from January 1, 2000 through April 30, 2000.
Pending shareholder approval of this new subadvisory agreement, the Board of
the Europe Growth Fund 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 Gartmore, PIFM is placing into an escrow account fees for subadvisory
services that Jennison is performing for the Fund. The rate of the subadvisory
fees being placed in escrow is the same as the rate of fees PIC received for
acting as subadviser to the Fund. The Fund's subadvisory fees will be retained
in escrow and will not be paid to Jennison, unless and until the Fund's
shareholders approve the new subadvisory agreement with Gartmore. If
shareholders do not approve the new subadvisory agreement, Jennison will be paid
the lesser of its actual costs and expenses or the fees retained in escrow.
Gartmore, located at 121 West Trade Street, Suite 3030, Charlotte, North
Carolina 28202, is a direct subsidiary of Gartmore Investment Management plc
(Gartmore Investment), the ultimate parent of which is Nationwide Mutual
Insurance Company. Nationwide Mutual is a U.S.-based mutual insurance company
and is one of the largest providers of insurance, pensions and related financial
services in the U.S. Gartmore Investment's total assets under management as of
December 31, 2000 amounted to approximately $80 billion, including $1.2 billion
managed by Gartmore. The name and principal occupation of the principal
executive officer and each director of Gartmore appear below. The address of
each individual listed below is 121 West Trade Street, Suite 3030, Charlotte,
North Carolina 28202.
NAME TITLE
- ---- -------------------------------------
Chris Russell........................ Chairman, Principal Executive
Officer, Director of Overseas
Businesses
Peter Chambers....................... Director, Chief Investment Officer of
Gartmore Investment Management plc
Stephen Watson....................... Director, Chief Investment Officer of
Gartmore Global Partners
Richard Hoag......................... Director, Executive Vice President,
Managing Director - Institutional
James Donatell....................... Director, Executive Vice President,
Managing Director - Retail
Although Gartmore manages employee pension and benefit plans, it does not
currently advise a registered mutual fund with an investment objective similar
to that which it will pursue in managing a portion of the assets of the Europe
Growth Fund.
8
The proposed subadvisory agreement, in brief, provides that:
- as compensation for Gartmore's services, PIFM will pay Gartmore a fee
equal, on an annualized basis, to the following, subject to a minimum
annual fee of $250,000:
0.60% on the first $50 million of the average daily net assets of
the Europe Growth Fund under Gartmore's management;
0.50% on the next $50 million of the average daily net assets of
the Fund under Gartmore's management;
0.40% on the next $100 million of the average daily net assets of
the Fund under Gartmore's management; and
0.30% on over $200 million of the average daily net assets of the
Fund under Gartmore's management.
- Gartmore will provide day-to-day management of the Europe Growth Fund's
investments and otherwise determine which investments the Fund will
purchase, retain, and sell.
- Gartmore will select brokers to effect trades for the Europe Growth Fund
and may pay a higher commission to a broker that provides bona fide
research services (soft dollar arrangements). Gartmore may use these soft
dollar arrangements in connection with providing subadvisory services to
one or more of its clients other than the Fund. As a result, Gartmore may
benefit from these soft dollar arrangements to the extent it uses them to
provide advisory services to its other clients. Conversely, the Fund may
benefit to the extent that Gartmore uses soft dollar arrangements that
Gartmore has established with brokers or dealers that effect securities
transactions for Gartmore's other clients.
- Gartmore will maintain certain books and records on behalf of the Europe
Growth Fund.
- PIFM may replace Gartmore as subadviser or amend the subadvisory agreement
without obtaining shareholder approval (if Proposal No. 6 is approved).
- PIFM may appoint additional subadvisers to manage the Europe Growth Fund's
assets and, consequently, may determine the allocation of the Fund's
assets among these subadvisers (if Proposal Nos. 6 and 7 are approved).
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with Gartmore to
shareholders was approved by the Board of Directors of the Europe Growth Fund,
including the Independent Directors, on November 15, 2000. The Board received
materials relating to the proposed subadvisory agreement in advance of the
meeting at which the proposed subadvisory agreement was considered, and had the
opportunity to ask questions and request further information in connection with
such consideration. The Board considered Gartmore's investment process and
proprietary research capabilities, as well as the number of analysts that
Gartmore employs. The Board gave primary consideration to Gartmore's past
investment performance, including, in particular, how that performance ranked on
a risk-adjusted basis. The Board was provided with a quantitative analysis of
the amount of risk associated with the level of return obtained by the proposed
subadviser as measured against a variety of benchmarks. In addition, the Board
considered that the rate of fees to be paid to Gartmore is consistent with --
and even lower than -- industry norms. After considering all of these factors,
the Board voted to recommend that shareholders approve the Proposal.
REQUIRED VOTE
Approval of Proposal No. 2 with respect to the Europe Growth Fund 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,
9
a majority of the 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.
THE BOARD OF THE EUROPE GROWTH FUND, INCLUDING ITS INDEPENDENT BOARD
MEMBERS, RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2.
TO APPROVE A NEW SUBADVISORY AGREEMENT BETWEEN PIFM AND JARDINE FLEMING
INTERNATIONAL MANAGEMENT INC.
PROPOSAL NO. 3
THIS PROPOSAL APPLIES TO THE PACIFIC GROWTH FUND ONLY.
The Board of the Pacific Growth Fund, including the Independent Directors,
has approved, and recommends that shareholders approve the adoption of a
subadvisory agreement between PIFM and Jardine Fleming International Management
Inc. (JFIMI), under which JFIMI would serve as subadviser to the Fund. The
proposed subadvisory agreement with JFIMI in final form is attached as
Exhibit F-2.
SUBADVISORY AGREEMENT WITH PIC
PIFM had entered into a subadvisory agreement with PIC for the Pacific
Growth Fund. The subadvisory agreement provided that PIC would furnish
investment advisory services in connection with the management of the Fund. In
connection with those services, PIC was obligated to keep certain books and
records of the Fund. Pursuant to PIFM's Management Agreement with the Fund, PIFM
continued to have responsibility for all investment advisory services.
The Pacific Growth Fund's subadvisory agreement provided that PIC would 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. The subadvisory agreement also provided that it would
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. The
subadvisory agreement could be terminated by the Fund, PIFM or PIC on not more
than 60 days', nor less than 30 days', written notice. The subadvisory agreement
with PIC terminated at the time PIFM entered into an interim subadvisory
agreement with Jennison. With the exception of its date, the identity of the
subadviser and the requirement that fees paid thereunder be paid into escrow, as
described above, the interim subadvisory agreement with Jennison is
substantially similar to the subadvisory agreement between PIC and PIFM.
The table below lists the compensation paid to PIC by PIFM under its
subadvisory agreement for the subadvisory services performed for the Global
Growth Fund, as well as the date of the subadvisory agreement with PIC, and the
date on which the 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)
- ---- ----------- ------------ -----------------------
Pacific Growth................................... 7/16/92 6/25/92 0.375%
- ------------------------
(1) The subadvisory agreement was amended effective January 1, 2000 to provide
for the payment of compensation by PIFM to PIC based on a percentage of the
average daily net assets of the Pacific Growth 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 Pacific Growth
Fund.
10
The table below sets forth the total fees paid by the Fund to PIFM and the
total fees received by PIC from PIFM for subadvisory services performed by PIC
for the Fund during the fiscal year ended October 31, 2000:
FEE RECEIVED
FEE PAID TO BY PIC FROM
FUND PIFM PIFM(a)
- ---- ----------- ------------
Pacific Growth.............................................. $1,426,965 $579,942
- ------------------------
(a) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the Pacific Growth
Fund. The subadvisory agreement between PIFM and PIC 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 the Fund. The percentage
rate applicable to the Fund is set forth in the previous table. For the
Pacific Growth Fund, with its fiscal year ending on October 31, 2000, the
dollar amount shown in the column "Fee Received by PIC From PIFM" consists
of the fees paid by PIFM to PIC from January 1, 2000 through October 31,
2000.
Pending shareholder approval of the new subadvisory agreement with JFIMI,
the Board of the Pacific Growth Fund 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 JFIMI, PIFM is placing into an escrow account fees
for subadvisory services that Jennison is performing for the Fund. The rate of
the subadvisory fees being placed in escrow is the same as the rate of fees PIC
received for acting as subadviser to the Fund. The Fund's subadvisory fees will
be retained in escrow and will not be paid to Jennison, unless and until the
Fund's shareholders approve the new subadvisory agreement with JFIMI. If
shareholders do not approve the new subadvisory agreement, Jennison will be paid
the lesser of its actual costs and expenses or the fees retained in escrow.
JFIMI is a subsidiary of Chase Fleming Asset Management (Asia) Inc. (CFAM),
which was formed following the acquisition of Robert Fleming Holdings Limited by
The Chase Manhattan Corporation (now J.P. Morgan Chase & Co.) on August 1, 2000.
As of December 31, 2000, JFIMI's total assets under the management of the Chase
Fleming group with respect to Asia amounted to approximately $36.6 billion. The
registered office in Hong Kong of JFIMI is at 46th Floor, Jardine House, 1
Connaught Place, Central Hong Kong. The name and principal occupation of the
principal executive officer and each director of Chase Fleming Asset Management
(Asia) Inc. appears below. The contact address of each individual listed below
is 270 Park Avenue, New York, NY 10017-2070.
NAME TITLE
- ---- -------------------------------------
Henry Lartigue....................... President, Chase Fleming Asset
Management (Asia) Inc.
Dina Dublon.......................... Vice President, Chase Fleming Asset
Management (Asia) Inc.
JFIMI does not currently advise a registered mutual fund with an investment
objective similar to that which it will pursue in managing a portion of the
assets of Pacific Growth.
The proposed subadvisory agreement, in brief, provides that:
- as compensation for JFIMI's services, PIFM will pay JFIMI a fee equal, on
an annualized basis, to the following:
0.50% of the first $250 million of the average daily net assets of
the Pacific Growth Fund managed by JFAM; and
0.45% of the Fund's average daily net assets managed by JFAM over
$250 million.
11
The investment advisory fee is based on aggregate assets under management of
Prumerica Pacific Growth Fund and the Pacific Growth Fund.
- JFIMI will provide day-to-day management of the Pacific Growth Fund's
investments and otherwise determine what investments the Fund will
purchase, retain, and sell.
- JFIMI will select brokers to effect trades for the Pacific Growth Fund and
may enter into soft dollar arrangements. JFIMI may use these soft dollar
arrangements in connection with providing subadvisory services to its
clients other than the Fund. As a result, JFIMI may benefit from these
soft dollar arrangements to the extent it uses them to provide advisory
services to its other clients. Conversely, the Fund may benefit to the
extent that JFIMI uses soft dollar arrangements that JFIMI has established
with brokers or dealers that effect securities transactions for JFIMI's
other clients.
- JFIMI will maintain certain books and records on behalf of the Pacific
Growth Fund.
- PIFM may replace JFIMI as subadviser or amend the subadvisory agreement
without obtaining shareholder approval (if Proposal No. 6 is approved).
- PIFM may appoint additional subadvisers to manage the Pacific Growth
Fund's assets and, consequently, may determine the allocation of the
Fund's assets among these subadvisers (if Proposals Nos. 6 and 7 are
approved).
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with JFIMI to
shareholders was approved by the Board of Directors of the Pacific Growth Fund,
including the Independent Directors, on November 15, 2000. The Board received
materials relating to the proposed subadvisory agreement in advance of the
meeting at which the proposed subadvisory agreement was considered, and had the
opportunity to ask questions and request further information in connection with
such consideration. The Board considered CFAM's brand recognition in
international asset management, CFAM's strong regional presence, the stability
and continuity of CFAM as well as CFAM's investment process for country
allocation and stock selection. In particular, the Board gave primary
consideration to JFIMI's past investment performance, including particularly how
its performance ranked on a risk-adjusted basis. The Board was provided with a
quantitative analysis of the amount of risk associated with the level of return
obtained by the proposed subadviser as measured against a variety of benchmarks.
In addition, the Board considered that the rate of fees to be paid to JFIMI is
consistent with--and even lower than--industry norms. After considering all of
these factors, the Board voted to recommend that shareholders approve the
proposal.
REQUIRED VOTE
Approval of this Proposal requires the affirmative vote of a majority of the
Pacific Growth Fund's outstanding voting securities, as defined in the 1940 Act.
THE BOARD OF PACIFIC GROWTH FUND, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 3.
12
TO APPROVE A NEW SUBADVISORY AGREEMENT BETWEEN PIFM AND JENNISON
PROPOSAL NO. 4
THIS PROPOSAL APPLIES TO THE GLOBAL GROWTH FUND ONLY.
BACKGROUND
The Board of the Fund, including the Independent Directors, has approved,
and recommends that the shareholders of the Fund approve, the adoption of a
subadvisory agreement between PIFM and Jennison. Subadvisory services for this
Fund have historically been performed by PIC. 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, the Global Growth Fund's shareholders are being
asked to approve a new subadvisory agreement between PIFM and Jennison. This
transition occurred incrementally and the majority of the equity funds in the
Prudential mutual fund complex that had been subadvised by PIC began to be
subadvised by Jennison on or about October 31, 2000. Jennison began serving as
subadviser for the Global Growth Fund on October 2, 2000.
The combining of subadvisory duties for equity management into Jennison is
intended to provide your Fund with the investment capabilities available from
Jennison. More information about Jennison's history and its management team
appears on pages 14 and 15 of this proxy statement.
The transition of subadvisory services from PIC to Jennison may constitute
an "assignment" (as that term is defined in the 1940 Act) of the 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 are being asked to approve the proposed new
subadvisory agreement between PIFM and Jennison in order for Jennison to
continue to provide subadvisory services to the Global Growth Fund. A copy of
the new form of subadvisory agreement with Jennison for the Fund is attached as
Exhibit F-3. THE NEW SUBADVISORY AGREEMENT WITH JENNISON FOR THE 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).
Pending shareholder approval of this new subadvisory agreement, the Global
Growth 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 the Fund. The rate of the subadvisory fees being
placed in escrow is the same as the rate of fees PIC received for acting as
subadviser to the Fund. The Fund's subadvisory fees will be retained in escrow
and will not be paid to Jennison, unless and until the Fund's shareholders
approve the new subadvisory agreement with Jennison. If shareholders do not
approve this proposal, then Jennison will receive the lesser of its costs and
expenses or the fees retained in escrow.
Because the move from PIC to Jennison was made pursuant to a corporate
restructuring within Prudential, 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
No. 8(a) through 8(g) of this proxy statement).
SUBADVISORY AGREEMENT WITH PIC
PIFM had entered into a subadvisory agreement with PIC for the Global Growth
Fund. The subadvisory agreement provided that PIC would furnish investment
advisory services in connection with
13
the management of the Fund. In connection with those services, PIC was obligated
to keep certain books and records of the Fund. Pursuant to PIFM's Management
Agreement with the Fund, PIFM continued to have responsibility for all
investment advisory services.
The Global Growth Fund's subadvisory agreement provided that PIC would 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. The subadvisory agreement also provided that PIC would
select brokers to effect trades for the Fund and may enter into soft dollar
arrangements. PIC may have used these soft dollar arrangements in connection
with providing subadvisory services to its clients other than the Fund. As a
result, PIC could have benefited from these soft dollar arrangements to the
extent it used them to provide advisory services to its other clients.
Conversely, the Fund could have benefited to the extent that PIC used soft
dollar arrangements that PIC had established with brokers or dealers that
effected securities transactions for PIC's other clients. The subadvisory
agreement also provided that it would 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. The subadvisory agreement could be terminated by the
Fund, PIFM or PIC on not more than 60 days', nor less than 30 days', written
notice. The subadvisory agreement with PIC terminated at the time PIFM entered
into an interim subadvisory agreement with Jennison. With the exception of its
date, the identity of the subadviser and the requirement that fees paid
thereunder be paid into escrow, as described above, the interim subadvisory
agreement with Jennison is substantially similar to the subadvisory agreement
between PIC and PIFM.
The table below lists the compensation paid to PIC by PIFM under its
subadvisory agreement for the subadvisory services performed for the Global
Growth Fund, as well as the date of the subadvisory agreement with PIC, and the
date on which the 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)
- ---- ----------- ------------ -----------------------
Global Growth.................................... 2/28/88 2/25/88 0.375%
- ------------------------
(1) The subadvisory agreement was amended effective January 1, 2000 to provide
for the payment of compensation by PIFM to PIC based on a percentage of the
average daily net assets of the Global Growth 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 Global Growth
Fund.
The table below sets forth the total fees paid by the Fund to PIFM and the
total fees received by PIC from PIFM for subadvisory services performed by PIC
for the Fund during the fiscal year ended October 31, 2000:
FEE RECEIVED
FEE PAID TO BY PIC FROM
FUND PIFM PIFM(a)
- ---- ----------- ------------
Global Growth............................................... $6,502,580 $2,757,718
- ------------------------
(a) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the Global Growth
Fund. The subadvisory agreement between PIFM and PIC 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 the Fund. The percentage
rate applicable to the Fund is set forth in the previous table. For the
Global Growth Fund, with its fiscal year ending on October 31, 2000, the
dollar amount shown in the column "Fee Received by PIC From PIFM" consists
of the fees paid by PIFM to PIC from January 1, 2000 through October 31,
2000.
14
The table below lists the equity mutual funds with capital appreciation as
their investment objective that are advised by Jennison as of December 31, 2000,
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 12/31/00 ASSETS)
- ---- -------------- ------------------------
Prudential 20/20 Focus Fund(a)...................... $ 439,449,237 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Equity Fund, Inc.(a)..................... $3,849,787,326 0.25% to $500 mil.
0.226% next $500 mil.
0.203% over $1 bil.
Prudential Diversified Funds -- Prudential
Diversified Conservative Growth (Growth
Segment)(b)....................................... $ 11,356,067 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Diversified Funds -- Prudential
Diversified Moderate Growth (Growth Segment)(b)... $ 38,311,177 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Diversified Funds -- Prudential
Diversified High Growth (Growth Segment)(b)....... $ 37,204,586 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Jennison Equity Opportunity Fund......... $ 269,152,769 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Jennison Growth Fund..................... $6,016,711,832 0.30% to $300 mil.
0.25% over $300 mil.
Prudential Financial Services Fund (Strategically
Managed Segment)(a)(,)(b)......................... 0.375%
Prudential Technology Fund (Strategically Managed
Segment)(a)(,)(b)................................. 0.375%
Prudential Utility Fund(a).......................... 0.30% 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.(a).............. 0.455%
Prudential Health Sciences Fund (Strategically
Managed Segment)(b)............................... $ 252,464,363 0.30% to $300 mil.
0.25% over $300 mil.
Strategic Partners Series -- Strategic Partners
Focused Growth Fund (Jennison Segment)(b)......... $ 162,667,152 0.30% to $300 mil.
0.25% over $300 mil.
Prudential U.S. Emerging Growth Fund, Inc........... 0.30% to $1 bil.
0.261% over $1 bil.
Prudential Value Fund(a)............................ $1,412,444,165 0.30% to $500 mil.
0.238% next $500 mil.
0.214% next $500 mil.
0.191% over $1.5 bil.
15
FUND NET FEE PAID TO JENNISON
ASSETS AS OF (% OF AVERAGE DAILY NET
FUND 12/31/00 ASSETS)
- ---- -------------- ------------------------
Prudential World Fund, Inc. -- Prudential Jennison
International Growth Fund......................... $ 241,714,400 0.60% to $300 mil.
0.50% next $1.2 bil.
0.45% over $1.5 bil.
Harbor Fund -- Harbor Capital Appreciation Fund..... $7,792,437,760 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.................. $1,088,508,766 0.50% of first $1.5 bil.
0.45% next $2 bil.
0.40% over $3.5 bil.
Masters' Select Funds Trust --
The Masters Select Equity Fund(b)................. $ 81,943,692 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(b)... $ 6,832,580 0.40%
SunAmerica Style Select Series, Inc. -- Focus
Portfolio(b)...................................... $ 492,788,573 0.40%
SunAmerica Style Select Series, Inc. --
Large-Cap Growth Portfolio(b)..................... $ 36,011,249 0.30% to $300 mil.
0.25% over $300 mil.
The Hirtle Callaghan Trust --
The Growth Equity Portfolio(b).................... $ 145,822,978 0.30%
The Preferred Group of Mutual Funds --
Preferred Growth Fund............................. $ 687,222,349 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(b)....... $ 197,953,699 0.35%
Ohio National Funds -- Capital Appreciation
Portfolio......................................... $ 73,969,921 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.
- ------------------------
(a) Jennison did not begin acting as subadviser for Prudential Equity Fund,
Inc. and Prudential Value Fund until September 7, 2000. Jennison did not
begin acting as subadviser for the value segment of Prudential 20/20 Focus
Fund until September 7, 2000. Jennison did not begin acting as subadviser
for the strategically managed segments of Prudential Financial Services Fund
and Prudential Technology Fund until August 24, 2000. Jennison did not begin
acting as subadviser to Prudential Utility Fund
16
until September 18, 2000. Jennison did not begin acting as subadviser to
Prudential Small Company Fund, Inc. and Prudential U.S. Emerging Growth
Fund, Inc. until August 24, 2000.
(b) 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.
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 agreement, Jennison would provide investment
advisory services to the Global Growth Fund pursuant to an agreement with PIFM.
The agreement between PIFM and Jennison will be identical in all material
respects (other than as indicated on page 11) to the subadvisory agreement
between PIFM and PIC. This means that Jennison will be subject to the same terms
and conditions as are applicable to PIC under its former subadvisory agreement
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.
17
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. 6 AND 7
As part of the overall restructuring of the management of the Funds covered
by this Proxy Statement, Proposals No. 6 and 7 request shareholder approval
(1) to permit the Manager to enter into or make material changes to subadvisory
agreements, and (2) to amend the management contracts between PIFM and each
Fund. In brief, Proposal No. 6, 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. 7, 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. 6 and 7 for more information on each of these Proposals.
Although shareholder approval is also being requested for Proposals No. 6
and 7, THE ADOPTION OF PROPOSAL NO. 4 IS NOT CONTINGENT ON SHAREHOLDER APPROVAL
OF EITHER PROPOSAL NO. 6 OR PROPOSAL NO. 7. This means that if shareholders do
not approve either Proposal No. 6 or Proposal No. 7, but do vote "For" Proposal
No. 4, PIFM will implement the new subadvisory agreement with Jennison. If
Proposal No. 4 is not approved, Jennison will receive the lesser of the
subadvisory fees paid into escrow under the interim subadvisory agreement, plus
interest, or the costs incurred by Jennison in performing the interim contract,
plus interest.
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed new subadvisory agreement with Jennison
was approved by the Board of the Global Growth Fund, including the Independent
Directors, on August 22, 2000. The Board Members received materials relating to
the proposed agreement in advance of the meeting at which the proposed
subadvisory agreement was considered, and had the opportunity to ask questions
and request further information in connection with such consideration. In
particular, the Board considered that the rate of fees to be paid to Jennison by
PIFM are the same as the then-existing fee arrangement with PIC, and that the
rate of fees paid by the Fund would not increase. The Board also considered that
it is appropriate to enter into a new subadvisory agreement for this Fund in
light of the transition of the majority of equity management from PIC to
Jennison. The Board gave primary consideration to Jennison's strong, stable
management and the results of Jennison's growth investing style when the Board
determined to approve the new subadvisory agreement with Jennison. After
considering all of these factors, the Board voted to recommend that shareholders
approve the proposal.
REQUIRED VOTE
Approval of this Proposal requires the affirmative vote of a majority of the
Global Growth Fund's outstanding voting securities, as defined by the 1940 Act.
THE BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU VOTE
"FOR" PROPOSAL NO. 4.
18
TO APPROVE A NEW SUBADVISORY AGREEMENT BETWEEN PIFM AND BANK OF IRELAND ASSET
MANAGEMENT (U.S.) LIMITED
PROPOSAL NO. 5
THIS PROPOSAL APPLIES TO THE INTERNATIONAL VALUE FUND ONLY.
The Board of the International Value Fund, including the Independent
Directors, has approved, and recommends that shareholders approve, the adoption
of a subadvisory agreement between PIFM and Bank of Ireland Asset Management
(U.S.) Limited (BIAM (U.S.) Limited), under which BIAM (U.S.) Limited would
serve as subadviser to the Fund. The proposed subadvisory agreement with BIAM
(U.S.) Limited in substantially final form is attached as Exhibit F-4.
The International Value Fund is currently subadvised by Mercator pursuant to
a subadvisory agreement between PIFM and Mercator dated as of September 18,
1996. For the fiscal year ended October 31, 2000, PIFM paid Mercator $3,116,274
for providing subadvisory services to the Fund. The Fund's shareholders last
approved the subadvisory agreement between PIFM and Mercator on September 17,
1996.
With respect to International Value Fund, PIFM has entered into a
Subadvisory Agreement (the Subadvisory Agreement) with Mercator. The Subadvisory
Agreement with Mercator provides that PIFM compensates Mercator for its services
at an annual rate of .75% of International Value Fund's average daily net assets
up to and including $50 million, .60% of International Value Fund's average
daily net assets in excess of $50 million up to and including $300 million and
.45% of International Value Fund's average daily net assets in excess of
$300 million.
The Subadvisory Agreement provides that Mercator will furnish investment
advisory services in connection with the management of the International Value
Fund. In connection therewith, Mercator is obligated to keep certain books and
records of the International Value Fund. PIFM continues to have responsibility
for all investment advisory services pursuant to the Management Agreement and
supervises Mercator's performance of such services.
BIAM (U.S.) Limited, located at 75 Holly Hill Lane, Greenwich, Connecticut
06830, is a wholly-owned subsidiary of the Bank of Ireland Group, which was
established in 1783 and is one of the largest providers of financial services in
Ireland. BIAM (U.S.) Limited was established in 1987 to provide services to
North American investors. As of December 31, 2000, BIAM (U.S.) Limited had
approximately $25 billion under management on behalf of its U.S. and Canadian
clients. The name and principal occupation of the principal executive officer
and each director of BIAM (U.S.) Limited appear below. The address of each
individual listed below is 75 Holly Hill Lane, Greenwich, Connecticut 06830.
NAME TITLE
- ---- -------------------------------------
William R. Cottler................... Chief Executive Officer
Denis Curran......................... President, International
Chris Reilly......................... Chief Investment Officer
BIAM (U.S.) Limited subadvises an institutional commingled separate account
that has investment objectives similar to the International Value Fund. For
providing advisory services to this account, BIAM (U.S.) Limited receives an
annual fee at the annual rate of 0.45% of the first $50 million of that
account's daily net assets, 0.40% on the next $50 million of that account's
average daily net assets and 0.30% of that fund's average daily net assets over
$100 million. As of December 31, 2000, the net assets of that account amounted
to approximately $1.36 billion.
The proposed subadvisory agreement, in brief, provides that:
- as compensation for BIAM (U.S.) Limited's services, PIFM will pay to BIAM
(U.S.) Limited a fee equal, on an annualized basis, to the following:
19
0.45% on the first $50 million of the average daily net assets of
the International Value Fund managed by BIAM (U.S.) Limited;
0.40% on the next $50 million of the Fund's net assets managed by
BIAM (U.S.) Limited;
0.30% on the next $500 million of the Fund's net assets managed by
BIAM (U.S.) Limited;
0.28% on the next $200 million of the Fund's net assets managed by
BIAM (U.S.) Limited; and
0.27% on the Fund's net assets over $800 million managed by BIAM
(U.S.) Limited.
For purposes of computing the fees set out above, PIFM and BIAM
(U.S.) Limited may aggregate the assets of other Prudential mutual
fund portfolios that BIAM (U.S.) Limited may subadvise in the
future with the International Value Fund by amending the
subadvisory agreement.
- BIAM (U.S.) Limited will provide day-to-day management of the
International Value Fund's investments and otherwise determine which
investments the Fund will purchase, retain, and sell.
- BIAM (U.S.) Limited will select brokers to effect trades for the
International Value Fund and may enter into soft dollar arrangements. BIAM
(U.S.) Limited may use these soft dollar arrangements in connection with
providing subadvisory services to its other clients and not the Fund. As a
result, BIAM (U.S.) Limited may benefit from these soft dollar
arrangements to the extent it uses them to provide advisory services to
its other clients. Conversely, the Fund may benefit to the extent that
BIAM (U.S.) Limited uses soft dollar arrangements that BIAM (U.S.) Limited
has established with brokers or dealers that effect securities
transactions for BIAM (U.S.) Limited's other clients.
- BIAM (U.S.) Limited will maintain certain books and records on behalf of
the International Value Fund.
- PIFM may replace BIAM (U.S.) Limited as subadviser or amend the
subadvisory agreement without obtaining shareholder approval (if Proposal
No. 6 is approved).
- PIFM may appoint additional subadvisers to manage the International Value
Fund's assets and, consequently, may determine the allocation of the
Fund's assets among these subadvisers (if Proposal Nos. 6 and 7 are
approved.)
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with BIAM (U.S.)
Limited to shareholders was approved by the Board of the International Value
Fund, including the Independent Directors, on November 15, 2000. The Board
received materials relating to the proposed subadvisory agreement in advance of
the meeting at which the proposed subadvisory agreement was considered, and had
the opportunity to ask questions and request further information in connection
with such consideration. The Board considered the BIAM (U.S.) Limited team
approach, its track record and experience, its corporate stability and the level
of service that it provides. In particular, the Board gave primary consideration
to BIAM (U.S.) Limited's past investment performance, including particularly how
that performance ranked on a risk-adjusted basis. The Board was provided with a
quantitative analysis of the amount of risk associated with the level of return
obtained by the proposed subadviser as measured against a variety of benchmarks.
In addition, the Board considered that the rate of fees to be paid to BIAM
(U.S.) Limited is consistent with industry norms. After considering all of these
factors, the Board voted to recommend that the shareholders approve the
Proposal.
20
REQUIRED VOTE
Approval of this Proposal requires the affirmative vote of a majority of the
International Value Fund's outstanding voting securities, as defined in the 1940
Act.
THE BOARD OF THE INTERNATIONAL VALUE FUND, INCLUDING ITS INDEPENDENT BOARD
MEMBERS, RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 5.
INTEREST OF FUND DIRECTORS AND OFFICERS IN PROPOSALS NO. 2, 3 AND 5.
With respect to the current Fund Directors and the officers of the Funds
(collectively, Directors/ Officers), none of such individuals currently holds an
office with, or is employed by, either Gartmore, JFAM or BIAM (U.S.) Limited,
nor does any such Director/Officer own more than 1,000 shares of any such
subadviser or its affiliates (as defined by SEC proxy rules).
TO APPROVE A PROPOSAL TO PERMIT THE MANAGER TO ENTER INTO, OR MAKE MATERIAL
CHANGES TO, SUBADVISORY AGREEMENTS
PROPOSAL NO. 6
THIS PROPOSAL APPLIES TO ALL FUNDS.
The Board of each Fund has approved, and recommends that shareholders
approve, Proposal No. 6, 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 agreement, is contained in Proposals No. 2-5. If shareholders
approve Proposal No. 6 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. 6 at an in-person meeting.
Proposal No. 6 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,
21
subject to approval by the SEC of such arrangement. The Funds will, of course,
comply with any conditions imposed by the SEC under any amended order if they
seek to avail themselves of the relief provided by the 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 of a new subadviser to replace an existing subadviser
or (2) the allocation of a portion of its assets to an additional
subadviser or (3) the reallocation of portfolio assets among existing
subadvisers;
- 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, which is why Proposals No. 2, 3, 4 and 5 are being
submitted to shareholders of the Europe Growth, Pacific Growth, Global Growth
and International Value Funds, respectively.) 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. 6 is implemented.
The kind of changes to subadvisory arrangements that could be effected
without further shareholder approval if Proposal No. 6 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
22
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. 6. Each Board
further believes that these gains in efficiency would ultimately benefit each
Fund and its shareholders.
Although a Manager-of-Managers structure will be put into place for each
Fund whose shareholders approve Proposal No. 6, 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. It is this analysis that led PIFM to propose Gartmore,
JFIMI, Jennison and BIAM (U.S.) Limited as subadvisers to the Europe Growth,
Pacific Growth, Global Growth and International Value Funds, respectively.
Following shareholder approval of Proposal No. 6, PIFM will continue to be
each Fund's investment manager. In addition, following shareholder approval of
Proposals 2, 3, 4 and 5, Gartmore will serve as subadviser to the Europe Growth
Fund, JFIMI will serve as subadviser to the Pacific Growth Fund, Jennison will
continue to serve as subadviser to the Global Growth Fund and BIAM (U.S.)
Limited will serve as subadviser to the International Value Fund, respectively.
(Proposals 2, 3, 4 and 5 provide more information about Gartmore, JFIMI,
Jennison and BIAM (U.S.) Limited, respectively.) Each Board and PIFM, under the
Board's supervision, will continue to monitor the nature and quality of the
services provided by these Subadvisers and may, in the future, recommend
additional subadvisers (apart from Gartmore, JFIMI, Jennison or BIAM (U.S.)
Limited) or the reallocation of assets among these and other subadvisers. If one
or more new 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 (apart from Gartmore, JFIMI, Jennison or BIAM (U.S.) Limited)
will be added.
If Proposal No. 6 is approved by a Fund's shareholders, 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 (unless the SEC permits information as to the
rate of fees to be paid to subadvisers not to be disclosed) 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. 6 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. 6 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.
23
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. 6, subject to certain conditions, including approval
of Proposal No. 6 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.
The 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. 6, 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. 6 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.]
24
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.
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. 6 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. 6 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. 6.
TO PERMIT AN AMENDMENT TO THE MANAGEMENT CONTRACT TO ALLOCATE A FUND'S
ASSETS AMONG AFFILIATED AND UNAFFILIATED SUBADVISERS
PROPOSAL NO. 7
THIS PROPOSAL APPLIES TO ALL FUNDS.
The Board of each Fund, 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 each Fund. 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%.
25
A NOTE FOR SHAREHOLDERS OF THE REAL ESTATE AND JENNISON INTERNATIONAL FUNDS:
If the Amended Agreement is approved with respect to your Fund, the Fund's
subadvisory agreement between PIFM and PIC or Jennison (the Existing
PIC/Jennison 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/Jennison Subadvisory Agreement in order to permit PIFM, with Board
approval, to allocate and reallocate your Fund's portfolio assets to and from
PIC or Jennison, as applicable, from 0% to 100% of your Fund's portfolio assets
and to clarify that PIC's or Jennison's subadvisory fee will be based on the
portfolio assets that it manages (the Amended PIC/Jennison Subadvisory
Agreement). THE AMENDED PIC/JENNISON SUBADVISORY AGREEMENT WILL BE THE SAME IN
ALL OTHER MATERIAL RESPECTS AS THE EXISTING PIC OR JENNISON SUBADVISORY
AGREEMENT, AS APPLICABLE, except as to the date of the Agreement. The Boards of
each of the Real Estate and Jennison International Funds, including the
Independent Directors, have approved amending the Existing PIC/Jennison
Subadvisory Agreement. We have attached as Exhibit G-2 to this proxy statement a
form of the Amended PIC/Jennison Subadvisory Agreement applicable to the Real
Estate and Jennison International Funds. If the Amended Agreement is approved at
the Meeting, the Amended PIC/Jennison Subadvisory Agreement will supersede the
Existing PIC/Jennison Subadvisory Agreements between PIFM and PIC and Jennison
with respect to the Real Estate and Jennison International Funds, respectively.
EXISTING PIC/JENNISON SUBADVISORY AGREEMENT
The Existing PIC/Jennison Subadvisory Agreement provides that PIC or
Jennison will furnish investment advisory services in connection with the
management of the Real Estate and Jennison International Funds, respectively. In
connection with those services, PIC and Jennison are obligated to keep certain
books and records of the Real Estate and Jennison International Funds,
respectively. Pursuant to the Existing Agreement, as well as under the Amended
Agreement, PIFM continues to have responsibility for all investment advisory
services.
The table below lists the compensation paid by PIFM to PIC and Jennison
under the applicable Subadvisory Agreement for the last fiscal year of each
Fund, as well as the date of that Agreement, the date on which that Agreement
was last submitted to shareholders for approval and the fees paid by PIFM to PIC
and Jennison. Continuance of these Agreements was most recently approved by the
Board on May 23 or 24, 2000, as set forth on page 28.
EXISTING PIC OR
JENNISON DATE SUBADVISORY FEE PAID TO PIC OR
SUBADVISORY AGREEMENT JENNISON (% OF
AGREEMENT SUBMITTED TO AVERAGE DAILY
FUND DATE SHAREHOLDERS NET ASSETS)
- ---- --------------- ---------------- ------------------
Real Estate(1)............ 2/18/98 2/18/98 0.375%(2)
Jennison International.... 11/18/99 11/18/99 0.60% of the first $300 million
0.50% of the first $1.5 billion
0.45% of assets in excess of $1.5 billion.
- ------------------------
(1) The Existing PIC Subadvisory Agreement was amended effective January 1, 2000
to provide for the payment of an annual fee by PIFM to PIC equal to 0.375%
of the average daily net assets of the Real Estate Fund.
(2) Prior to January 1, 2000, PIFM reimbursed PIC for its reasonable costs and
expenses incurred in performing subadvisory services for the Real Estate
Fund.
The table on page 29 lists the fees paid to PIFM by each Fund. For the
period from January 1, 2000 to March 31, 2000, PIFM paid $54,874 to PIC for
subadvisory services provided to the Real Estate Fund. Prior to January 1, 2000,
PIFM reimbursed PIC for its reasonable costs and expenses incurred in
26
performing subadvisory services for the Real Estate Fund. For the fiscal year
ended October 31, 2000, PIFM paid $1,316,135 to Jennison for subadvisory
services provided to the Jennison International Fund.
PIC does not currently advise any other mutual funds with investment
objectives and policies similar to those of the Real Estate Fund.
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. Similar information
with respect to Jennison can be found in the discussion of Proposal No. 4.
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 Chief Executive Officer,
Director 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 100% of its assets to one subadviser
would be able to change the allocation to 50% to one subadviser and 50% to a
second subadviser with Board approval but without seeking shareholder approval.
(The Fund's Board could appoint the second unaffiliated subadviser with
shareholder approval or, if Proposal No. 6 is approved, by Board action alone.)
Alternatively, 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 25% to subadviser #2 without seeking shareholder approval.
27
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 AGREEMENT DATE AGREEMENT
MOST RECENTLY MOST RECENTLY
DATE OF AGREEMENT RENEWED SUBMITTED FOR SHAREHOLDER
FUND WITH PIFM BY BOARD APPROVAL
- ---- ----------------- -------------- -------------------------
Europe Growth............ 7/11/94 5/23/00 7/7/94
Pacific Growth........... 7/16/92 5/23/00 6/25/92
Real Estate.............. 2/18/98 5/24/00 2/18/98
Global Growth............ 2/28/88 5/23/00 2/25/88
International Value...... 9/18/96 5/23/00 9/17/96
Jennison International... 11/18/99 5/23/00 11/18/99
PIFM serves as manager to the Funds and to almost all of the other
investment companies that comprise the Prudential Mutual Funds. As of
December 31, 2000, PIFM managed and/or administered open-end and closed-end
management investment companies with assets of approximately $76 billion.
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.
28
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 a Subadviser 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:
FISCAL YEAR TOTAL MANAGEMENT FEES AS % MANAGEMENT
FUND ENDED OF AVERAGE NET ASSETS FEES PAID
- ---- ----------- ---------------------------------- ----------
Europe Growth........................ 4/30/00 0.75% $2,306,681
Pacific Growth....................... 10/31/00 0.75% 1,426,965
Real Estate.......................... 3/31/00 0.75% 574,489
Global Growth........................ 10/31/00 0.75% 6,502,580
International Value.................. 10/31/00 1.00% 5,524,090
Jennison International............... 10/31/00 0.85% up to $3 million; 1,874,203
0.75% of assets between $3 million
and $1.5 billion;
and 0.70% of assets over $1.5
billion
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
29
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.
CLASS A Class B Class C
FISCAL 12b-1 12b-1 12b-1
FUND YEAR ENDED Fees Fees Fees
- ---- ---------- ---------- ---------- --------
Europe Growth................ 4/30/00 $213,293 $1,938,110 $159,740
Pacific Growth............... 10/31/00 133,472 960,186 73,759
Real Estate.................. 3/31/00 49,077 472,708 82,154
Global Growth................ 10/31/00 1,037,588 3,323,133 188,863
International Value.......... 10/31/00 168,405 991,060 180,819
Jennison International....... 10/31/00 142,928 984,173 527,587
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 indicated
above.
CLASS A CLASS C
FUND SALES CHARGES SALES CHARGES
- ---- ------------- -------------
Europe Growth................................... $ 121,600 $ 33,800
Pacific Growth.................................. 56,000 29,100
Real Estate..................................... 88,100 13,700
Global Growth................................... 228,900 45,600
International Value............................. 83,000 31,300
Jennison International.......................... 2,334,000 954,000
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 indicated above.
CLASS B CLASS C
FUND CDSCS CDSCS
- ---- ---------- --------
Europe Growth....................................... $ 367,400 $ 9,500
Pacific Growth...................................... 207,000 19,600
Real Estate......................................... 512,000 8,500
Global Growth....................................... 410,500 6,600
International Value................................. 276,000 9,000
Jennison International.............................. 352,000 110,000
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 indicated above.
TRANSFER AGENT
FUND FEES
- ---- --------------
Europe Growth............................................... $ 419,600
Pacific Growth.............................................. 369,400
Real Estate................................................. 94,400
Global Growth............................................... 1,252,500
International Value......................................... 981,700
Jennison International...................................... 220,800
30
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 during the fiscal years indicated above:
AGGREGATE AMOUNT OF COMMISSIONS
PAID (% OF AGGREGATE BROKERAGE
FUND COMMISSIONS)
- ---- -------------------------------
Europe Growth................................ 0
Pacific Growth............................... 0
Real Estate.................................. $17,000 (5.29%)
Global Growth................................ 0
International Value.......................... 0
Jennison International....................... 0
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. 6 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.
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 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 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
31
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. 7 is reasonable, fair and in the best interests 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. 7.
TO APPROVE CHANGES TO FUNDAMENTAL INVESTMENT
RESTRICTIONS AND POLICIES
PROPOSAL NO. 8
THIS PROPOSAL APPLIES TO ALL FUNDS.
BACKGROUND
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 subadvisers 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 subadvisers' 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. PIFM 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 shareholders of other Prudential Mutual Funds have been asked
to approve these uniform restrictions, and 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
32
- 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 Prudential Mutual Funds arising from their
historical development, there are also, and will continue to be, differences
resulting from a Fund's investment objective or, with respect to other
Prudential Mutual Funds, 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 those restrictions.
The proposed uniform fundamental investment restrictions and policies are as
follows (the information in brackets is explanatory and is not part of the
restrictions):
The following restrictions are fundamental policies. Fundamental
policies are those that cannot be changed without the approval of the
holders 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.
The Fund may not:
(1) 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").
(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 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.
(3) 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 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.
33
(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 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) 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.
(6) 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. [Each Fund's current
investment restriction regarding underwriting is the same as the proposed
uniform policy, so it is not being presented to shareholders for
approval.]
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 will not be
considered the making of a loan, and is permitted if consistent with the
Fund's investment objective.
[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
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.
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 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
change in percentage resulting from changing total asset values will not be
considered a violation of such policy. However, if the 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 8(a): FUND DIVERSIFICATION (ALL FUNDS EXCEPT REAL ESTATE)
These Funds are operated as diversified investment companies under the 1940
Act. In general, this means that, with respect to 75% of the value of a 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 "other securities" are subject 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 will not hold more than 10%
of an issuer's outstanding voting securities.
34
The proposed amendment would restrict such a Fund from purchasing the
securities of any issuer if, as a result, the Fund would fail to be a
diversified management company within the meaning of the 1940 Act Laws,
Interpretations and Exemptions, except to the extent that the Fund may be
permitted to do so by the 1940 Act Laws, Interpretations and Exemptions. 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.
In addition, each such Fund currently has a fundamental investment
restriction prohibiting purchasing more than 10% of the outstanding voting
securities of any one issuer. If the proposed amendment is approved, this
restriction would be eliminated.
RECOMMENDATION: To provide flexibility as laws change or relief is obtained
from the SEC or its Staff, while also requiring these Funds to comply with the
currently applicable definition of a "diversified" investment company, the Board
of each such 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 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 8(b): ISSUING SENIOR SECURITIES, BORROWING MONEY OR PLEDGING ASSETS
(ALL FUNDS)
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.
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 Laws,
Interpretations and Exemptions. The restriction is accompanied by a 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. None of the Funds 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 are not integral parts
of your Fund's investment program. Under the proposed investment restriction,
the Fund 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
35
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.
Each Fund also has fundamental investment restrictions prohibiting short
sales, other than short sales against-the-box (which require the Fund to own an
equal amount of the same securities or securities convertible into the
securities sold short), and each Fund's restriction specifically allows the Fund
to obtain short-term credits necessary for the clearance of transactions. Since
the proposed investment restriction includes short sales within the list of
items not deemed to be a pledge of assets or the issuance of a senior security,
approval of Proposal No. 8(b) will result in the elimination of each Fund's
fundamental investment restriction relating to short sales.
In addition, each of the Europe Growth, Pacific Growth, Real Estate and
Global Growth Funds has a fundamental investment restriction prohibiting the
purchase of securities on margin (except that the Fund may obtain such
short-term loans as 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. Approval of Proposal No. 8(b) would result in the
elimination of this restriction with respect to these Funds.
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. 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.
Short sales involve costs and risks. The Fund must pay the lender interest
on the security it borrows, and the Fund will lose money if the price of the
security increases between the time of the short sale and the date when the Fund
replaces the borrowed security.
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.
36
PROPOSAL 8(c): BUYING AND SELLING REAL ESTATE (ALL FUNDS)
None of the Funds is permitted to buy or sell real estate. However, 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 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.
If Proposals 8(c) and 8(e)(ii) are approved by shareholders of the Real
Estate Fund, this investment restriction will apply in conjunction with the
Fund's new concentration policy.
PROPOSAL 8(d): BUYING AND SELLING COMMODITIES AND COMMODITY CONTRACTS (ALL
FUNDS)
None of the Funds is permitted to buy or sell commodities or commodity
contracts. In addition, none of the Europe Growth, Pacific Growth and Global
Funds is permitted to invest in interests in oil, gas or other mineral
exploration or development programs. The Funds are permitted to invest in
financial futures contracts, options on financial futures contracts and forward
currency exchange contracts, and in the securities of companies that sponsor
mineral exploration or development programs, 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 intends to utilize
financial futures contracts and options on financial futures contracts, a
description of these instruments will appear in the Fund's Prospectus or
Statement of Additional Information.
If the proposed investment restriction is approved as to a Fund, that Fund's
restriction, if any, prohibiting the Fund from investing in interests in oil,
gas or other mineral exploration or development programs will be eliminated.
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
37
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 adviser 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
development and maintenance of liquid 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 is 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'
restrictions applicable to investments in commodities and commodity contracts,
the Board of each Fund recommends that shareholders adopt the following as 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
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 8(e)(i): FUND CONCENTRATION (ALL FUNDS EXCEPT THE REAL ESTATE FUND)
All Funds (except Real Estate) 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 a Fund's policy regarding
concentration, but to provide uniformity in disclosure of the policy among the
Funds and the other Prudential Mutual 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.
38
RECOMMENDATION: The Board of each 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'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.
PROPOSAL 8(e)(ii): FUND CONCENTRATION (THE REAL ESTATE FUND ONLY)
The Real Estate Fund concentrates its investments (i.e., will invest at
least 25% of its total assets under normal circumstances) in real estate
securities, including real estate investment trusts ("REITs"). Currently, the
Fund's Statement of Additional Information (SAI) states that the Fund may not
"Purchase any security (other than obligations of the U.S. government, its
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 a single
industry." The Fund's SAI further states that "[t]he Fund does not consider
[REITs] an 'industry' for purposes of this investment restriction." In a meeting
held on November 14, 2000, the Board of Trustees of the Fund determined that the
Fund's investment restrictions should be amended to clarify that the Fund will
concentrate in real estate securities, including REITs.
Approval of this Proposal by shareholders of the Real Estate Fund will serve
to incorporate the Fund's concentration policy with respect to real estate
securities, including REITs, in its investment restriction with respect to
industry concentration.
RECOMMENDATION: The Board of the Real Estate 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'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, or to real estate securities, including real estate
investment trusts ("REITs"). The Fund will concentrate its investments
(i.e., will invest at least 25% of its total assets under normal
circumstances) in real estate securities, including REITs.
PROPOSAL 8(f): MAKING LOANS (ALL FUNDS)
The Funds currently lend money and assets in limited situations. The Funds
may, for example, purchase certain debt securities of governments, corporate
issuers or banks, as described in each Fund's current registration statement and
the proposed investment restriction.
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 have established a securities lending program where they use a
securities lending agent to locate institutions that, on a temporary basis, seek
to hold certain 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
39
from the borrower and the right to have the security returned to the Fund on
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 intended to eliminate the current investment
restriction. The new disclosure more accurately describes the Funds' lending
activities and plans to make loans of assets 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 engage in repurchase
agreement transactions and securities lending without these activities being
deemed prohibited loans.
RISKS: Where a Fund engages in securities lending, it assumes a risk that a
borrower fails to maintain the required amount of collateral. The Fund or its
lending agent would be required to pursue the borrower for any excess
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 if the borrower of the securities fails financially. To mitigate
these risks, each Fund's investment adviser makes loans of portfolio securities
only to firms determined to be creditworthy.
In repurchase agreement transactions, a seller of a security agrees to
repurchase 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.
PROPOSAL 8(g): OTHER INVESTMENT RESTRICTIONS (ALL FUNDS EXCEPT THE INTERNATIONAL
VALUE AND JENNISON INTERNATIONAL FUNDS)
Certain Funds have adopted additional fundamental investment restrictions
which 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 these Funds.
To provide maximum flexibility in managing the Funds and uniformity in the
restrictions applicable to these Funds, the Board of each such Fund proposes
that all investment restrictions and policies of each such Fund apart from its
investment objective and other than those listed in Proposals No. 8(a) through
8(f), and each Fund's current fundamental restriction on underwriting, be
designated as non-fundamental. This means that each such investment restriction
or policy could be changed by the Board of Directors without shareholder
approval, although shareholders would be informed of any material change to any
non-fundamental restriction or policy prior to the change.
40
The investment restrictions of each such Fund that will be designated
non-fundamental are included in Exhibit H and are summarized below. There is no
current intention to change these, apart from the restrictions relating to
investing in other investment companies, as described below.
The Fund may not:
1. Make investments for the purpose of exercising control or
management. (This restriction would become non-fundamental for these Funds.)
2. Invest in securities of other investment companies, except, subject
to certain restrictions, by purchases in the open market involving customary
brokerage commissions. (This restriction would become non-fundamental for
these Funds and would be modified as described below.)
3. Purchase warrants if as a result the Fund would then have more than
5% of its total assets invested in warrants or more than 2% of its total
assets invested in warrants not listed on the New York or American Stock
Exchanges. (This restriction would become non-fundamental for the Global
Growth Fund.)
The Funds have obtained an exemptive order from the SEC that allows each
Fund to invest up to 25% of its assets in shares of an affiliated mutual fund.
Such investment would be made to facilitate your Fund's investment of its cash
and short-term investments. The ability to invest in an affiliated mutual fund
should allow each Fund to reduce the administrative burdens and costs associated
with investing in money market instruments and short-term debt securities. Each
Fund would be permitted to invest in an affiliated mutual fund only if the
investment is consistent with the Fund's investment objective and strategy.
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
open market and so long as the Fund does not hold more than 3% of the
outstanding voting securities of another investment company, will not invest
more than 5% of its total assets in any one investment company and will not
invest more than 10% of its total assets (determined at the time of investment)
in any number of investment companies. If shareholders approve the designation
of a 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 specific investment restrictions and policies affected by Proposal
No. 8 are identified in Exhibit H. If shareholders of a Fund approve Proposal
No. 8(g), all of the Fund's investment restrictions and policies (apart from its
investment objective, those restrictions listed in Proposals No. 8(a) through
8(f) and each Fund's current fundamental restriction on underwriting) will be
non-fundamental. If shareholders of a Fund reject Proposal No. 8(g), the Fund's
two or three additional current fundamental investment restrictions will remain
fundamental.
REQUIRED VOTE
Approval of these Proposals as to a Fund requires the affirmative vote of a
majority of the Fund's outstanding voting securities, as defined in the 1940
Act.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" PROPOSALS NO. 8(a), 8(b), 8(c), 8(d), 8(e), 8(f) AND 8(g), AS
APPLICABLE.
TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUNDS
PROPOSAL NO. 9
The Board of each Fund, including a majority of the Independent Directors,
has selected PricewaterhouseCoopers LLP (PwC) as independent accountants for
each Fund for the current fiscal year. PwC has served as independent accountants
for all of the Funds except Real Estate Fund for each year
41
since at least 1996. In the case of Real Estate Fund, PwC has served as
independent accountants since the Fund's inception in 1998. 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 PwC. No
representative of PwC is expected to be present at the Meeting.
The Board policy regarding engaging independent accountants' services is
that management may engage a Fund's principal independent accountants to perform
any service normally provided by independent accounting firms, provided that
such service meets the independence requirements of the American Institute of
Certified Public Accountants and the SEC. The Audit Committee will review and
approve services provided by the independent accountants prior to their being
rendered. The Audit Committee responsibilities have been summarized in Proposal
No. 1. Each Board also receives a report from its Audit Committee relating to
all services after they have been performed by a Fund's independent accountants.
AUDIT FEES
The aggregate fees billed by PwC for professional services rendered for the
audit of each Fund's annual financial statements for its most recent fiscal year
are shown in the following table.
FUND FISCAL YEAR END AGGREGATE FEES
- ---- --------------- --------------
Europe Growth................................. 4/30/00 $35,000
Pacific Growth................................ 10/31/00 36,000
Real Estate................................... 3/31/00 25,000
Global Growth................................. 10/31/00 35,000
International Value........................... 10/31/00 35,000
Jennison International........................ 10/31/00 35,000
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PwC billed no fees for professional services rendered to any Fund for
information technology services relating to financial information systems design
and implementation for its most recent fiscal year. Similarly, PwC billed no
fees for professional services rendered to any Fund's investment adviser and any
entities controlling, controlled by or under common control with the Fund's
investment adviser that provide services to the Fund for information technology
services relating to financial information systems design and implementation for
the calendar year ended December 31, 2000.
ALL OTHER FEES
The aggregate fees billed by PwC for services rendered to each Fund's
investment adviser and any entity controlling, controlled by or under common
control with the Fund's investment adviser that provides services to the Fund,
amounted to approximately $2,800,000 for the calendar year ended December 31,
2000.
At its most recent meeting in November 2000, the Audit Committee of each
Fund reviewed information presented by the Fund's independent accountants that
addressed the matters set forth in Independence Standards Board Standard No. 1,
INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES. Effective February 5, 2001, new
Securities and Exchange Commission rules generally require the disclosure in a
Fund's proxy statement of whether the Fund's Audit Committee considered whether
the provision of non-audit services to the Fund and of professional services to
the Fund's adviser and to entities controlling, controlled by and under common
control with the Fund's adviser that provide services to the Fund is compatible
with maintaining the independence of the Fund's independent accountants. Because
no Fund's Audit Committee has met since these new rules became effective, no
Audit Committee has expressly considered whether the provision by the Fund's
independent accountants of such services is compatible
42
with maintaining the independence of the Fund's accountants. Nevertheless, each
Audit Committee is generally aware of the nature and extent of the fees earned
by the Fund's independent accountants from such non-audit services. As noted
above, the independent accountants did not provide any non-audit services to the
Funds for the most recent fiscal year.
REQUIRED VOTE
The affirmative vote of at least a majority of the shares present, in person
or by proxy, at the Meeting is required for ratification as to each Fund.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL NO. 9.
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 PIFM, who will
not receive any compensation therefor from the Funds or by Georgeson Shareholder
Communications 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 obtained through procedures
reasonably designed to verify that the instructions have been authorized.
Soliciting fees and expenses payable to Georgeson Shareholder Communications
Inc. by a particular Fund are a function of the number of shareholders in that
Fund. Twenty-five percent of the cost of the Meetings will be borne by PIFM.
ESTIMATED SOLICITATION
FUND FEES AND EXPENSES
- ---- ----------------------
Europe Growth.......................................... $101,600
Pacific Growth......................................... 76,000
Real Estate............................................ 27,500
Global Growth.......................................... 136,000
International Value.................................... 239,500
Jennison International................................. 80,700
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal to be considered at a Fund's
next meeting of shareholders should send the proposal to that Fund at Gateway
Center Three, 100 Mulberry Street, 4th Floor, Newark, New 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 shareholders if
the election of Board Members is not required under the 1940 Act. It is the
present intention of the Board of each Fund not to hold annual meetings of
shareholders unless such shareholder 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.
43
OTHER BUSINESS
Management knows of no business to be presented at the Meeting other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote according to their
best judgment in the interest of the Funds.
/s/ Marguerite E. H. Morrison
Marguerite E. H. Morrison
SECRETARY
February 15, 2001
It is important that you execute and return ALL of your proxies promptly.
44
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
Exhibit C Fund Ownership of Nominees and Current Board Members
Standing for Election
Exhibit D Board and Committee Information
Exhibit E Officer Information
Exhibit F-1 Form of Subadvisory Agreement with Gartmore
Exhibit F-2 Subadvisory Agreement with JFIMI
Exhibit F-3 Form of Subadvisory Agreement with Jennison
Exhibit F-4 Form of Subadvisory Agreement with BIAM (U.S.) Limited
Exhibit G-1 Form of Management Agreement
Exhibit G-2 Form of Amended Subadvisory Agreement with PIC/Jennison
Exhibit H Fundamental Restrictions
45
EXHIBIT A
FIVE PERCENT SHAREHOLDER REPORT
As of January 19, 2001, the beneficial owners, directly or indirectly, of
more than 5% of the outstanding shares of the Funds are listed below.
FUND NAME REGISTRATION SHARES/CL PERCENT
- --------- --------------------------------------- ------------ --------
Europe Growth Prudential Trust Company 47,909/C 5.7%
FBO Ellen Memorial Health Care
Attn: Robert G Zamady
RR#1
Honesdale PA 18431
Pru Defined Contributions 154,029/Z 20.0%
SVCS
FBO PRU-NON-TRUST ACCOUNTS
Att John Surdy
30 Scranton Office Park
Moosic PA 18507
Prudential Trust Company 98,357/Z 12.7%
FBO PRU-DC TRUST ACCOUNTS
Att John Surdy
30 Scranton Office Park
Moosic PA 18507
American Prime Asset 39,831/Z 5.2%
Escrow Agent
GT Insurance Escrow Account
8700 N Stemmons FWY Ste 414
Dallas TX 75247-3713
Pacific Growth Salomon Smith Barney 53,868/C 12.6%
00150807649
333 West 34th St
3rd Floor
New York NY 10001
Prudential Trust Company 36,235/C 8.4%
FBO ST. Clarles Trading, Inc
650 N Raddant Rd
Batavia IL 60510
Anna T Ford 22,779/C 5.3%
608 Scotswood Cir
Knoxville TN 37919-7456
Mr Warren L Demaio 33,319/C 7.8%
Warren L. Demaio Trust
UA DTD 03/18/91
217 N Adams St
Hinsdale IL 60521
Mr Michael Tinkler 21,046/Z 5.9%
33 Beverly Ave
Lansdowne PA 19050-2705
Pru Defined Contributions 85,510/Z 23.9%
FBO PRU-NON-TRUST ACCOUNTS
Attn: John Surdy
30 Scranton Office Park
Moosic PA 18507
A-1
FUND NAME REGISTRATION SHARES/CL PERCENT
- --------- --------------------------------------- ------------ --------
The Granite Group, L.P. 32,170/Z 9.0%
Attn: Jeffery L Bernstein
Special Account #1
Sak 141 W Jackson Blvd
Ste 300
Chico IL 60604-2905
Real Estate United Farm Family 480,000/A 26.0%
Mutual Insurance Co
Attn Mr. Brad Barkley
PO Box 1250
Indianapolis IN 46206-1250
Salomon Smith Barney 58,693/C 10.4%
00114304205
333 West 34th Street
3rd Floor
New York, NY 10001
Firehouse Island Enterprise 6,492/Z 5.2%
A Partnership
C/O Gunnar M Ildhuso Jr
21722 Chinook Rd
Woodway WA 98020-4115
World Global Growth Prudential Trust Company 240,864/C 19.4%
FBO Jennings Excavation, Inc
14 Clinton Drive
Hollis NH 03049
Pru Defined Contributions 280,975/Z 7.9%
FBO PRU-NON-TRUST ACCOUNTS
Attn: John Surdy
30 Scranton Office Park
Moosic PA 18507
World International Value Pru Defined Contribution 168,442/A 5.4%
Svcs
FBO PRU-NON-TRUST ACCOUNTS
Attn: John Surdy
30 Scranton Office Park
Moosic PA 18507
Prudential Trust Company 58,370/C 7.6%
FBO A & B Precision Metals Inc
1300 Selmi Dr
Reno NV 89512
Prudential Employee Saving Plan 11,680,377/Z 61.9%
Attn: Leann Yannuzzi
30 Ed Preate Dr
Scranton PA 18507
Prudential Trust Company 5,568,687/Z 29.5%
FBO PRU-DC TRUST ACCOUNTS
Attn: John Surdy
30 Scranton Office Park
Moosic PA 18507-1
World International Growth Wachovia Bank NA 140,449/Z 5.9%
AS TTEE For T Jennison Retention Trust
FBO: Blair Boyer
301 North Main Street
Winston-Salem NC 27150
A-2
EXHIBIT B
YEAR IN WHICH CURRENT BOARD MEMBERS STANDING
FOR RE-ELECTION BECAME A MEMBER OF THE BOARD
EUROPE PACIFIC REAL
DIRECTOR/TRUSTEE GROWTH GROWTH ESTATE WORLD
- ---------------- -------- -------- -------- --------
Gold, Delayne D............................................. 1996 1992 1997 1984
Gunia, Robert F............................................. 1996 1996 1997 1996
LaBlanc, Robert E........................................... 1996 1992 -- 1984
Odenath Jr., David R........................................ 1999 1999 1999 1999
Rice, Judy A................................................ 2000 2000 -- 2000
Smith, Robin................................................ 1994 1996 1997 1996
Stoneburn, Stephen.......................................... 1996 1996 -- 1996
Teeters, Nancy H............................................ 1996 1996 -- 1996
Whitehead, Clay T........................................... 1999 1992 1997 1984
B-1
EXHIBIT C
FUND OWNERSHIP OF NOMINEES AND CURRENT
BOARD MEMBERS STANDING FOR ELECTION
NUMBER OF SHARES HELD AS OF JANUARY 19, 2001
WORLD WORLD WORLD
DIRECTOR/ EUROPE PACIFIC REAL GLOBAL INT'L JENNISON
TRUSTEE GROWTH GROWTH ESTATE GROWTH VALUE INT'L
- ------- -------- -------- -------- -------- -------- --------
Gold, Delayne D..................................... -- -- -- 3,353 -- --
Gunia, Robert F..................................... -- -- -- 2,706 -- --
LaBlanc, Robert E................................... 1,763 1,556 -- 1,864 285 --
Odenath Jr., David R................................ -- -- -- -- -- --
Rice, Judy A........................................ -- -- -- -- -- --
Smith, Robin........................................ -- -- -- -- -- --
Stoneburn, Stephen.................................. 942 365 -- -- -- --
Teeters, Nancy H.................................... -- -- -- -- -- --
Whitehead, Clay T................................... -- -- -- -- -- --
C-1
EXHIBIT D
BOARD AND COMMITTEE INFORMATION (1)
PRUDENTIAL
PRUDENTIAL PRUDENTIAL REAL ESTATE
EUROPE GROWTH PACIFIC GROWTH SECURITIES PRUDENTIAL
FUND, INC. FUND, INC. FUND WORLD FUND, INC.
------------ -------------- ----------- -----------------
Annual Fee(2)...................................... N/A N/A N/A N/A
Fee for Attendance at Board Meetings(2)............ N/A N/A N/A N/A
Fee for Attendance at Committee Meetings(2)........ N/A N/A N/A N/A
Number of Board Meetings during the Last Fiscal
Year............................................. 6 6 6 6
Number of Audit Committee Meeting during the Last
Fiscal Year*..................................... 4 4 4 4
Number of Nominating Committee Meetings during the
Fiscal Year*..................................... 1 1 1 1
Size of Current Board.............................. 9 9 13** 9
- ------------------------------
* Only the Independent Directors/Trustees serve on the Fund's Audit and
Nominating Committees.
** Although there are currently 13 members of the Prudential Real Estate
Securities Fund Board, the Fund will have only 9 members following the
election.
(1) No 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 3 of this
proxy statement. No Director/Trustee, other than Ms. Rice, who became a
Board member of these Funds in November, 2000, attended fewer than 75% of
the total number of Board and Committee meetings during the last fiscal year
of each Fund.
D-1
EXHIBIT E
OFFICER INFORMATION
OFFICER SINCE
NAME, AGE, PRINCIPAL ---------------------------
BUSINESS OCCUPATION FOR THE EUROPE PACIFIC REAL
PAST FIVE YEARS OFFICE GROWTH GROWTH ESTATE WORLD
- --------------------------- ------ ------ ------- ------ -----
David R. Odenath, Jr. (43) President 2000 2000 2000 2000
President (since June 1999) of
Prudential Investments; President,
Chief Executive Officer and Chief
Operating Officer (since June
1999) of Prudential Investments
Fund Management LLC (PIFM); Senior
Vice President (since June 1999)
of The Prudential Insurance
Company of America; formerly
Senior Vice President (August
1993-May 1999) of PaineWebber
Group, Inc.
Robert F. Gunia (54) Vice President 1994 1992 1998 1987
Executive Vice President and Chief
Administrative Officer (since June
1999) of Prudential Investments;
Corporate Vice President (since
September 1997) of the Prudential
Insurance Company of America
(Prudential); Executive Vice
President and Treasurer (since
December 1996) of Prudential
Investments Fund Management LLC
(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 (June 1987-September 1996)
of Prudential Mutual Fund
Management, Inc. (PMF).
Grace C. Torres (41) Treasurer and Principal 1995 1998 1997 1995
First Vice President (since Financial and Accounting
December 1996) of PIFM; First Vice Officer
President (since March 1994) of
Prudential Securities; formerly
First Vice President (March
1994-September 1996) of Prudential
Mutual Fund Management, Inc.
Marguerite E. H. Morrison (44) Secretary 2001 2001 1998 2001
Vice President and Corporate
Counsel and Chief Legal Officer
(since August 2000) of the Mutual
Funds Division of Prudential; Vice
President and Associate General
Counsel (since December 1996) of
PIFM; formerly Vice President and
Associate General Counsel
(September 1987-September 1996) of
Prudential Securities; Vice
President and Associate General
Counsel (June 1991-September 1996)
of Prudential Mutual Fund
Management, Inc.
William V. Healey (46) Assistant Secretary 2000 2000 2000 2000
Assistant Secretary Vice President
and Associate General Counsel of
Prudential and Chief Legal Officer
of Prudential Investments (since
August 1998); Director, ICI Mutual
Insurance Company (since June
1999); formerly Associate General
Counsel of 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.
E-1
EXHIBIT F-1
PRUDENTIAL EUROPE GROWTH, INC. FUND
FORM OF SUBADVISORY AGREEMENT
Agreement made as of this 31st day of January, 2001 between Prudential
Investments Fund Management LLC, a New York limited liability company ("PIFM" or
the "Manager"), and Gartmore Global Partners, a Delaware general partnership
(the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated July 11,
1994, (the "Management Agreement"), with Prudential Europe Growth Fund, Inc.
(the "Fund"), a Maryland corporation and a diversified, 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, the Subadviser is registered with the Securities and Exchange
Commission ("SEC") as an investment adviser under the Investment Advisers Act of
1940, as amended ("Advisers Act"), and is regulated by the Investment Management
Regulatory Organisation Limited ("IMRO") of the United Kingdom in the conduct of
its investment business and is a member of IMRO; and
WHEREAS, the Management Agreement permits PIFM to delegate certain of its
duties under the Management Agreement to other investment advisers, subject to
the requirements of the 1940 Act; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified herein,
if any (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
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 assets of the Fund as the Manager shall direct (the "Subadviser Assets")
and shall manage the Subadviser Assets, including the purchase, retention
and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus(es) (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 manage 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.
The Manager agrees to provide the Subadviser with such assistance
as may be reasonably requested by the Subadviser in connection with
the Subadviser's activities under this Agreement, including, without
limitation, and to the extent available to the Manager, information
concerning the Fund, the funds available, or to become available, for
investment and generally as to the conditions of the Fund's affairs.
In particular, but without prejudice to the generality of the
foregoing, the Manager shall authorize the Fund's custodian to
provide such information to the Subadviser as it may reasonably
require, and to act upon the Subadviser's instructions given in the
proper performance by the Subadviser of this Agreement.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the
Articles of Incorporation, By-Laws and Prospectus of the Fund and
with the instructions and directions of the Manager and of the Board
of Directors/Trustees of the Fund, and will conform to and comply
with the
F-1(1)
requirements of the 1940 Act, the Internal Revenue Code of 1986 (the
"Code") 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.
Notwithstanding the foregoing, the Manager shall remain responsible
for ensuring the Fund's overall compliance with the 1940 Act and the
Code and the Subadviser is only obligated to comply with this
subsection (ii) with respect to the Subadviser Assets.
The Manager will also provide the Subadviser with reasonable
advance notice of any change in the Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser shall, in the performance of its duties and obligations
under this Agreement, manage the Subadviser Assets consistent with
such changes. In addition to such notice, the Manager shall provide
to the Subadviser a copy of a modified Prospectus reflecting such
changes.
Subject to the investment objectives and limitations imposed upon
the Subadviser under this Agreement and applicable law, the
Subadviser shall be entitled to exercise complete discretion to buy,
sell, retain, exchange or otherwise deal in the Subadviser Assets.
(iii) The Subadviser is authorized, subject to the supervision of
the Manager and the Board of Directors/Trustees of the Fund, to
establish and maintain accounts on behalf of the Fund with, and place
orders for the purchase and sale of the Subadviser Assets with or
through, such persons, brokers (including, to the extent permitted by
applicable law, any broker affiliated with the Subadviser or the
Manager) or dealers ("brokers") as the Subadviser may elect and
negotiate commissions to be paid on such transactions. The
Subadviser, however, is not required to obtain the consent of the
Manager or the Board of Directors/Trustees of the Fund prior to
establishing any such brokerage account. The Subadviser shall place
all orders for the purchase and sale of portfolio investments for the
Fund's account with brokers selected by the Subadviser. In providing
the Fund with investment management services, it is recognized that
the Subadviser will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of this
policy, the Subadviser may consider the financial responsibility,
research and investment information and other services provided by
brokers 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 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 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, 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
may be useful to the Subadviser in connection with the Subadviser's
services to other clients. Notwithstanding the foregoing, the Manager
acknowledges that the Subadviser may also be subject to requirements
by IMRO, and will comply with such requirements to the extent they
are not inconsistent with applicable federal and state laws and
regulations in the United States. At a minimum, the Subadviser must
comply with the laws of the United States, but may also choose to
comply with more stringent IMRO requirements if the Subadviser deems
necessary.
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
F-1(2)
under no obligation to, aggregate the securities or futures contracts
to be sold or purchased. 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. It is recognized that in some cases, this procedure
may adversely affect the price paid or received by the Fund or the
size of the position obtainable for, or disposed of by, the Fund.
(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 to such extent as
agreed from time to time between the Manager and the Subadviser.
(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, 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 each of the Fund's separate series
through quantitative and qualitative analysis and consultations with
such Subadviser, (ii) periodically make recommendations to the Fund's
Board as to whether the contract with one or more subadvisers should
be renewed, modified, or terminated and (iii) periodically report to
the Fund's Board regarding the results of its evaluation and
monitoring functions. Subadviser recognizes that its services may be
terminated or modified pursuant to this process.
(vii) The Subadviser shall have the power to vote, either in
person or by proxy, all securities in which the Subadviser Assets may
be invested from time to time, and shall not be required to seek or
take instructions from the Manager or the Fund or take any action
with respect thereto. If both the Subadviser and another entity
managing assets of the Fund have invested in the same security, the
Subadviser and such other entity will each have the power to vote its
pro rata share of the security.
(b) 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 Series required by Rule 31a-1 under the 1940 Act. The Subadviser
agrees that all records which it maintains for the Series are the property
of the Fund, however, nothing in this clause shall be interpreted to provide
the Manager or the Fund with any property right in any software used by the
Subadviser to maintain such records. 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 both during the
continuation of this Agreement and thereafter as may be required for the
Subadviser to conform to all applicable laws and regulations. The Subadviser
further agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
F-1(3)
(c) The Subadviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Advisers Act and other
applicable state and federal regulations.
(d) 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.
(e) Subject to the terms of this Agreement, the Subadviser is hereby
appointed the Manager's and the Fund's agent and attorney-in-fact for the
limited purposes of managing the Subadviser Assets, and executing account
documentation, agreements, contracts and other documents as the Subadviser
shall enter into with brokers, dealers, counterparties and other persons in
connection with its management of the Subadviser Assets. Subject to the
terms of paragraph 1(f) hereof, the Subadviser shall always act as agent of
the Manager and the Fund, not as principal.
(f) In the event of an administrative error made by the Subadviser in
the implementation of an investment decision properly taken by a fund
manager for the Fund ("Dealing Error"), as soon as reasonably practicable
after the identification of the Dealing Error and provided that the
transaction has not already settled, the Subadviser shall take all
appropriate action to ensure that the Fund is placed in the same position as
it would have been in had the Dealing Error not occurred. The Subadviser or
an associate may act as a principal in respect of a transaction for the Fund
in order to correct a Dealing Error. The Subadviser shall be responsible for
any loss and the Fund shall be entitled to any profit which may arise as a
result of this process.
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 pursuant to this Agreement, the Subadviser
will be entitled to the fee set out in the attached Schedule A. Such fee
will be computed daily and payable no later than the seventh (7th) business
day following the end of each calendar quarter, from the Manager or the
Fund, calculated at an annual rate based on the Subadviser Assets' average
daily net assets (as calculated by the custodian of the Fund), and subject
to any minimum fee specified in Schedule A. The method of determining net
assets of a Fund for purposes hereof shall be the same as the method of
determining net assets for purposes of establishing the offering and
redemption price of the shares of that Fund as described in a Fund's
Prospectus. If this Agreement shall be effective for only a portion of a
quarter, the aforesaid fee shall be prorated for the portion of such quarter
during which this Agreement is in effect.
4. The Subadviser shall not be responsible for the Fund's or Manager's
expenses, which shall include, but not be limited to, organizational and
offering expenses (which include out-of-pocket expenses, but not overhead or
employee costs of the Subadviser); expenses for legal, accounting and
auditing services; taxes and governmental fees; dues and expenses incurred
in connection with membership in investment company organizations; costs of
printing and distributing shareholder reports, proxy materials,
prospectuses, stock certificates and distribution of dividends; charges of
the Fund's custodians and sub-custodians, administrators and
sub-administrators, registrars, transfer agents, dividend disbursing agents
and dividend reinvestment plan agents; payment for portfolio pricing
services to a pricing agent, if any; registration and filing fees of the
SEC; expenses of registering or qualifying securities of the Fund for sale
in the various states; freight and other charges in connection with the
shipment of the Fund's portfolio securities; fees and expenses of
non-interested Directors/Trustees; salaries of shareholder relations
personnel; costs of shareholders meetings; insurance; interest; brokerage
costs; and litigation and other extraordinary or non-recurring expenses.
5. The Manager represents and warrants to the Subadviser as follows:
(a) The Manager is registered as an investment adviser under the
Advisers Act;
F-1(4)
(b) The Fund is registered as an investment company under the 1940 Act
and the Fund's shares are registered under the Securities Act of 1933, as
amended ("Securities Act");
(c) The Manager has filed a notice of exemption pursuant to Regulation
4.14 under the Commodity Exchange Act ("CEA") with the Commodity Futures
Trading Commission ("CFTC") and the National Futures Association ("NFA") or
is exempt from doing so;
(d) The Fund has filed a notice of exemption pursuant to Regulation 4.5
under the CEA with the CFTC and the NFA;
(e) The Manager is a limited liability company duly organized and
validly existing under the laws of the State of New York with the power to
own and possess its assets and carry on its business as it is now being
conducted;
(f) The Fund is a corporation duly organized and validly existing under
the laws of the State of New York with the power to own and posses its
assets and carry on its business as it is now being conducted;
(g) The execution, delivery and performance by the Manager of this
Agreement, the appointment of the Subadviser and the delegation to the
Subadviser of the duties and powers delegated to it under this Agreement,
are within the Manager's powers and have been duly authorized by all
necessary action on the part of its shareholders or managing unitholder, and
no action by or in respect of, or filing with, any governmental body, agency
or official is required on the part of the Manager for the execution,
delivery and performance by the Manager of this Agreement, and the
execution, delivery and performance by the Manager of this Agreement do not
contravene or constitute a default under (i) any provision of applicable
law, rule or regulation, (ii) the Manager's governing instruments, or
(iii) any agreement, judgment, injunction, order, decree or other instrument
binding upon the Manager;
(h) The Form ADV of the Manager previously provided to the Subadviser is
a true and complete copy of the form filed with the SEC and the information
contained therein is accurate and complete in all material respects and does
not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading;
(g) The Manager acknowledges that it received a copy of the Subadviser's
Form ADV prior to the execution of this Agreement; and
(h) The Manager and the Fund have duly entered into the Management
Agreement pursuant to which the Fund authorized the Manager to enter into
this Agreement.
All representations and warranties made by the Manager shall survive for the
duration of this Agreement and the Manager shall promptly notify the Subadviser
in writing upon becoming aware that any of the foregoing representations and
warranties are no longer true.
6. The Subadviser, each of its affiliates and all respective partners,
officers, directors and employees ("Affiliates") and each person, if any,
who within the meaning of the Securities Act controls the Subadviser
("Controlling Persons") shall not be liable for any error of judgment,
mistake of law 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 ("Disabling
Conduct"). In the absence of Disabling Conduct, the Subadviser, any of its
Affiliates and each of the Subadviser's Controlling Persons, if any, shall
not be subject to any liability to the Fund or the Manager, for any act or
omission in the case of, or connected with, rendering services hereunder or
for any liability that may be sustained in the purchase, holding or sale of
Subadviser Assets; provided, however, that nothing herein shall relieve the
Subadviser from
F-1(5)
any of its obligations under applicable law, including, without limitation,
the federal and state securities laws and the CEA.
Furthermore, the Subadvisor shall not be subject to liability to the Fund or
the Manager for any act or omission in the course of, or connected with, the
Manager or any other advisors or subadvisors rendering services under the
terms of any other prior investment advisory agreements.
7. 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' 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.
8. Nothing in this Agreement shall 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.
9. Manager agrees to provide Subadviser with copies of the Fund's
Articles of Incorporation, Bylaws, Code of Ethics, and most recent
Prospectus and Statement of Additional Information on or before the date of
this Agreement. Furthermore, during the term of this Agreement, the Manager
also agrees to furnish the Subadviser at its principal office (or such other
address as notified to the Manager by the Subadviser) 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.
10. Any notice that is required to be given by the parties to each other
under the terms of this Agreement shall be in writing, delivered, or mailed
postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Gartmore Global Partners
101 South Tryon Street
Charlotte, North Carolina 28255
Attention:
Facsimile:
(b) If to the Manager:
Prudential Investments Fund Management LLC
Prudential Plaza
751 Broad Street
Newark, New Jersey 07102
Attention: President/Secretary
Phone: (973)367-7525
Facsimile: (973) 367-6349
11. This Agreement may be amended by mutual written consent, but the
consent of the Fund must be obtained in conformity with the requirements of
the 1940 Act.
F-1(6)
12. This Agreement shall be governed by the laws of the State of New York.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, all of which shall together constitute
one and the same instrument.
14. If any provision of this Agreement shall be held or made invalid by a
court decision or applicable law, the remainder of the Agreement shall not
be affected adversely and shall remain in full force and effect.
15. The Subadviser may effect transactions under the Agreement with or
through the agency of a person who provides services under a Soft Commission
Agreement, as defined in the rules of IMRO, and will report such
transactions to the Manager upon request. All such transactions must comply
with applicable federal and state regulations in the United States and any
mutually agreed upon policies and procedures. The Manager shall have no
responsibility for the Subadviser's activities under the rules of IMRO.
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
GARTMORE GLOBAL PARTNERS
By:
---
F-1(7)
SCHEDULE A
AVERAGE DAILY NET ASSETS MANAGED ADVISORY FEES
UNDER THIS AGREEMENT ($MILLION) (PER ANNUM)
- -------------------------------- -------------
0 -- 50..................................................... 0.60%
50 -- 100................................................... 0.50%
100 -- 200.................................................. 0.40%
over 200.................................................... 0.30%
subject to a minimum fee of $250,000 per annum.
F-1(8)
EXHIBIT F-2
PRUDENTIAL PACIFIC GROWTH FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 17th day of January, 2001 between Prudential
Investments Fund Management LLC ("PIFM" or the "Manager") and Jardine Fleming
International Management Inc. (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated July 16,
1992 (the "Management Agreement"), with Prudential Pacific Growth Fund, Inc.
(the "Fund"), a Maryland corporation and a diversified, 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 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, the Subadviser is licensed by the Hong Kong Securities and Futures
Commission and is registered as an investment adviser.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors of the Fund, the Subadviser shall manage such portion of the
assets of the Fund as the Manager shall direct (the "Assets") and shall
manage the composition of the Assets, including the purchase, retention and
disposition thereof, in accordance with the Fund's investment objectives,
policies and restrictions as stated in the Fund's prospectus(es) 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, in relation to the Assets, 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, By-Laws and Prospectus of the Fund and
with the written instructions and directions of the Manager and of
the Board of Directors of the Fund delivered to the Subadviser, and
will use reasonable efforts to manage the Assets so that the Fund
will qualify, and continue to qualify, as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended, and regulations issued thereunder, except as may be
authorized to the contrary by Board of Directors of the Fund. For the
avoidance of doubt, investment objectives, policies and direction
should not be deemed to have been breached as a result of changes
beyond the Subadviser's control (including but not limited to change
in price/value of assets). 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 Assets to be purchased
or sold by the Fund, as applicable, 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 may direct from time
to time. In providing the Fund with investment advice, it is
recognized that the Subadviser will give primary consideration to
securing the most favorable price and efficient
F-2(1)
execution. Within the framework of this policy, the Subadviser may
consider the financial responsibility, research and investment
information and other services provided by brokers, dealers or
futures commission merchants who may effect or be a party to any such
transaction or other transactions to which the Subadviser's other
clients may be a party. Consistent with its fiduciary duty to the
Fund, the Subadviser and its associates shall have a discretion to
effect, without prior reference to the Manager, either as principal
or otherwise, transactions in which the Subadviser or any of its
associates has directly or indirectly a material interest or a
relationship of any description with another party which may involve
a potential conflict with the Subadviser's duty to the Manager or the
Fund. Neither the Subadviser nor its associates shall be liable to
account to the Manager or the Fund for any profit, commission or
remuneration made or received from or by reason of such transactions
or any connected transactions, nor will the Subadviser's fees be
abated thereby unless otherwise provided. 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 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 such periodic and special reports as the Directors
may reasonably request. The Subadviser shall make reasonably
available its employees and officers for consultation with any of the
Directors or officers or employees of the Fund with respect to any
matter discussed herein, including, without limitation, the valuation
of the Fund's securities.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's Assets, and shall provide the Manager with
such information upon request of the Manager.
(vi) The investment management services provided by the
Subadviser hereunder are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others.
Conversely, Subadviser and Manager understand and agree that if the
Manager manages the Fund in a "manager-of-managers" style, the
Manager will, among other things,
F-2(2)
(i) continually evaluate the performance of the Subadviser to each of
the Fund's separate series through quantitative and qualitative
analysis and consultations with such Subadviser (ii) periodically
make recommendations to the Fund's Board as to whether the contract
with one or more subadvisers should be renewed, modified, or
terminated and (iii) periodically report to the Fund's Board
regarding the results of its evaluation and monitoring functions.
Subadviser recognizes that its services may be terminated or modified
pursuant to this process.
(vii) The Subadviser may with the prior written consent of the
Manager delegate any of its functions, powers, discretions,
privileges and duties under the terms of this Agreement to any of its
associates (which shall have full powers of sub-delegation) and may
provide information about the Manager and the Fund to any such
associates.
(viii) If the Subadviser considers that any investment objectives
and policies and/or instructions received in relation thereto may
not, from a compliance or system viewpoint, be capable of being fully
observed, it shall promptly advise the Manager of the same with a
view to arrive at a mutually acceptable modification to such
investment objectives and policies. Before such modification to such
investment objectives and policies and/or instructions is agreed
between the parties, the Subadviser shall use its best endeavours to
comply with such investment objectives and policies and/or
instructions to the fullest extent that the Subadviser in its opinion
considers possible.
(ix) The Manager shall be responsible for the management of the
its affairs or the affairs of the Fund for tax purposes.
(x) For the avoidance of doubt, the Subadviser shall not be
deemed to have breached its duty of confidentiality owing to the
Manager if disclosures of information is required in order to
facilitate the Subadviser carrying out its duties hereunder or is
required by law or regulations or is requested by any investment
exchanges or statutory, regulatory or governmental bodies having
jurisdiction over the Subadviser or any of its associates.
(xi) The Subadviser is authorized to rely on, may act on and
treat as fully authorized by the Manager, any instruction or
communication which purports to have been given (and which is
accepted by the Subadviser in good faith as having been given) by or
on behalf of the persons notified by the Manager from time to time to
the Subadviser as being authorized to instruct it in respect of the
Fund and, by whatever means transmitted and whether or not in writing
and, unless the Subadviser shall have received written notice to the
contrary, whether or not the authority of such person shall have been
terminated. The Subadviser and its associates may use voice recording
procedures in connection with all communications and any such voice
record retained by the Subadviser and its associates will constitute
conclusive evidence of such communications.
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors or officers of the
Fund to serve in the capacities in which they are elected. Services to be
furnished by the Subadviser under this Agreement may be furnished through
the medium of any of such directors, officers or employees.
(c) The Subadviser shall keep the 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
F-2(3)
periods prescribed by Rule 31a-2 of the Securities and Exchange Commission
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 as the Manager may advise
in writing from time to time.
(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.
(f) The Subadviser will inform the Manager in writing within a
reasonable time of any changes in the directors of the Subadviser, and of
material changes to the information provided to the Manager under this
Agreement.
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. The Manager warrants that
the information set out in or provided pursuant to Schedule I hereto (the
"Client Information Statements") and any other information provided from
time to time to the Adviser are true, complete and accurate. The Manager
agrees to promptly advise the Adviser in writing of any change to the
information set out in the Client Information Statements or in this
Agreement. The Manager further confirms that it has notice of the provisions
and the risk disclosure statement as set out in Schedule II hereto and
agrees to be bound by the terms thereof.
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation
therefore, 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 III. The Subadviser shall be responsible for its own
expenses in performing its duties hereunder but shall not be responsible for
the expenses of the Fund. Without limiting the generality of the foregoing,
the Subadviser shall not be responsible for brokerage commissions, transfer
taxes or fees or custody fees of the Fund.
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. The Manager agrees to fully indemnify the
Subadviser on demand from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (other than those 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) which may be imposed on,
incurred by, or asserted against the Subadviser in performing its
obligations or duties hereunder.
The Subadviser agrees to fully indemnify the Manager on demand from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever resulting from the willful misfeasance, negligence, bad
faith or reckless disregard of the obligations or duties hereunder on the
part of the Subadviser, its directors, officers or employees.
5. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940
Act; provided, however, that this Agreement may be terminated by the Fund at
any time, without the payment of any penalty, by the Board of Directors of
the Fund or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, or by the
F-2(4)
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. Section 4 shall survive termination of this Agreement.
Further, termination will not in any event affect accrued rights or existing
commitments.
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.
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: /s/ ROBERT F. GUNIA
--------------------------------------------
Robert F. Gunia
EXECUTIVE VICE PRESIDENT
JARDINE FLEMING INTERNATIONAL MANAGEMENT, INC.
By: /s/ MARK E. B. WHITE
--------------------------------------------
Mark E. B. White
DIRECTOR
F-2(5)
SCHEDULE I
CLIENT INFORMATION STATEMENTS
1 Name(s) of the client (i.e. the Manager) Prudential Investments Fund Management LLC
2 Nature of entity (i.e. Private or public
limited company, etc.) Registered Investment Adviser to Open-End
Management Companies (mutual funds)
3 Nature of the Manager's business Registered Investment Adviser
4 Country of incorporation/establishment New York limited liability company
5 Registered office in country of
incorporation/ establishment
Address
100 Mulberry Street
Gateway Center Three, 14th Floor
Newark, New Jersey USA 07102
Attention: Secretary
Telephone no. (973) 802-2991
Fax no. (973) 367-8663
Telex no.
6 Principal place of business in Hong Kong
(if any) Address
Telephone no.
Fax no.
Telex no.
7 Where applicable, the individual(s) who is/are the ultimate beneficial owner(s) of the
share capital of the Manager, including a beneficiary holding an interest through a
nominee or trust:
Name Prudential Pacific Growth Fund, Inc.
100 Mulberry Street
Address Gateway Center Three, 14th Floor
Newark, New Jersey USA 07102
Attention: President
8 Will the account be operated under Power of
Attorney? Yes / No IF YES, PLEASE FURNISH SIGNED
POWER OF ATTORNEY.
F-2(6)
9 Authorized signature(s) to operate the
account
Any one of the following individuals is authorized on behalf of the Manager to give oral
and written instructions (i) in relation to the operation of the account maintained by
the Manager with the Subadviser and (ii) to effect purchases, sales, holdings and other
dealings in securities (including futures contracts and option contracts), funds or
other investments:--
NAME (ENGLISH AND, WHERE APPLICABLE, CHINESE) CONTACT TELEPHONE NUMBER SIGNATURE
--------------------------------------------- ------------------------ -------------------
Grace Torres (973) 367-7503 /s/ Grace Torres
Jeff Scarbel (973) 367-7496 /s/ Jeff Scarbel
Jack Benintende (973) 367-1595 /s/ Jack Benintende
Alma Mercado (973) 367-7483 /s/ Alma Mercado
Sadiq Peshimam' (973) 367-1220 Sadiq Peshimam
10 Please dispatch trading confirmations to:--
Name Attention: Ellen Meigs & John Colvani,
Prudential Group
State Street Bank & Trust
Address 1 Heritage Drive, Quincy MA, 02171
Joseph Palmer Building, 4th Floor
Telephone no. (617) 985-3118 Fax no. (617)
985-9797
Telex no.
11 Documentation. Please provide the following:
x Certified copies of the Memorandum and Articles of Association, Certificate of
Incorporation and Business Registration Certificate or other constitutional documents.
x A certified copy of the board resolution relating to the execution of this Agreement
and the appointment of authorized signatories;
N/A A certified copy of the client's latest corporate record filed with the Company
Registry at the place of incorporation;
x A copy of the audited accounts for the last financial year;
See # 9 A list of signatories authorized to provide instructions on the account together
with their relevant specimen signature cards and contact details (if not given above in
section 9).
F-2(7)
SCHEDULE II
RISK DISCLOSURE STATEMENTS
1 In respect of transactions in securities, please note that:
The price of securities can and does fluctuate, and any individual
security may experience upward or downward movements, and may even become
valueless. There is an inherent risk that losses may be incurred rather than
profit made as a result of buying and selling securities.
2 In respect of transactions involving futures contracts or options,
please note that:
The risk of loss in trading futures contracts or options can be
substantial. In some circumstances, you may sustain losses in excess of your
initial margin funds. Placing contingent orders, such as "stop loss" or
"stop-limit" orders, will not necessarily achieve the desired results.
Market conditions may make it impossible to execute such orders. You may be
called upon at short notice to deposit additional margin funds. If the
required funds are not provided within the prescribed time, your position
will be liquidated. You will remain liable for any resulting deficit in your
account. You should therefore study and understand futures contracts and
options before you trade and carefully consider whether such trading is
suitable in the light of your own financial position and investment
objectives.
3 In respect of transactions in securities traded on the Growth Enterprise
Market of The Stock Exchange of Hong Kong Limited, please note that:
(a) The Growth Enterprise Market has been established as a market
designed to accommodate companies to which a high investment risk may be
attached. In particular, companies may list on the Growth Enterprise Market
with neither a track record of profitability nor any obligation to forecast
future profitability. There may be risks arising out of the emerging nature
of companies listed on the Growth Enterprise Market and the business sectors
or countries in which the companies operate.
(b) There are potential risks of investing in such companies and you
should make the decision to invest only after due and careful consideration.
The greater risk profile and other characteristics of the Growth Enterprise
Market mean that it is a market more suited to professional and other
sophisticated investors.
(c) Given the emerging nature of companies listed on the Growth
Enterprise Market, there is a risk that securities traded on the Growth
Enterprise Market may be susceptible to higher market volatility compared to
securities traded on the Main Board and no assurance is given that there
will be a liquid market in the securities traded on the Growth Enterprise
Market.
(d) The principal means of information dissemination on the Growth
Enterprise Market is publication on the internet website operated by the
Exchange. Companies listed on the Growth Enterprise Market are not generally
required to issue paid announcements in gazetted newspapers. Accordingly,
you need to have access to up-to-date information on the Growth Enterprise
Market-listed companies as published on the Growth Enterprise Market
website.
(e) This risk disclosure statement does not purport to disclose all the
risks and other significant aspects of the Growth Enterprise Market. You
should undertake your own research and study on the trading of securities on
the Growth Enterprise Market before commencing any trading activities.
You should seek independent professional advice if you are uncertain of or
have not understood any aspect of this risk disclosure statement or the nature
and risks involved in trading of securities on the Growth Enterprise Market.
F-2(8)
SCHEDULE III
INVESTMENT ADVISORY FEE
The compensation to be received by the Subadviser under the Subadvisory
Agreement is as follows:
DAILY NET ASSETS FEE
- ---------------- ---
First $250 million............................ .50 of 1%
Over $250 million............................. .45 of 1%
PIFM will pay the Subadviser the subadvisory fee from the management fee
that the Fund pays to PIFM under its Management Agreement.
The investment advisory fee is based on aggregate assets under management of
Prumerica Pacific Growth Fund and Prudential Pacific Growth Fund, Inc.
F-2(9)
EXHIBIT F-3
[FUND]
FORM OF SUBADVISORY AGREEMENT
Agreement made as of this day of , 2001, between Prudential
Investments Fund Management 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 [Massachusetts
business trust/Maryland corporation] and a diversified, 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 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
September 7, 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, 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/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, cooperate 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 Subadviser may
consider the financial responsibility, research and investment
information and other services provided by brokers, dealers or
futures commission merchants who may
F-3(1)
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 "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.
(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
F-3(2)
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.
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
F-3(3)
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-3(4)
SCHEDULE A
Prudential World Fund, Inc.
Prudential Global Growth Fund............................. 0.375%
F-3(5)
EXHIBIT F-4
FORM OF AMENDED SUBADVISORY AGREEMENT WITH
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL INTERNATIONAL VALUE FUND
SUBADVISORY AGREEMENT
Agreement made as of this day of , 2001 between Prudential
Investments Fund Management LLC ("PIFM" or the "Manager") and Bank of Ireland
Asset Management (U.S.) Limited (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated
, 2001 (the "Management Agreement"), with Prudential World
Fund, Inc., a Maryland corporation (the "Company"), on behalf of the Prudential
International Value Fund (the "Fund"), a diversified, 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 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
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors of the Company, 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(es) (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, By-Laws and Prospectus of the Company and
with the instructions and directions of the Manager and of the Board
of Directors of the Company, 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, as amended, 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 may
direct from time to time. In providing the Fund with investment
supervision, it
F-4(1)
is recognized that the Subadviser will give primary consideration to
securing the most favorable price and efficient execution. Within the
framework of this policy, the Subadviser may consider the financial
responsibility, research and investment information and other
services provided by brokers, dealers or futures commission merchants
who may effect or be a party to any such transaction or other
transactions to which the Subadviser's other clients may be a party.
It is understood that Prudential Securities Incorporated (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 Company's Board of
Directors from time to time with respect to the extent and
continuation of this practice. It is understood that the services
provided by such brokers or futures commission merchants may be
useful to the Subadviser in connection with the Subadviser's services
to other clients.
On occasions when the Subadviser deems the purchase or sale of a
security or futures contract to be in the best interest of the 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 Company's
Board of Directors such periodic and special reports as the Directors
may reasonably request. The Subadviser shall make reasonably
available its employees and officers for consultation with any of the
Directors or officers or employees of the Fund with respect to any
matter discussed herein, including, without limitation, the valuation
of the Fund's securities.
(v) The Subadviser shall provide the 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, 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 through quantitative and qualitative
analysis and consultations with such Subadviser (ii) periodically
make recommendations to the Company's Board as to whether the
contract with one or more subadvisers should be renewed, modified, or
terminated and (iii) periodically report to the Company's Board
regarding the results of its evaluation and monitoring functions.
F-4(2)
Subadviser recognizes that its services may be terminated or modified
pursuant to this process.
(b) The Subadviser shall authorize and permit any of its
[Directors/Trustees], officers and employees who may be elected as Directors
or officers of the Company 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/Trustees],
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 of the Commission 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
Company, on behalf of the Fund, at any time, without the payment of any
penalty, by the Board of Directors of the Company 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, officer or employee of the Company or 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-4(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
BANK OF IRELAND ASSET
MANAGEMENT (U.S.) LIMITED
By:
--------------------------------------------
F-4(4)
EXHIBIT A
COMPENSATION SCHEDULE
Annual fee payable to the Subadviser as a percentage of average daily net
assets of the Fund managed by the Subadviser:
0.45% on the first $50 million of average daily net assets;
0.40% on the next $50 million;
0.30% on the next $500 million;
0.28% on the next $200 million; and
0.27% on the Fund's assets managed by the Subadviser over $800 million.
F-4(5)
EXHIBIT G-1
[FUND]
FORM OF 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, 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(1)
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/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 securities and futures contracts for the Fund to brokers or futures
commission merchants who provide such research and analysis, 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(2)
(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/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(3)
(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(4)
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(5)
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(6)
SCHEDULE A
Prudential Europe Growth Fund, Inc......................... 0.75%
Prudential Pacific Growth Fund, Inc........................ 0.75%
Prudential Real Estate Securities Fund..................... 0.75%
Prudential World Fund, Inc.
Prudential Global Growth Fund............................ 0.75%
Prudential International Value Fund...................... 1.00%
Prudential Jennison International Growth Fund............ 0.85% up to $3 million;
0.75% of assets between $3 million
and $1.5 billion;
and 0.70% of assets over
$1.5 billion
G-1(7)
EXHIBIT G-2
FORM OF AMENDED SUBADVISORY AGREEMENT WITH PIC/JENNISON
PRUDENTIAL FUND
Subadvisory Agreement
Agreement made as of this day of , 2001 between Prudential
Investments Fund Management LLC ("PIFM" or the "Manager") and [Prudential
Investment Corporation/Jennison Associates LLC] (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated
, 2001 (the "Management Agreement"), with Prudential _______________
Fund (the "Fund"), a [Maryland corporation/Delaware business trust] and a
[non]diversified, 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 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
, , 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
[Trustees/Directors] 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(es) (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/Declaration of Trust], By-Laws and Prospectus of the Fund and
with the instructions and directions of the Manager and of the Board of
[Trustees/ Directors] 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, as amended, 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 Subadviser may consider the financial responsibility, research
and investment
G-2(1)
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, 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 through quantitative and
qualitative analysis and consultations with such Subadviser
(ii) periodically make recommendations to the Fund's Board as to whether the
contract with one or more subadvisers should be renewed, modified, or
terminated and (iii) periodically report to the Fund's Board regarding the
results of its evaluation and monitoring functions. Subadviser recognizes
that its services may be terminated or modified pursuant to this process.
(b) The Subadviser shall authorize and permit any of its
[Directors/Trustees], 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/Trustees], 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
G-2(2)
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 of the Commission 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.
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.
G-2(3)
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
[PRUDENTIAL INVESTMENTS
CORPORATION/JENNISON ASSOCIATES LLC]
By: -----------------------------------------
G-2(4)
EXHIBIT A
COMPENSATION SCHEDULE FOR FUNDS ADVISED BY PIC/JENNISON
ANNUAL FEE
PAYABLE TO THE
SUBADVISER AS
A PERCENTAGE
OF AVERAGE
FUND DAILY NET ASSETS
- ---- ----------------
Prudential Real Estate Securities Fund........ 0.375%
Prudential Jennison International Growth Fund
(a series of Prudential World
Fund, Inc.)................................. 0.60% of the first $300 million of Fund assets;
0.50% of the first $1.5 billion of Fund assets; and
0.45% of Fund assets in excess of $1.5 billion.
G-2(5)
EXHIBIT H
AMENDMENTS TO FUNDAMENTAL
INVESTMENT RESTRICTIONS AND POLICIES
The following chart compares each Fund's fundamental investment restrictions
and policies as they currently exist to the proposed amended provisions. For
more information about these changes, please refer to Proposals 8(a) through
8(g) in the Proxy Statement.
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
PRUDENTIAL EUROPE GROWTH FUND, INC.
PURCHASING SECURITIES ON MARGIN Eliminated.
The Fund may not: Purchase securities on
margin (but the Fund may obtain short-term
credits as 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.
SHORT SALES OF SECURITIES Eliminated.
The Fund may not: Make short sales of
securities 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. Short sales "against the box" are not
subject to this limitation.
ISSUING SENIOR SECURITIES, BORROWING MONEY ISSUING SENIOR SECURITIES, BORROWING MONEY
OR PLEDGING ASSETS OR PLEDGING ASSETS
The Fund may not: Issue senior securities, The Fund may not: Issue senior securities or
borrow money or pledge its assets, except borrow money or pledge its assets, except as
that the Fund may borrow from banks up to permitted by the 1940 Act Laws,
33 1/3% of the value of its total assets Interpretations and Exemptions. For purposes
(calculated when the loan is made) for of this restriction, the purchase or sale of
temporary, extraordinary or emergency securities on a when- issued or delayed
purposes or for the clearance of delivery basis, reverse repurchase
transactions. The Fund may pledge up to agreements, dollar rolls, short sales,
33 1/3% of the value of its total assets to derivative and hedging transactions such as
secure such borrowings. For purposes of this interest rate swap transactions, and
restriction, the purchase or sale of collateral arrangements with respect
securities on a when-issued or delayed thereto, and transactions similar to any of
delivery basis, forward foreign currency the foregoing and collateral arrangements
exchange contracts and collateral with respect thereto, and obligations of the
arrangements relating thereto, and Fund to [Directors/Trustees] pursuant to
collateral arrangements with respect to deferred compensation arrangements are not
futures contracts and options thereon and deemed to be a pledge of assets or the
with respect to the writing of options and issuance of a senior security.
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.
H-1
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
PURCHASING SECURITIES OF A SINGLE ISSUER OR FUND DIVERSIFICATION
SINGLE INDUSTRY The Fund may not: Purchase the securities of
The Fund may not: Purchase any security any issuer if, as a result, the Fund would
(other than obligations of the U.S. fail to be a diversified company within the
Government, its agencies or meaning of the 1940 Act, and the rules and
instrumentalities) if as a result: (i) with regulations promulgated thereunder, as each
respect to 75% of the Fund's total assets, may be amended from time to time except to
more than 5% of the Fund's total assets the extent that the Fund may be permitted to
(determined at the time of investment) would do so by exemptive order, SEC release,
then be invested in securities of a single no-action letter or similar relief or
issuer, or (ii) 25% or more of the Fund's interpretations (collectively, the "1940 Act
total assets (determined at the time of the Laws, Interpretations and Exemptions").
investment) would be invested in a single
industry.
FUND CONCENTRATION
The Fund may not: 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.
BUYING OR SELLING REAL ESTATE OR INTERESTS BUYING AND SELLING REAL ESTATE
IN REAL ESTATE The Fund may not: Buy or sell real estate,
The Fund may not: Buy or sell real estate or except that investment in securities of
interests in real estate, except that the issuers that invest in real estate and
Fund may purchase and sell securities which investments in mortgage-backed securities,
are secured by real estate, securities of mortgage participations or other instruments
companies which invest or deal in real supported or secured by interests in real
estate and publicly traded securities of estate are not subject to this limitation,
real estate investment trusts. The Fund may and except that the Fund may exercise rights
not purchase interests in real estate relating to such securities, including the
limited partnerships which are not readily right to enforce security interests and to
marketable. hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
H-2
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
BUYING OR SELLING COMMODITIES OR COMMODITY BUYING AND SELLING COMMODITIES AND COMMODITY
CONTRACTS CONTRACTS
The Fund may not: Buy or sell commodities or The Fund may not: Buy or sell physical
commodity contracts, except that the Fund commodities or contracts involving physical
may purchase and sell financial futures commodities. The Fund may purchase and sell
contracts and options thereon. (For purposes (i) derivative, hedging and similar
of this restriction, futures contracts on instruments such as financial futures
currencies and on securities indices and contracts and options thereon, and
forward foreign currency exchange contracts (ii) securities or instruments backed by, or
are not deemed to be commodities or the return from which is linked to, physical
commodity contracts.) 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.
ACTING AS AN UNDERWRITER No change.
The Fund may not: 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.
INVESTING TO EXERCISE CONTROL OR MANAGEMENT Made non-fundamental.
The Fund may not: Make investments for the
purpose of exercising control or management.
INVESTING IN SECURITIES OF OTHER INVESTMENT Made non-fundamental.
COMPANIES
The Fund may not: 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.
INVESTING IN INTERESTS IN OIL, GAS OR OTHER Eliminated.
MINERAL EXPLORATION OR DEVELOPMENT PROGRAMS
The Fund may not: Invest in interests in
oil, gas
H-3
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
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.
MAKING LOANS Eliminated.
The Fund may not: Make loans, except through
(i) repurchase agreements and (ii) loans of
portfolio securities limited to 30% of the
Fund's total assets.
PURCHASING OUTSTANDING VOTING SECURITIES OF Eliminated.
ANY ONE ISSUER
The Fund may not: Purchase more than 10% of
all outstanding voting securities of any one
issuer.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
PURCHASING SECURITIES ON MARGIN Eliminated.
The Fund may not: Purchase securities on
margin (but the Fund may obtain such
short-term credits as 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.
SHORT SALES OF SECURITIES Eliminated.
The Fund may not: Make short sales of
securities 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. Short sales "against-the-box" are not
subject to this limitation.
ISSUING SENIOR SECURITIES, BORROWING MONEY ISSUING SENIOR SECURITIES, BORROWING MONEY
OR PLEDGING ASSETS OR PLEDGING ASSETS
The Fund may not: Issue senior securities, The Fund may not: Issue senior securities or
borrow money or pledge its assets, except borrow money or pledge its assets, except as
that the Fund may borrow from banks up to permitted by the 1940 Act Laws,
20% of the value of its total assets Interpretations and Exemptions. For purposes
(calculated when the loan is made) for of this restriction, the purchase or sale of
temporary, extraordinary or emergency securities on a when- issued or delayed
purposes or for the clearance of delivery basis, reverse repurchase
transactions. The Fund may pledge up to 20% agreements, dollar rolls, short sales,
of the value of its total assets to secure derivative and hedging transactions such as
such borrowings. For purposes of this interest rate swap transactions, and
restriction, the purchase or sale of collateral arrangements with respect
securities on a when-issued or delayed thereto, and transactions similar to any of
delivery basis, forward foreign the foregoing and
H-4
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
currency exchange contracts and collateral collateral arrangements with respect
and collateral arrangements relating thereto, and obligations of the Fund to
thereto, and collateral arrangements with [Directors/Trustees] pursuant to deferred
respect to futures contracts and options compensation arrangements are not deemed to
thereon and with respect to the writing of be a pledge of assets or the issuance of a
options and obligations of the Fund to senior security.
Directors pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets or the issuance of a senior
security.
PURCHASING SECURITIES OF A SINGLE ISSUER OR FUND DIVERSIFICATION
A SINGLE INDUSTRY The Fund may not: Purchase the securities of
The Fund may not: Purchase any security any issuer if, as a result, the Fund would
(other than obligations of the U.S. fail to be a diversified company within the
Government, its agencies or meaning of the 1940 Act, and the rules and
instrumentalities) if as a result: (i) with regulations promulgated thereunder, as each
respect to 75% of the Fund's total assets, may be amended from time to time except to
more than 5% of the Fund's total assets the extent that the Fund may be permitted to
(determined at the time of investment) would do so by exemptive order, SEC release,
then be invested in securities of a single no-action letter or similar relief or
issuer, or (ii) 25% or more of the Fund's interpretations (collectively, the "1940 Act
total assets (determined at the time of the Laws, Interpretations and Exemptions").
investment) would be invested in a single
industry.
BUYING OR SELLING REAL ESTATE OR INTERESTS BUYING AND SELLING REAL ESTATE
IN REAL ESTATE The Fund may not: Buy or sell real estate,
The Fund may not: Buy or sell real estate or except that investment in securities of
interests in real estate, except that the issuers that invest in real estate and
Fund may purchase and sell securities which investments in mortgage-backed securities,
are secured by real estate, securities of mortgage participations or other instruments
companies which invest or deal in real supported or secured by interests in real
estate and publicly traded securities of estate are not subject to this limitation,
real estate investment trusts. The Fund may and except that the Fund may exercise rights
not purchase interests in real estate relating to such securities, including the
limited partnerships which are not readily right to enforce security interests and to
marketable. hold real estate acquired by reason of such
enforcement until that real estate can be
liquidated in an orderly manner.
BUYING OR SELLING COMMODITIES OR COMMODITY BUYING AND SELLING COMMODITIES AND COMMODITY
CONTRACTS CONTRACTS
The Fund may not: Buy or sell commodities or The Fund may not: Buy or sell physical
commodity contracts, except that the Fund commodities or contracts involving physical
may purchase and sell financial futures commodities. The Fund may purchase and sell
contracts and options thereon. (For purposes (i) derivative, hedging and similar
of this restriction, futures contracts on instruments such as financial futures
currencies and on securities indices and contracts and options thereon, and
forward foreign currency exchange contracts (ii) securities or instruments backed by, or
are not deemed to be commodities or the return from which is linked to, physical
commodity contracts.) 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
H-5
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
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.
ACTING AS AN UNDERWRITER No change.
The Fund may not: 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."
INVESTING TO EXERCISE CONTROL OR MANAGEMENT Made non-fundamental.
The Fund may not: Make investments for the
purpose of exercising control or management.
INVESTING IN SECURITIES OF OTHER INVESTMENT Made non-fundamental.
COMPANIES
The Fund may not: 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.
INVESTING IN INTERESTS IN OIL, GAS OR OTHER Eliminated.
MINERAL EXPLORATION OR DEVELOPMENT PROGRAMS
The Fund may not: 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.
MAKING LOANS Eliminated.
The Fund may not: Make loans, except through
(i) repurchase agreements and (ii) loans of
portfolio securities limited to 30% of the
Fund's total assets.
PURCHASING OUTSTANDING VOTING SECURITIES OF Eliminated.
ANY ONE ISSUER
H-6
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
The Fund may not: Purchase more than 10% of
all outstanding voting securities of any one
issuer.
PRUDENTIAL REAL ESTATE SECURITIES FUND
PURCHASING SECURITIES ON MARGIN Eliminated.
The Fund may not: Purchase securities on
margin (but the Fund may obtain such short-
term credits as 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.
SHORT SALES OF SECURITIES Eliminated.
The Fund may not: Make short sales of
securities 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. Short sales "against-the-box" are not
subject to this limitation.
ISSUING SENIOR SECURITIES, BORROWING MONEY ISSUING SENIOR SECURITIES, BORROWING MONEY
OR PLEDGING ASSETS OR PLEDGING ASSETS
The Fund may not: Issue senior securities, The Fund may not: Issue senior securities or
borrow money or pledge its assets, except borrow money or pledge its assets, except as
that the Fund may borrow from banks up to permitted by the 1940 Act Laws,
20% of the value of its total assets Interpretations and Exemptions. For purposes
(calculated when the loan is made) for of this restriction, the purchase or sale of
temporary, extraordinary or emergency securities on a when- issued or delayed
purposes or for the clearance of delivery basis, reverse repurchase
transactions. The Fund may pledge up to 20% agreements, dollar rolls, short sales,
of the value of its total assets to secure derivative and hedging transactions such as
such borrowings. For purposes of this interest rate swap transactions, and
restriction, the purchase or sale of collateral arrangements with respect
securities on a when-issued or delayed thereto, and transactions similar to any of
delivery basis, foreign currency forward the foregoing and collateral arrangements
contracts and collateral arrangements with respect thereto, and obligations of the
relating thereto, and collateral Fund to [Directors/Trustees] pursuant to
arrangements with respect to futures deferred compensation arrangements are not
contracts and options thereon and with deemed to be a pledge of assets or the
respect to the writing of options and issuance of a senior security.
obligations of the Fund to Trustees pursuant
to deferred compensation arrangements are
not deemed to be a pledge of assets subject
to this restriction.
PURCHASING SECURITIES OF A SINGLE INDUSTRY FUND CONCENTRATION
The Fund may not: Purchase any security The Fund may not: Purchase any security if
(other than obligations of the U.S. as a result 25% or more of the Fund's total
government, its assets
H-7
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
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
The Fund does not consider real estate securities issued or guaranteed by the U.S.
investment trusts (REITs) an "industry" for government, its agencies or
purposes of this investment restriction. The instrumentalities, or to real estate
Fund will concentrate (that is, invest more securities, including real estate investment
than 25% of its total assets) in securities trusts ("REITs"). The Fund will concentrate
of real estate companies, principally REITs. its investments (i.e., will invest at least
25% of its total assets under normal
circumstances) in real estate securities,
including REITs.
BUYING OR SELLING REAL ESTATE OR INTERESTS BUYING AND SELLING REAL ESTATE
IN REAL ESTATE The Fund may not: Buy or sell real estate,
The Fund may not: Buy or sell real estate or except that investment in securities of
interests in real estate, except that the issuers that invest in real estate and
Fund may purchase and sell securities which investments in mortgage-backed securities,
are secured by real estate, securities of mortgage participations or other instruments
companies which invest or deal in real supported or secured by interests in real
estate and publicly traded securities of estate are not subject to this limitation,
real estate investment trusts. 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.
BUYING OR SELLING COMMODITIES OR COMMODITY BUYING AND SELLING COMMODITIES AND COMMODITY
CONTRACTS CONTRACTS
The Fund may not: Buy or sell commodities or The Fund may not: Buy or sell physical
commodity contracts, except that the Fund commodities or contracts involving physical
may purchase and sell financial futures commodities. The Fund may purchase and sell
contracts and options thereon, and foreign (i) derivative, hedging and similar
currency 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.
ACTING AS AN UNDERWRITER No change.
The Fund may not: Act as underwriter except
to the extent that, in connection with the
disposition of portfolio securities, it may
be
H-8
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
deemed to be an underwriter under certain
federal securities laws.
INVESTING TO EXERCISE CONTROL OR MANAGEMENT Made non-fundamental.
Make investments for the purpose of
exercising control or management.
INVESTING IN SECURITIES OF OTHER INVESTMENT Made non-fundamental.
COMPANIES
Invest in securities of other non-affiliated
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.
MAKING LOANS Eliminated.
Make loans, except through (a) repurchase
agreements and (b) loans of portfolio
securities limited to 33 1/3% of the Fund's
total assets.
PURCHASING OUTSTANDING VOTING SECURITIES OF Eliminated.
ANY ONE ISSUER
Purchase more than 10% of all outstanding
voting securities of any one issuer.
H-9
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
PURCHASING SECURITIES ON MARGIN Eliminated.
The Fund may not: Purchase securities on
margin (but Global Growth Series may obtain
such short-term credits as may be necessary
for the clearance of transactions); provided
that the deposit or payment by Global Growth
Series of initial or maintenance margin in
connection with futures or options is not
considered the purchase of a security on
margin.
SHORT SALES OF SECURITIES Eliminated.
The Fund may not: Make short sales of
securities or maintain a short position.
ISSUING SENIOR SECURITIES, BORROWING MONEY ISSUING SENIOR SECURITIES, BORROWING MONEY
OR PLEDGING ASSETS OR PLEDGING ASSETS
The Fund may not: Issue senior securities, The Fund may not: Issue senior securities or
borrow money or pledge its assets, except borrow money or pledge its assets, except as
that Global Growth Series may borrow up to permitted by the 1940 Act Laws,
20% of the value of its total Interpretations and Exemptions. For purposes
assets(calculated when the loan is made) for of this restriction, the purchase or sale of
temporary, extraordinary or emergency securities on a when- issued or delayed
purposes or for the clearance of delivery basis, reverse repurchase
transactions. Global Growth Series may agreements, dollar rolls, short sales,
pledge up to 20% of the value of its total derivative and hedging transactions such as
assets to secure such borrowings. For the interest rate swap transactions, and
purpose of this restriction, obligations of collateral arrangements with respect
the Fund to Directors pursuant to deferred thereto, and transactions similar to any of
compensation arrangements, the purchase and the foregoing and collateral arrangements
sale of securities on a when-issued or with respect thereto, and obligations of the
delayed delivery basis, the purchase and Fund to [Directors/Trustees] pursuant to
sale of forward foreign exchange contracts, deferred compensation arrangements are not
options and futures contracts and any deemed to be a pledge of assets or the
collateral arrangements with respect to the issuance of a senior security.
purchase and sale of forward foreign
exchange contracts, options and futures
contracts are not deemed to be the issuance
of a senior security or a pledge of assets.
PURCHASING SECURITIES OF A SINGLE ISSUER OR FUND DIVERSIFICATION
A SINGLE INDUSTRY The Fund may not: Purchase the securities of
The Fund may not: Purchase any security any issuer if, as a result, the Fund would
(other than obligations of the U.S. fail to be a diversified company within the
Government, its agencies, or meaning of the 1940 Act, and the rules and
instrumentalities) if as a result:(i) with regulations promulgated thereunder, as each
respect to 75% of Global Series' total may be amended from time to time except to
assets, more than 5% of Global Growth the extent that the Fund may be permitted to
Series' total assets(taken at current value) do so by exemptive order, SEC release,
would then be invested in securities of a no-action letter or similar relief or
single issuer, or (ii) more than 25% of interpretations (collectively, the
Global Growth Series'
H-10
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
total assets (taken at current value) would "1940 Act Laws, Interpretations and
be invested in a single industry. Exemptions").
FUND CONCENTRATION
The Fund may not: 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.
PURCHASING OUTSTANDING VOTING SECURITIES OF Eliminated.
AN ISSUER
The Fund may not: Purchase any security if
as a result the Global Growth Series would
then hold more than 10% of the outstanding
voting securities of an issuer.
BUYING OR SELLING COMMODITIES OR COMMODITY BUYING AND SELLING COMMODITIES AND COMMODITY
CONTRACTS OR REAL ESTATE OR REAL ESTATE CONTRACTS
INVESTMENTS The Fund may not: Buy or sell physical
The Fund may not: Buy or sell commodities or commodities or contracts involving physical
commodity contracts or real estate or invest commodities. The Fund may purchase and sell
in real estate, although it may purchase or (i) derivative, hedging and similar
sell securities which are secured by real instruments such as financial futures
estate and securities of companies which contracts and options thereon, and
invest or deal in real estate (for the (ii) securities or instruments backed by, or
purposes of this restriction, stock options, the return from which is linked to, physical
options on debt securities, options on stock commodities or currencies, such as forward
indices, stock indices futures, options on currency exchange contracts, and the Fund
stock index futures, futures contracts on may exercise rights relating to such
currencies, options on such contracts and instruments, including the right to enforce
forward foreign exchange contracts are not security interests and to hold physical
deemed to be a commodity or commodity commodities and contracts involving physical
contract). 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.
BUYING AND SELLING REAL ESTATE
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 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
H-11
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
such enforcement until that real estate can
be liquidated in an orderly manner.
ACTING AS AN UNDERWRITER No change.
The Fund may not: 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.
EXERCISING CONTROL OR MANAGEMENT Made non-fundamental.
The Fund may not: Make investments for the
purpose of exercising control or management.
INVESTING IN SECURITIES OF OTHER INVESTMENT Made non-fundamental.
COMPANIES
The Fund may not: 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.
INVESTING IN INTERESTS IN OIL, GAS OR OTHER Eliminated.
MINERAL EXPLORATION OR DEVELOPMENT PROGRAMS
The Fund may not: Invest in interests in
oil, gas or other mineral exploration or
development programs, although it may invest
in the common stocks of companies which
invest in or sponsor such programs.
MAKING LOANS Eliminated.
The Fund may not: Make loans, except through
(i) repurchase agreements and (ii) loans of
portfolio securities (limited to 30% of
Global Growth Series' total assets).
PURCHASING WARRANTS Made non-fundamental.
The Fund may not: 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.
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL INTERNATIONAL VALUE FUND
PURCHASING SECURITIES OF ANY ONE ISSUER FUND DIVERSIFICATION
The Fund may not: Purchase any security if, The Fund may not: Purchase the securities of
as a result, with respect to 75% of any issuer if, as a result, the Fund would
International Value Series' total assets, fail to be a diversified company within the
more than 5% of the value of its total meaning of the 1940 Act, and the rules and
assets (determined at the time of regulations promulgated thereunder, as each
investment) would then be invested in the may be
H-12
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
securities of any one issuer. 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").
PURCHASING OUTSTANDING VOTING SECURITIES OF Eliminated.
ANY ONE ISSUER
The Fund may not: Purchase a security if
more than 10% of the outstanding voting
securities of any one issuer would be held
by International Value Series.
PURCHASING SECURITIES IN THE SAME INDUSTRY FUND CONCENTRATION
The Fund may not: Purchase a security if, as The Fund may not: Purchase any security if
a result, 25% or more of the value of its as a result 25% or more of the Fund's total
total assets (determined at the time of assets would be invested in the securities
investment) would be invested insecurities of issuers having their principal business
of one or more issuers having their activities in the same industry, except for
principal business activities in the same temporary defensive purposes, and except
industry. This restriction does not apply to that this limitation does not apply to
obligations issued or guaranteed by the securities issued or guaranteed by the U.S.
United States Government, its agencies or government, its agencies or
instrumentalities. instrumentalities.
PURCHASING OR SELLING REAL ESTATE OR REAL BUYING AND SELLING REAL ESTATE
ESTATE INTERESTS The Fund may not: Buy or sell real estate,
The Fund may not: Purchase or sell real except that investment in securities of
estate or interests therein (including issuers that invest in real estate and
limited partnership interests), although investments in mortgage-backed securities,
International Value Series may purchase mortgage participations or other instruments
securities of issuers which engage in real supported or secured by interests in real
estate operations and securities which are estate are not subject to this limitation,
secured by real estate or interests therein. 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.
PURCHASING OR SELLING COMMODITIES OR BUYING AND SELLING COMMODITIES AND COMMODITY
COMMODITY FUTURES CONTRACTS CONTRACTS
The Fund may not: Purchase or sell The Fund may not: Buy or sell physical
commodities or commodity futures contracts, commodities or contracts involving physical
except that International Value Series may commodities. The Fund may purchase and sell
purchase and sell financial futures (i) derivative, hedging and similar
contracts and options thereon and that instruments such as financial futures
forward contracts are not deemed to be contracts and options thereon, and
commodities or commodity futures 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
H-13
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
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.
PURCHASING INTERESTS IN OIL, GAS OR OTHER Eliminated.
MINERAL EXPLORATION OR DEVELOPMENT PROGRAMS
The Fund may not: Purchase oil, gas or other
mineral leases, rights or royalty contracts
or exploration or development programs,
except that International Value Series may
invest in the securities of companies which
operate, invest in or sponsor such programs.
ISSUING SENIOR SECURITIES, BORROWING MONEY ISSUING SENIOR SECURITIES, BORROWING MONEY
OR PLEDGING ASSETS OR PLEDGING ASSETS
The Fund may not: Issue senior securities, The Fund may not: Issue senior securities or
borrow money or pledge its assets, except borrow money or pledge its assets, except as
that International Value Series may borrow permitted by the 1940 Act Laws,
from banks or through forward rolls, dollar Interpretations and Exemptions. For purposes
rolls or reverse repurchase agreements up to of this restriction, the purchase or sale of
20% of the value of its total assets to take securities on a when- issued or delayed
advantage of investment opportunities, for delivery basis, reverse repurchase
temporary, extraordinary or emergency agreements, dollar rolls, short sales,
purposes, or for the clearance of derivative and hedging transactions such as
transactions and may pledge up to 20% of the interest rate swap transactions, and
value of its total assets to secure such collateral arrangements with respect
borrowings. For purposes of this thereto, and transactions similar to any of
restriction, the purchase or sale of the foregoing and collateral arrangements
securities on a "when-issued" or with respect thereto, and obligations of the
delayed-delivery basis; the purchase and Fund to [Directors/Trustees] pursuant to
sale of options, financial futures contracts deferred compensation arrangements are not
and options thereon; the entry into deemed to be a pledge of assets or the
repurchase agreements and collateral and issuance of a senior security.
margin arrangements with respect to any of
the foregoing, will not be deemed to be a
pledge of assets nor the issuance of senior
securities.
SHORT SALES OF SECURITIES Eliminated.
The Fund may not: Make short sales of
securities.
MAKING LOANS Eliminated.
The Fund may not: Make loans except by the
purchase of fixed income securities in which
International Value Series may invest
consistently with its investment objective
and policies or by use of reverse repurchase
and repurchase agreements, forward rolls,
dollar rolls and securities lending
arrangements.
H-14
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
PURCHASING SECURITIES ON MARGIN Eliminated.
The Fund may not: 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
International Value Series of initial or
maintenance margin in connection with
financial futures contracts is not
considered the purchase of a security on
margin.)
ACTING AS AN UNDERWRITER No change.
The Fund may not: Act as underwriter except
to the extent that, in connection with the
disposition of portfolio securities, the
Series may be deemed to be an underwriter
under certain federal securities laws.
International Value Series has no limit with
respect to investments in restricted
securities.
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL JENNISON INTERNATIONAL GROWTH
FUND
ISSUING SENIOR SECURITIES, BORROWING MONEY ISSUING SENIOR SECURITIES, BORROWING MONEY
OR PLEDGING ASSETS OR PLEDGING ASSETS
The Fund may not: Issue senior securities, The Fund may not: Issue senior securities or
borrow money or pledge its assets, except borrow money or pledge its assets, except as
that the Series may borrow up to 33 1/3% of permitted by the 1940 Act Laws,
the value of its total assets (calculated Interpretations and Exemptions. For purposes
when the loan is made) for temporary, of this restriction, the purchase or sale of
extraordinary or emergency purposes or for securities on a when- issued or delayed
the clearance of transactions. The Series delivery basis, reverse repurchase
may pledge up to 20% of the value of its agreements, dollar rolls, short sales,
total assets to secure such borrowings. For derivative and hedging transactions such as
the purpose of this restriction, the interest rate swap transactions, and
purchase or sale of securities on a when- collateral arrangements with respect
issued or delayed delivery basis, forward thereto, and transactions similar to any of
foreign currency exchange contracts and the foregoing and collateral arrangements
collateral and collateral arrangements with respect thereto, and obligations of the
relating thereto, and collateral Fund to [Directors/Trustees] pursuant to
arrangements with respect to futures deferred compensation arrangements are not
contracts and options thereon and with deemed to be a pledge of assets or the
respect to the writing of options and issuance of a senior security.
obligations of the Series to Directors
pursuant to deferred compensation
arrangements are not deemed to be a pledge
of assets or the issuance of a senior
security.
PURCHASING SECURITIES OF A SINGLE ISSUER OR FUND DIVERSIFICATION
SINGLE INDUSTRY The Fund may not: Purchase the securities of
The Fund may not: Purchase any security any issuer if, as a result, the Fund would
(other than obligations of the U.S. fail to be a diversified company within the
Government, its agencies, or meaning of the 1940 Act, and the rules and
instrumentalities) if as a result: regulations
H-15
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
(i) with respect to 75% of the Series' total promulgated thereunder, as each may be
assets, more than 5% of such assets amended from time to time except to the
(determined at the time of investment) would extent that the Fund may be permitted to do
then be invested in securities of a single so by exemptive order, SEC release,
issuer, or (ii) 25% or more of the Series' no-action letter or similar relief or
total assets (determined at the time of interpretations (collectively, the "1940 Act
investment) would be invested in a single Laws, Interpretations and Exemptions").
industry.
FUND CONCENTRATION
The Fund may not: 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.
PURCHASING OUTSTANDING VOTING SECURITIES OF Made non-fundamental.
AN ISSUER
The Fund may not: Purchase any security if
as a result the Series would then hold more
than 10% of the outstanding voting
securities of an issuer.
BUYING OR SELLING REAL ESTATE OR INTERESTS BUYING AND SELLING REAL ESTATE
IN REAL ESTATE The Fund may not: Buy or sell real estate,
The Fund may not: Buy or sell real estate or except that investment in securities of
interests in real estate, except that the issuers that invest in real estate and
Series may purchase and sell securities investments in mortgage-backed securities,
which are secured by real estate, securities mortgage participations or other instruments
of companies which invest or deal in real supported or secured by interests in real
estate and publicly traded securities of estate are not subject to this limitation,
real estate investment trusts. 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.
PURCHASING OR SELLING COMMODITIES OR BUYING AND SELLING COMMODITIES AND COMMODITY
CONTRACTS ON COMMODITIES CONTRACTS
The Fund may not: Purchase or sell The Fund may not: Buy or sell physical
commodities or contracts on commodities, commodities or contracts involving physical
except to the extent that the Series may do commodities. The Fund may purchase and sell
so in accordance with applicable law, as may (i) derivative, hedging and similar
be amended from time to time, and without instruments such as financial futures
registering as a commodity pool operator contracts and options thereon, and
under the Commodity Exchange Act. (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
H-16
CURRENT RESTRICTIONS PROPOSED RESTRICTION/POLICIES
- -------------------- --------------------------------------------
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.
ACTING AS AN UNDERWRITER No change.
The Fund may not: 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.
MAKING LOANS Eliminated.
The Fund may not: Make loans, except through
(i) repurchase agreements and (ii) loans of
portfolio securities.
H-17
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
PRUDENTIAL EUROPE GROWTH FUND, INC.
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
March 28, 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 January 19, 2001 at the Meeting
to be held on March 28, 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 2,6,7,8 AND 9 IF
YOU DO NOT SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED
FEBRUARY 15, 2001 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 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.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X PRUC08 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL EUROPE GROWTH FUND, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
For Withhold For All
All All Except
1. To elect nine Directors.
Nominees: 01) Delayne Dedrick Gold, 02) Robert F. / / / / / /
Gunia, 03) Robert E. LaBlanc, 04) David R. Odenath, Jr., 05)
Judy A. Rice, 06) Robin B. Smith, 07) Stephen Stoneburn, 08)
Nancy H. Teeters, 09) 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
2. To approve a new subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC (PIFM) and Gartmore Global Partners.
3. Not applicable to this Fund.
4. Not applicable to this Fund.
5. Not applicable to this Fund.
6. To permit PIFM to enter into or make material changes to subadvisory / / / / / /
agreements without shareholder approval.
7. To approve an amendment to the Management Agreement to permit PIFM to allocate / / / / / /
assets among affiliated and unaffiliated subadvisers.
8. To approve certain changes to the Fund's fundamental investment restrictions
or policies relating to the following:
(a) fund diversification / / / / / /
(b) issuing senior securities, borrowing money or pledging assets / / / / / /
(c) buying and selling real estate / / / / / /
(d) buying and selling commodities and commodity contracts / / / / / /
(e) (i) fund concentration / / / / / /
(ii) Not applicable to this Fund.
(f) making loans / / / / / /
(g) other investment restrictions / / / / / /
9. To ratify the selection of PricewaterhouseCoopers LLP as independent / / / / / /
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 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.
- ----------------------------------------------------
- ----------------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ----------------------------------------------------
- ----------------------------------------------------
Signature (Joint Owners) Date
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
PRUDENTIAL PACIFIC GROWTH FUND, INC.
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
March 28, 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 January 19, 2001 at the Meeting
to be held on March 28, 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 3,6,7,8 AND 9 IF
YOU DO NOT SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED
FEBRUARY 15, 2001 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 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.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X PRUC08 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. To elect nine Directors.
Nominees: 01) Delayne Dedrick Gold, 02) Robert F. / / / / / /
Gunia, 03) Robert E. LaBlanc, 04) David R. Odenath, Jr., 05)
Judy A. Rice, 06) Robin B. Smith, 07) Stephen Stoneburn, 08)
Nancy H. Teeters, 09) 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
2. Not applicable to this Fund.
3. To approve a new subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC (PIFM) and Jardine Fleming International Management Inc.
4. Not applicable to this Fund.
5. Not applicable to this Fund.
6. To permit PIFM to enter into or make material changes to subadvisory agreements / / / / / /
without shareholder approval.
7. To approve an amendment to the Management Agreement to permit PIFM to allocate / / / / / /
assets among affiliated and unaffiliated subadvisers.
8. To approve certain changes to the Fund's fundamental investment restrictions
or policies relating to the following:
(a) fund diversification / / / / / /
(b) issuing senior securities, borrowing money or pledging assets / / / / / /
(c) buying and selling real estates / / / / / /
(d) buying and selling commodities and commodity contracts / / / / / /
(e) (i) fund concentration / / / / / /
(ii) Not applicable to this Fund.
(f) making loans / / / / / /
(g) other investment restrictions / / / / / /
9. To ratify the selection of PricewaterhouseCoopers LLP as independent / / / / / /
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 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.
- ----------------------------------------------------
- ----------------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ----------------------------------------------------
- ----------------------------------------------------
Signature (Joint Owners) Date
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
March 28, 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 January 19, 2001 at the Meeting
to be held on March 28, 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 4, 6, 7, 8 AND 9
IF YOU DO NOT SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED
FEBRUARY 15, 2001 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 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.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X PRUC12 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. To elect nine Directors.
Nominees: 01) Delayne Dedrick Gold, 02) Robert F. Gunia, / / / / / /
03) Robert E. La Blanc, 04) David R. Odenath, Jr.,
05) Judy A. Rice, 6) Robin B. Smith, 07) Stephen Stoneburn,
08) Nancy H. Teeters, 9) 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
2. Not applicable to this Fund.
3. Not applicable to this Fund.
4. To apporve a new subadvisory agreement between Prudential Investments
Fund Management LLC (PIFM) and Jennison Associates LLC.
5. Not applicable to this Fund.
6. To permit PIFM to enter into or make material changes to subadvisory agreements / / / / / /
without shareholder approval.
7. To approve an amendment to the Management Agreement to permit PIFM to allocate / / / / / /
assets among affiliated and unaffiliated subadvisers.
8. To approve certain changes to the Fund's fundamental investment restrictions
or policies relating to the following:
(a) fund diversification / / / / / /
(b) issuing senior securities, borrowing money or pledging assets / / / / / /
(c) buying and selling real estates / / / / / /
(d) buying and selling commodities and commodity contracts / / / / / /
(e) (i) fund concentration / / / / / /
(ii) Not applicable to this Fund.
(f) making loans / / / / / /
(g) other investment restrictions / / / / / /
9. To ratify the selection of PricewaterhouseCoopers LLP as independent / / / / / /
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 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.
- ----------------------------------------------------
- ----------------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ----------------------------------------------------
- ----------------------------------------------------
Signature (Joint Owners) Date
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL INTERNATIONAL VALUE FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
March 28, 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 January 19, 2001 at the Meeting
to be held on March 28, 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 5, 6, 7, 8 AND 9
IF YOU DO NOT SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED
FEBRUARY 15, 2001 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 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.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X PRUC12 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL WORLD FUND INC.
PRUDENTIAL INTERNATIONAL VALUE FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. To elect nine Trustees.
Nominees: 01) Delayne Dedrick Gold, 02) Robert F. / / / / / /
Gunia, 03) Robert E. LaBlanc, 04) David R. Odenath, Jr., 05)
Judy A. Rice, 06) Robin B. Smith, 07) Stephen Stoneburn, 08)
Nancy H. Teeters, 09) 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
2. Not applicable to this Fund.
3. Not applicable to this Fund.
4. Not applicable to this Fund.
5. To approve a new subadvisory agreement between Prudential Investments Fund
Management LLC (PIFM) and Band of Ireland Asset Management (U.S.) Limited.
6. To permit PIFM to enter into or make material changes to subadvisory agreements / / / / / /
without shareholder approval.
7. To approve an amendment to the Management Agreement to permit PIFM to allocate / / / / / /
assets among affiliated and unaffiliated subadvisers.
8. To approve certain changes to the Fund's fundamental investment restrictions
or policies relating to the following:
(a) fund diversification / / / / / /
(b) issuing senior securities, borrowing money or pledging assets / / / / / /
(c) buying and selling real estates / / / / / /
(d) buying and selling commodities and commodity contracts / / / / / /
(e) (i) fund concentration / / / / / /
(ii) Not applicable to this Fund.
(f) making loans / / / / / /
(g) other investment restrictions / / / / / /
9. To ratify the selection of PricewaterhouseCoopers LLP as independent / / / / / /
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 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.
- ----------------------------------------------------
- ----------------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ----------------------------------------------------
- ----------------------------------------------------
Signature (Joint Owners) Date
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
PROXY
Annual Meeting of Shareholders (Meeting) -
March 28, 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 January 19, 2001 at the
Meeting to be held on March 28, 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 6, 7, 8 AND 9 IF
YOU DO NOT SPECIFY OTHERWISE. PLEASE REFER TO THE PROXY STATEMENT DATED
FEBRUARY 15, 2001 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 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.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X PRUC13 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE NOMINEES AND EACH OF THE PROPOSALS.
VOTE ON PROPOSALS
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. To elect nine Directors.
Nominees: 01) Delayne Dedrick Gold, 02) Robert F. / / / / / /
Gunia, 03) Robert E. LaBlanc, 04) David R. Odenath, Jr.,
5) Judy A. Rice, 6) Robin B. Smith, 07) Stephen Stoneburn,
08) Nancy H. Teeters, 09) 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
2. Not applicable to this Fund.
3. Not applicable to this Fund.
4. Not applicable to this Fund.
5. Not applicable to this Fund.
6. To permit Prudential Investments Fund Management LLC (PIFM) to enter into or / / / / / /
make material changes to subadvisory agreements without shareholder approval.
7. To approve an amendment to the Management Agreement to permit PIFM to allocate / / / / / /
assets among affiliated and unaffiliated subadvisers.
8. To approve certain changes to the Fund's fundamental investment restrictions
or policies relating to the following:
(a) fund diversification. / / / / / /
(b) issuing senior securities, borrowing money or pledging assets / / / / / /
(c) buying and selling real estates / / / / / /
(d) buying and selling commodities and commodity contracts / / / / / /
(e) (i) fund concentration / / / / / /
(ii) Not applicable to this Fund.
(f) making loans / / / / / /
(g) other investment restrictions / / / / / /
9. To ratify the selection of PricewaterhouseCoopers LLP as independent / / / / / /
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 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.
- ----------------------------------------------------
- ----------------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ----------------------------------------------------
- ----------------------------------------------------
Signature (Joint Owners) Date