Exhibit 99.3
SECOND AMENDMENT TO
THE PRUDENTIAL EMPLOYEE SAVINGS PLAN
2001 RESTATEMENT
WHEREAS, The Prudential Employee Savings Plan (the "Plan") was last
restated effective as of January 1, 2001 and has been amended thereafter;
WHEREAS, pursuant to Section 17.01(a)(2) of the Plan, the Compensation
Committee of the Board of Directors (the "Compensation Committee") of The
Prudential Insurance Company of America ("Prudential") has authority to amend
the Plan;
WHEREAS, on November 13, 2001, the Compensation Committee authorized
the Executive Vice President of Human Resources, or his or her delegate (the
"EVP"), to amend the Plan to implement changes related to the establishment of a
company stock fund in connection with the proposed demutualization of Prudential
(the "Delegation"); and
WHEREAS, the EVP has determined that the following amendment is within
the scope of authority granted to the EVP pursuant to such Delegation.
NOW, THEREFORE, the Plan is hereby amended, effective as of the later
of the date of Prudential Financial, Inc.'s initial public offering or January
1, 2002, as follows:
1. Section 2.15A is added, to read as follows:
2.15A "Company Matching Contribution Account" shall mean the
Pre-2001 Company Matching Contribution Account and the Post-2000
Company Matching Contribution Account.
2. Section 2.15B is added, to read as follows:
2.15B "Company Matching Contribution Account 1" shall mean the
separate Account maintained for a Participant that contains the value
of (1) one-hundred percent (100%) of the Company Matching Contributions
made by the Employer under the Plan on or after January 1, 2001 and
ending December 31, 2001 and the earnings (or losses) thereon, and (2)
fifty percent (50%) of the Company Matching
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Contributions made by the Employer under the Plan on or after
January 1, 2002 and the earnings (or losses) thereon.
3. Section 2.15C is added, to read as follows:
2.15C "Company Matching Contribution Account 2" shall mean the
separate Account maintained for a Participant that contains the value
of fifty percent (50%) of the Company Matching Contributions made by
the Employer under the Plan on or after January 1, 2002 and the
earnings (or losses) thereon.
4. Section 2.15D is added, to read as follows:
2.15D "Company Stock" means the shares of common stock issued
by Prudential Financial, Inc.
5. Section 2.15E is added, to read as follows:
2.15E "Company Stock Fund" shall mean the Investment Fund
consisting of Company Stock and short-term liquid investments necessary
to satisfy the fund's cash needs. Such fund shall, from time to time,
also include receivables for dividends or Company Stock sold and
payables for Company Stock purchased.
6. Section 2.30 is amended, to read as follows:
2.30 "Investment Fund(s)" shall mean the Company Stock Fund
and one or more of the investment options, selected by the Investment
Oversight Committee under Section 14.03, to which Participants,
Beneficiaries, and alternate payees under QDROs may direct investment
of amounts in their Plan Accounts.
7. Section 2.38 is amended, to read as follows:
2.38 "Post-2000 Company Matching Contribution Account" shall
mean the Company Matching Contribution Account 1 and the Company
Matching Contribution Account 2.
8. Section 4.04(a) is amended by replacing the last sentence thereof with
the following two sentences.
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Fifty percent (50%) of Company Matching Contributions shall be credited
to the Participant's Company Matching Contribution Account 1. The
remaining fifty percent (50%) shall be credited to the Participant's
Company Matching Contribution Account 2.
9. New Section 4.04(c) is added, to read as follows:
(c) Company Matching Contributions credited to the Company
Matching Contribution Account 2 shall be automatically invested in the
Company Stock Fund.
10. Section 5.01 is amended by replacing the phrase "Post-2000 Company
Matching Contribution Account" with the phrase "Company Matching
Contribution Account 1, Company Matching Contribution Account 2."
11. The second sentence of Section 8.01(a) is amended, to read as follows:
Distributions shall be made (i) entirely in cash or (ii) if so elected
by a Participant who receives a lump sum distribution pursuant to
Section 8.02(a) or (d), the portion of the distribution from the
Company Stock Fund entirely in Company Stock, provided that, fractional
shares shall be distributed in cash rather than in Company Stock, and
the remainder in cash.
12. Section 8.01(b) is amended by adding the following sentence to the end
thereof:
Withdrawals under this Section 8.01(b) shall be made (i) entirely in
cash or (ii) if so elected by the individual who receives a lump sum
distribution pursuant to Section 8.02(a) or (d), the portion of the
withdrawal from the Company Stock Fund entirely in Company Stock,
provided that fractional shares shall be distributed in cash rather
than in Company Stock, and the remainder in cash.
13. The second to last paragraph of Section 8.04 is amended, to read as
follows:
The Participant's Account balance at the time of his or her
death will be distributed as a single sum unless the Beneficiary elects
an optional form of distribution under Section 8.02, or elects to
receive a partial distribution under Section 8.01(b), at the time the
claim is submitted. Distributions shall be made (i) entirely in cash or
(ii) if so elected by a Beneficiary who receives a single sum, the
portion of the
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distribution from the Company Stock Fund entirely in Company Stock,
provided that, fractional shares shall be distributed in cash rather
than in Company Stock, and the remainder in cash.
14. The last sentence of Section 9.02(e) is amended, to read as follows:
Distributions that commence under this Section 9.02(e) after 2001 shall
be made in cash from the Participant's Accounts in the order specified
in items (1) through (9) of Appendix C.
15. The last sentence of Section 10.01 is amended, to read as follows:
To the extent permitted under this Section 10.01, withdrawals shall be
made in cash from the Participant's Accounts in the order specified in
Appendix C.
16. Section 10.02(b) is amended, to read as follows:
(b) To the extent permitted under this Section 10.02,
withdrawals shall be made in cash from the Participant's Accounts in
the order specified in Appendix C.
17. The second sentence of Section 14.03(b) is amended, to read as follows:
Except with respect to the Company Stock Fund, the Investment Oversight
Committee shall select and monitor the performance of all Investment
Funds and direct the exercise of voting or similar rights for any
security held in the Plan Fund, unless responsibility for the
management of such security is granted to an investment manager or
delegated to another fiduciary by the Investment Oversight Committee
under Section 14.04. The Company Stock Fund, as described by Section
2.15E, shall be available as an Investment Fund under the Plan and
shall be voted or tendered in accordance with Section 14.12.
18. Section 14.12 is added, to read as follows:
14.12 Company Stock.
(a) Purchase of Company Stock. The Trustee shall purchase
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Company Stock for the Company Stock Fund in the open market or by
private purchase, including purchase from an Affiliate (except to the
extent that the Employer elects to contribute Company Stock to the
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Plan). Any such purchase from an Affiliate shall be at a price per
share not in excess of the mean between the highest and lowest quoted
selling price per share for a 100 share lot of Company Stock on the
composite tape of New York Stock Exchange issued on the date of
purchase.
(b) Voting Rights of Company Stock. All voting rights with
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respect to shares of Company Stock held by the Plan shall be exercised
by the Trustee in accordance with the timely directions of
Participants, the Beneficiaries, or alternate payees under QDROs
(collectively, the Participants, the Beneficiaries, and such alternate
payees are "Eligible Voters"), as provided herein. Each Eligible Voter
shall have the right to vote the number of shares of Company Stock
credited to his or her Account (whether or not fully vested) and,
unless the Eligible Voter objects as permitted in subsection (b)(2)
below, a proportionate number of "Undirected Shares." For this purpose,
Undirected Shares are shares of Company Stock for which the Trustee
does not receive timely voting instructions from Eligible Voters, or
which have not been allocated to a Participant's Account.
Notwithstanding the foregoing, if more than 60% of the Eligible Voters
object as permitted in subsection (b)(2) below, the Investment
Oversight Committee shall obtain the services of an independent
fiduciary to direct the Trustee with respect to the voting.
(1) Application of Voting Instructions; General.
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Except as provided under subsection (b)(2), timely voting instructions
provided by each Eligible Voter to the Trustee shall apply to the
number of shares of Company Stock credited to the Eligible Voter's
Account and to a proportionate number of Undirected Shares; and, for
this purpose, each Eligible Voter who provides instructions to the
Trustee shall be a named fiduciary (within the meaning of Sections 402
and 403(a)(1) of ERISA) to the Plan with respect to the voting, but
shall have no other fiduciary authority or responsibility under this
Plan unless otherwise designated as a named fiduciary under another
section of the Plan.
(2) Right to Object. Any Eligible Voter who
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exercises in a timely manner his or her right to vote the shares of
Company Stock credited to his or her Account may object to the
application of his or her voting instructions to any Undirected Shares
by providing timely notice to the Administrative Committee or its
designee. An Eligible Voter who objects in a timely manner to the
application of his or her voting instructions to Undirected Shares
shall not be a named fiduciary of the Plan with respect to voting
Undirected Shares. The
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Administrative Committee shall establish reasonable procedures that
allow Eligible Voters to notify the Administrative Committee or its
designee in a timely manner of the Eligible Voter's objection
hereunder.
(3) Notice to Eligible Voters. Before each annual or
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special meeting of the shareholders of Prudential Financial, Inc., the
Administrative Committee shall cause to be sent to each Eligible Voter
the proxy materials and any other information provided to Prudential
Financial, Inc.'s shareholders in connection with such annual or
special meeting, together with a form requesting voting instructions
and describing the procedure by which an Eligible Voter may object in a
timely manner to the application of his or her voting instructions to
Undirected Shares. The materials sent to Eligible Voters shall include
a notice explaining that: (a) each Eligible Voter's timely voting
instructions to the Trustee shall be effective with respect to the
number of shares of Company Stock credited to his or her Account, (b)
unless the Eligible Voter objects in a timely manner to the application
of his or her voting instructions to Undirected Shares in accordance
with the procedure explained in the notice, the Eligible Voter's voting
instructions to the Trustee shall apply to a pro rata portion of
Undirected Shares, (c) each Eligible Voter who provides voting
instructions to the Trustee shall be a named fiduciary of the Plan with
respect to the shares of Company Stock voted in accordance with his or
her voting instructions, and (d) if the Eligible Voter fails to timely
provide voting instructions to the Trustee, the Trustee shall vote the
shares of Company Stock credited to his or her Account in accordance
with the directions of those Eligible Voters who submit timely
instructions to the Trustee and who have not objected in a timely
manner to the application of their voting instructions to Undirected
Shares.
(4) Voting; Confidentiality. Upon receipt of timely
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instructions from Eligible Voters, the Trustee shall vote the shares of
Company Stock credited to the Eligible Voter's Account (whether or not
fully vested) as directed by him or her. The Trustee shall vote
Undirected Shares in the same proportion on each issue as it votes
shares of Company Stock for which instructions are received in a timely
manner from Eligible Voters who do not object in a timely manner to the
application of their voting instructions to a proportionate number of
the Undirected Shares. Except as required by applicable law,
instructions received by the Trustee from Eligible Voters shall be
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held in confidence and shall not be divulged or released to any
person, including officers or employees of an Affiliate.
(c) Tender or Similar Offers.
(1) General. Notwithstanding the foregoing, in the
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event of a tender offer by any party other than an Affiliate for shares
of Company Stock or in the event of any similar event to effect a
change in control (as hereinafter defined) of Prudential Financial,
Inc. by a sale or exchange of Company Stock, each Eligible Voter shall
have the right to instruct the Trustee in a timely manner with respect
to the number of shares of Company Stock credited to his or her Account
(whether or not fully vested). Each Eligible Voter shall be a named
fiduciary (within the meaning of Sections 402 and 403(a)(1) of ERISA)
of the Plan with respect to the exercise of his or her rights in a
tender offer or in any similar event to effect a change in control (as
hereinafter defined) of Prudential Financial, Inc. by a sale or
exchange of Company Stock, but shall have no other fiduciary authority
or responsibility under this Plan unless otherwise designated as a
named fiduciary under another section of this Plan.
(2) Notice. In the event of a tender offer by any
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party other than an Affiliate for shares of Company Stock or in the
event of any similar event to effect a change in control (as
hereinafter defined) of Prudential Financial, Inc. by a sale or
exchange of Company Stock, the Administrative Committee shall cause to
be sent to each Eligible Voter a form requesting instructions as to
whether the Company Stock should be tendered pursuant to the offer or
sold or exchanged pursuant to any similar attempt to effect such a
change in control and together with a notice explaining that: (a) the
Eligible Voter's timely instructions shall be effective with respect to
the number of shares of Company Stock credited to his or her Account,
(b) each Eligible Voter shall be a named fiduciary of the Plan with
respect to the number of shares of Company Stock credited to the
Eligible Voter's Account, and (c) an Eligible Voter's failure to
respond to a request for instructions shall be treated as an
instruction to not tender or to not so sell or exchange, as the case
may be. At or prior to the time the Administrative Committee causes
such request for instructions to be sent to each Eligible Voter, it
shall distribute or cause to be distributed to each Eligible Voter
copies of any materials required to be distributed to each shareholder
of Prudential Financial, Inc. by the Securities and Exchange Commission
or by any other appropriate regulatory body in connection with the
tender offer or similar attempt to effect a change of control.
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(3) Response to Tender or Similar Offer;
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Confidentiality. Upon timely receipt of instructions from the Eligible
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Voters, the Trustee shall tender or take other action with respect to
the shares of Company Stock credited to each Eligible Voter's Account
as directed by him or her. To the extent that Eligible Voters do not
provide instructions with respect to the number of shares of Company
Stock credited to his or her Account, the Trustee shall not tender or
sell or exchange such shares of Company Stock. Except as required by
law, instructions received by the Trustee from Eligible Voters shall be
held in confidence and shall not be divulged or released to any person,
including officers or employees of an Affiliate.
(4) Change in Control. For purposes of this
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subsection 14.12(c), a change in control of Prudential Financial, Inc.
shall mean the accumulation by any individual, firm, corporation or
other entity (other than an Affiliate or by any employee benefit plan
maintained by an Affiliate), singly or in combination with any
associates or affiliates, of the beneficial ownership of more than
twenty percent (20%) of the outstanding shares of capital stock of
Prudential Financial, Inc. authorized to be issued from time to time
under its Certificate of Incorporation.
(5) Tender or Similar Offer Proceeds Fund. Any
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proceeds from the tender or the sale or exchange of Company Stock
pursuant to subsection 14.12(c)(3) hereof shall be held in a Tender
Offer Proceeds Fund. Such fund shall be invested in such manner as the
Investment Oversight Committee, in its sole discretion, determines.
(d) Dividends and Other Income on Company Stock. All dividends
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and other income credited to the Company Stock Fund shall be allocated
to all individuals with an Account balance in the Company Stock Fund
when such amounts are received to the Plan. However, if the Company
Stock Fund has been terminated, such dividends and other income shall
be allocated in accordance with Section 7.02.
(e) Confidentiality. Except as required by applicable law,
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information relating to the purchase, holding and sale of the Company
Stock and the exercise of voting, tender and similar rights with
respect to the Company Stock by Participants, Beneficiaries and
alternate payees under QDROs shall be held in confidence and shall not
be divulged or released to any person, including officers or employees
of an Affiliate. The Administrative Committee shall ensure that
sufficient
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procedures are maintained to safeguard the confidentiality of such
information and shall monitor compliance with such procedures. In any
situation which the Administrative Committee determines has a
potential for undue Employer influence upon the direct or indirect
purchase, holding and sale of the Company Stock or exercise of voting,
tender and similar rights by Participants, Beneficiaries, or alternate
payees under QDROs, the Administrative Committee shall appoint an
independent Plan fiduciary to review the sufficiency of, and monitor
compliance with, such procedures. In the case of a tender or similar
offer, the Administrative Committee shall appoint such an independent
fiduciary. For purposes of this paragraph, a fiduciary is not
independent if the fiduciary is affiliated with the plan sponsor as
described in Section 14.01.
19. The third sentence of Section 15.01 is amended to read as follows:
These trust accounts or mutual funds may include accounts or funds
sponsored by Prudential or an affiliate of Prudential, and shall
include the Company Stock Fund; these insurance contracts may include
contracts issued by Prudential or an affiliate of Prudential, and may
provide for the investment of some or all of the Plan Fund in one or
more separate accounts maintained by Prudential or an affiliate of
Prudential.
20. Section 15.02(a) is amended, to read as follows:
(a) Investment Directions. Except as otherwise
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provided in Section 15.03, each Participant, Beneficiary, and alternate
payee under a QDRO may direct the investment of his or her Accounts in
one or more of the Investment Funds offered under the Plan. Amounts
received in repayment of a Participant's loan shall be invested
according to procedures developed by the Administrative Committee as in
effect from time to time. Except as otherwise provided in Section
4.04(c), if a Participant, Beneficiary, or alternate payee under a QDRO
does not provide directions with respect to any portion of the Plan
Fund, the undirected amounts shall be invested in an Investment Fund
providing a fixed rate of return, unless otherwise specified by the
Investment Oversight Committee.
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21. Section 15.02(b) is amended, to read as follows:
(b) Investment Funds. The Investment Oversight
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Committee may, upon consultation with and advance notice to the
Administrative Committee, add, substitute, or delete any of the
Investment Funds, other than the Company Stock Fund. If any existing
Investment Fund is deleted, the Investment Oversight Committee shall
provide the Administrative Committee with instructions regarding the
reinvestment of amounts previously allocated to the deleted Investment
Fund.
22. Section 15.03 is amended, to read as follows:
15.03 Procedures for Participant Elections and Directions.
All Participant elections and directions under the terms of the Plan
shall be made in accordance with rules and procedures prescribed by the
Administrative Committee. Subject to the rules and procedures
established by the Administrative Committee --
(a) Participants, Beneficiaries, and alternate payees
under QDROs may direct the transfer of accumulated Accounts between
Investment Funds and such transfers shall become effective as of the
Valuation Date that occurs as soon as administratively practicable
following such direction, unless otherwise specified by the
Administrative Committee;
(b) Participants may elect to change investment
allocations of future After-Tax Contributions, Before-Tax
Contributions, and the Company Matching Contributions credited to the
Company Matching Contribution Account 1 and such investment allocations
shall become effective as of the pay period that occurs as soon as
administratively practicable following such election;
(c) Covered Employees may direct the investment
of Rollover Contributions made in accordance with Section 4.06; and
(d) Company Matching Contributions credited to the
Company Matching Contribution Account 2 shall be automatically invested
in the Company Stock Fund. Thereafter, the amounts held in the Company
Matching Contribution Account 2 may be invested, if so elected by the
Participant, in any of the Investment Funds.
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To the extent any individual fails to provide the
Administrative Committee with an election or direction in good order in
accordance with the rules and procedures established by the
Administrative Committee, the individual's most recent election or
direction shall remain effective. The Administrative Committee may
decline to implement investment instructions where it deems
appropriate, including without limitation, those that may result in a
prohibited transaction under ERISA Section 406 or Code Section 4975,
generate income that would be taxable to the Plan or Trust, violate
applicable federal securities laws, or Prudential Financial, Inc.'s
policies regarding compliance with such laws.
Notwithstanding any other Plan provision to the contrary, the
Administrative Committee may adopt administrative procedures designed
to ensure that transactions resulting in Participant elections and
directions do not violate applicable federal securities laws, or
Prudential Financial, Inc.'s policies regarding compliance with such
laws.
23. Items 7 and 8 of Appendix C are replaced with the following items 7, 8
and 9, to read as follows:
(7) seventh, from earnings on Before-Tax Contributions;
(8) eighth, from the vested Company Matching Contribution
Account 1; and
(9) ninth, from the vested Company Matching Contribution
Account 2.
IN WITNESS WHEREOF, the undersigned hereby executes this Second
Amendment to the Plan this 4th day of December, 2001.
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Michele S. Darling
Executive Vice President of Human Resources
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