January 2003
Exhibit 99
PRUDENTIAL SECURITIES INCORPORATED
THE 2003 PRUDENTIAL FINANCIAL STOCK PURCHASE PROGRAM FOR ELIGIBLE
EMPLOYEES OF PRUDENTIAL SECURITIES INCORPORATED PARTICIPATING IN
VARIOUS PRUDENTIAL SECURITIES INCORPORATED PROGRAMS
Adopted by the Board of Directors of Prudential Securities Incorporated on
January 7, 2003
Article I. PURPOSES
Section 1.1 The purposes of The 2003 Prudential Financial Stock
Purchase Program For Eligible Employees Of Prudential Securities Incorporated
Participating In Various Prudential Securities Incorporated Programs (the
"Program") are (a) to provide Participants (as defined below) with an
opportunity to acquire an ownership interest in Prudential Financial, Inc.
("Prudential Financial") by allowing them to authorize a payroll deduction to
purchase Prudential Financial Restricted Shares (as defined below) in accordance
with the terms of this Program, (b) to foster and promote the long-term
financial success of Prudential Financial and Prudential Securities Incorporated
("PSI") by aligning employee interests with that of Prudential Financial and PSI
through the use of matching contributions and awards in the form of Prudential
Financial Restricted Shares and (c) to increase materially stockholder value by
(i) motivating superior performance by Participants and (ii) enabling PSI to
retain the services of outstanding employees upon whose judgment, interest and
special effort the successful conduct of its operations is largely dependent.
The Program is not required to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and is not subject to the
provisions of the Employee Retirement Income Securities Act of 1974, as amended
("ERISA").
Article II. ADMINISTRATION
Section 2.1 The Director of Human Resources of PSI or his designee
(the "Administrator") shall be responsible for the administration of the
Program. Any authority exercised by the Administrator under the Program shall be
exercised by the Administrator in his sole discretion. Subject to the terms of
the Program, the Administrator is authorized to prescribe, amend and rescind
rules and regulations relating to the administration of the Program, to provide
for conditions and assurances deemed necessary or advisable to protect the
interests of Prudential Financial, PSI and their affiliates, and to make all
other determinations necessary or advisable for the administration and
interpretation of the Program (including any transition or other rules
applicable to an "Amended Eligible Program" as defined in Article V hereof) or
to carry out its provisions and purposes. Determinations, interpretations or
other actions made or taken by the Administrator pursuant to the provisions of
the Program shall be final, binding and conclusive for all purposes and upon all
persons.
Article III. PARTICIPATION
Section 3.1 Each person who is a participant in any of those programs
of PSI that were identified to the Board of Directors of Prudential Financial in
connection with its approval of the registration of Prudential Financial Stock
for purposes of this Program (each, an "Eligible Program"), who is an employee
of PSI at the date (a) on which deferral elections may be made in accordance
with the terms of the Program (the "Deferral Election Date") and/or (b) awards
may be granted (the "Award Grant Date") and in whose name an account is
maintained in connection with such Eligible Program an ("Eligible Program
Account") may participate in this Program (each such participant, a
"Participant").
Article IV. OFFERS OF PRUDENTIAL FINANCIAL RESTRICTED SHARES
Section 4.1 Deferral Election.
(a) Election. Subject to the terms and conditions of this Program,
during any election period specified by the Administrator (the "Election
Period"), any Participant may, by written election (including an electronic
election) (a "Deferral Election") to PSI in form and substance satisfactory to
PSI, (1) direct the deferral of his eligible earnings (as defined in the
Eligible Program) to acquire shares of the Prudential Stock Index Fund ("Fund
Shares"), the Fixed Income Option ("Fixed Income Option") then available under
the Program, and/or shares of Common Stock of Prudential Financial, par value
$.01 per share, listed on the New York Stock Exchange under the symbol "PRU"
("Prudential Financial Stock"), which shall be held in such Participant's
Eligible Program Account through the conclusion of the applicable Restricted
Periods (as defined in the Eligible Program) or (2) periodically redirect future
investments and/or rebalance between current investment options (excluding
Prudential Financial Stock constituting PSI's matching contribution(s) and/or
award(s)), as set forth in the Eligible Program. Participants may make a
Deferral Election by completing the Eligible Program Enrollment Form and/or
Deferral Election Form online. Notwithstanding the foregoing, each such
Participant must also sign and return to the Administrator a hard copy of a
completed Representations, Warranties and Acknowledgments form. The Deferral
Election must be completed and the Representations, Warranties and
Acknowledgments form must be sent to PSI by the 20th of the month following the
Election Period (or such other date as designated in the Eligible Program) in
order to be effective. The last Deferral Election received from a Participant
during the Enrollment Period and/or Election Period shall become irrevocable
upon the expiration of the Election Period. Each Participant who makes a
Deferral Election shall be notified by the Administrator whether and to what
extent such election has been accepted not later than the end of the month
following the Election Period.
(b) Percentage Eligible Earnings Subject to Election. Each Participant
may elect to defer any percentage between five percent (5%) and twenty-five
percent (25%) of eligible earnings.
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Section 4.2 Award Grants.
Subject to the terms and conditions of this Program, during any period
specified by the Eligible Program, a Participant may qualify for an Award in the
form of Prudential Financial Restricted Shares, which shall be subject to such
terms and conditions (including forfeiture and transfer restrictions) as set
forth in the Eligible Program. Prudential Financial Stock granted to a
Participant pursuant to such Award shall be held in the Participant's Eligible
Program Account through the conclusion of the applicable Restricted Periods (as
defined in the Eligible Program). Notwithstanding the foregoing, any such Award
shall be cancelled and Prudential Financial Stock shall not be transferred to
the Eligible Program Account of any Participant who has not signed and returned
to the Administrator a hard copy of a completed Representations, Warranties and
Acknowledgments form in accordance with the requirements of the Eligible
Program.
Section 4.3 Establishment and Operation of the Fixed Income
Investment.
(a) Participants Authorize Agency Agreement. Any Fixed Income Option
under an Eligible Program that is required to be held by an agent shall be
authorized pursuant to an agency agreement (the "Agency Agreement") with the
agent thereof (the "Agent") and PSI as parties thereto. The Agent shall hold
assets for the sole benefit of the Participants. Each Participant who elects to
participate in the Program shall be deemed to have directed PSI to enter into
the Agency Agreement on his behalf. PSI shall, on behalf of each Participant who
has designated the Fixed Income Option in any Election filed with PSI approved
by the Administrator, record in such Participant's Eligible Program Account such
Participant's interest in the Fixed Income Option which shall be valued as
provided in the Eligible Program. No Participant may sell, assign, transfer,
encumber, grant any option on or any other interest in the Fixed Income Option
held by such Participant and any such sale, assignment, transfer, encumbrance,
grant, or other disposition shall be void ab initio.
(b) Agent May Be Affiliate of PSI. The Agent shall not be required to
be independent of PSI and its affiliates. Although legal title to the Fixed
Income Option would he held by the Agent, the Agent would act only upon the
direction of Participants acting through PSI, and would have no discretionary
authority under the Agency Agreement. Each Participant in the Program shall be
deemed to have authorized the Agent to take such actions as described in the
Eligible Program.
(c) Maintenance of Fixed Income Option. The Fixed Income Option shall
be paid in cash in accordance with the terms and conditions (including the
forfeiture and transfer restrictions) of the Eligible Program. If the Fixed
Income Option is terminated, the liquidation proceeds will be applied evenly to
purchase Fund Shares and Prudential Financial Stock for such Participant's
Eligible Program Account, subject to the forfeiture and transfer restrictions of
the Eligible Program.
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(d) Agent's Expenses. PSI will pay the fees and expenses of the Agent
under the Agency Agreement.
(e) Restrictions; Potential Forfeiture. The Deferral Account (as
defined in the Eligible Program) and all securities, cash or other property held
in the Participant's Eligible Program Account shall be subject to potential
forfeiture and transfer restrictions as set forth in the Eligible Program.
Section 4.4 Dividends and Voting. Prior to the Distribution Date, each
Participant shall be entitled to vote Prudential Financial Stock and Fund Shares
held in such Participant's Eligible Program Account. Each Participant with an
interest in the Fixed Income Option held pursuant to the Agency Agreement shall
also have such voting rights (if any) as are described in the Eligible Program.
Additionally, each Participant shall receive dividends or other distributions
(if any) when made by the Fund or Prudential Financial as the case may be, or to
receive any earnings earned in respect of any assets held in such Participant's
Eligible Program Account. However, as a condition of participation in this
Program, such dividends, distributions and earnings shall be subject to the
forfeiture and transfer restrictions of the Eligible Program.
Section 4.5 Termination of Employment. The Participant shall be
subject to forfeiture and transfer restrictions applicable to such Participant's
Fund Shares, Prudential Financial Restricted Shares and/or interest in the Fixed
Income Option as set forth in the Eligible Program. Any forfeited Prudential
Financial Restricted Shares shall revert to The PSI Programs L.L.C.
Section 4.6 Beneficiaries. The Participant's designation of a
beneficiary or beneficiaries in accordance with the procedures applicable to the
Eligible Program will govern with respect to Fund Shares, Prudential Financial
Restricted Shares, the interest in the Fixed Income Option and/or cash or other
property held in such Participant's Eligible Program Account under this Program
that become transferable upon death.
ARTICLE V. AMENDMENT, MODIFICATION, OR TERMINATION
Section 4.7 PSI, through its Board of Directors, acting in its sole
and absolute discretion, without notice to or consent of any Participant or
beneficiary, reserves the right to amend, modify, restate, suspend or terminate
the Program or any Eligible Program at any time, in whole or in part provided
that neither amounts then credited to a Participant's Deferral Account nor the
Participant's Eligible Program Account or the number of Prudential Financial
Restricted Shares issuable under any Award for which all terms and conditions of
such Award have been satisfied are reduced. Upon any amendment, modification or
restatement of an Eligible Program (each, an "Amended Eligible Program"), the
Board of Directors of PSI may prescribe transition or other rules governing
Deferral Election, Award or other provisions applicable to such Amended Eligible
Program.
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Article VI. MISCELLANEOUS
Section 6.1 Claims Procedure; Arbitration; Choice of Law. A
Participant and any beneficiaries designated by the Participant (each, a
"Claimant") may claim a benefit under the Program by making a written request to
the Administrator. The Administrator shall furnish the Claimant with a written
response within a reasonable time. A Claimant may request PSI's Deferred
Compensation Committee (the "Committee") to review a denied claim for benefits
under the Program within a reasonable time not to exceed ninety (90) days after
the receipt by the Claimant of written notice of denial of a claim. After
exhaustion of the remedy provided to Claimants by the Administrator and the
Committee, any unresolved controversy or dispute arising under the Program shall
be submitted to and settled by arbitration in accordance with the
then-prevailing Constitution and Rules of the New York Stock Exchange, Inc. or
of the National Association of Securities Dealers, Inc. Such arbitration will be
conclusive and binding. Judgment based upon the decision of the arbitrators may
be entered in any court having competent jurisdiction thereof. The Program shall
be governed by, and construed and enforced in accordance with the substantive
and procedural laws of the State of New York, without giving effect to the
conflicts of law provisions thereof.
Section 6.2 Compliance with Applicable Laws, Etc. The Program (and the
execution of all transactions contemplated hereby) and the obligations of PSI
and the Agent under the Program shall be subject to all applicable foreign,
Federal and state laws, rules, and regulations, and to such approvals by any
regulatory or governmental agency as may be required, and to any rules or
regulations of any exchange on which Prudential Financial Stock is listed. PSI
may postpone any of its obligations hereunder, the purchase, issuance or
delivery of Prudential Financial Restricted Shares under the terms hereof or any
other action permitted under the Program to permit PSI, with reasonable
diligence, to complete such stock exchange listing or registration or
qualification of such Prudential Financial Stock or other required action under
any foreign, Federal or state law, rule, or regulation and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Prudential
Financial Restricted Shares in compliance with applicable laws, rules, and
regulations. PSI shall not be obligated by virtue of any provision of the
Program to otherwise purchase, sell or issue Prudential Financial Stock in
violation of any such laws, rules, or regulations.
Section 6.3 No Guarantee of Employment. Nothing contained in the
Program or any Eligible Program shall be construed as a contract of employment
between PSI and any Participant or as creating any right of a Participant to
continue in the employment of PSI or any of its affiliates for a particular
length of time. A Participant shall continue to be an "employee-at-will,"
meaning that a Participant may resign at any time and PSI may terminate a
Participant's employment at any time, with or without reason or notice.
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Section 6.4 Participant Expenses. Expenses incurred by Participants
and/or their beneficiaries in connection with any controversy or dispute arising
under the Program, including, but not limited to, legal fees and disbursements,
shall be borne by such Participants and/or their beneficiaries.
Section 6.5 Validity. Any provision or portion of a provision of the
Program deemed to be in violation of any law or regulation in a particular
jurisdiction shall be void and of no effect, and shall not affect the continued
validity of any other provision of the Program, which shall remain in full force
and effect in such jurisdiction; provided further that any deemed invalidity of
a provision in a particular jurisdiction shall not affect the validity of such
provision (or the continued validity of any provision of the Program) in any
other jurisdiction. The obligations of PSI under the Program shall be binding
upon its assignee(s), any successor corporation or organization resulting from
the merger, consolidation or other reorganization or from any reincorporation or
change of name of PSI or upon any change in control.
Section 6.6 Headings. Paragraph titles contained herein are inserted
as a matter of convenience and for reference and in no way define, limit, extend
or describe the scope of the Program or any provision.
Section 6.7 Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender used in the Program shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
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