<Page>
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. )
<Table>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
</Table>
<Table>
PRUDENTIAL 20/20 FOCUS FUND
PRUDENTIAL EQUITY FUND, INC.
PRUDENTIAL INDEX SERIES FUND
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL WORLD FUND, INC.
- ----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- ----------------------------------------------------------------------------
(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):
------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by
/ / Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------
</Table>
<Page>
PRUDENTIAL 20/20 FOCUS FUND
PRUDENTIAL EQUITY FUND, INC.
PRUDENTIAL INDEX SERIES FUND
PRUDENTIAL STOCK INDEX FUND
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL HEALTH SCIENCES FUND
PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL UTILITY FUND
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
PRUDENTIAL TAX-MANAGED EQUITY FUND
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
PRUDENTIAL ACTIVE BALANCED FUND
PRUDENTIAL JENNISON EQUITY OPPORTUNITY FUND
PRUDENTIAL JENNISON GROWTH FUND
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
------------------------
IMPORTANT PROXY MATERIALS
PLEASE VOTE NOW!
[ ], 2003
------------------------
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 the Funds
identified above is scheduled for July 17, 2003. This package contains
information about the proposals and includes materials you will need to vote.
The Board of Directors/Trustees of each Fund has reviewed the proposals and
has 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 1-866-665-7684.
We're glad to help you understand the proposals and assist you in voting. Thank
you for your participation.
/s/ Judy A. Rice
Judy A. Rice
PRESIDENT
<Page>
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 two proposals:
- to elect a new Board of Directors or Trustees, and
- to approve amendments to the Articles of Incorporation or Declaration of
Trust, as applicable, for your Fund.
Q. WHY AM I RECEIVING PROXY INFORMATION FOR 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 may 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 may receive multiple proxy statements. Each proxy
card should be voted and returned.
Q. ARE YOU RECOMMENDING A NEW BOARD FOR THE FUNDS?
A. Yes. The Board of each of the Funds has nominated for election Independent
and Interested Directors or Trustees. Most of the nominees already serve as
Directors or Trustees on some, but not all of the Funds in the Prudential
mutual fund complex.
Q. WILL THE PROPOSED CHANGES RESULT IN HIGHER DIRECTORS' OR TRUSTEES' FEES FOR
A FUND?
A. No. For most of the Funds, the number of Independent Directors or Trustees
will decrease. For Prudential Real Estate Securities Fund and Prudential
World Fund, Inc., the number of Independent Directors or Trustees of each
Fund will increase; however, the aggregate amount of fees paid by each of
these Funds will not increase because the same Independent Directors or
Trustees have been elected to the American Skandia Funds, which will share
in paying the fees.
Q. HOW MANY VOTES DO YOU NEED TO APPROVE THESE PROPOSALS?
A. We need a plurality (for Prudential 20/20 Focus Fund, Prudential Equity
Fund, Inc., Prudential Index Series Fund, Prudential Natural Resources Fund,
Inc., Prudential Sector Funds, Inc., Prudential Small Company Fund, Inc.,
Prudential Tax-Managed Funds, Prudential Tax-Managed Small-Cap Fund, Inc.,
Prudential U.S. Emerging Growth Fund, Inc., The Prudential Investment
Portfolios, Inc., Prudential Real Estate Securities Fund and Prudential
World Fund, Inc.), or a majority (for Prudential Value Fund), of votes cast
to approve Proposal No. 1. For Proposal No. 2, we need the affirmative vote
of a majority of voted shares for each of Prudential 20/20 Focus Fund,
Prudential Index Series Fund, Prudential Real Estate Securities Fund and
Prudential Tax Managed Funds. For Prudential Value Fund, we need the
affirmative vote of two-thirds of the outstanding shares of the Fund. For
each of Prudential Equity Fund, Inc., Prudential Natural Resources Fund,
Inc., Prudential Sector Funds, Inc.--Prudential Technology Fund, Prudential
Health Sciences Fund, Prudential Financial Services Fund, Prudential Utility
Fund--Prudential Small Company Fund, Inc., Prudential Tax-Managed Small-Cap
Fund, Inc., Prudential U.S. Emerging Growth Fund, Inc., Prudential World
Fund, Inc.--Prudential Global Growth Fund, Prudential International Value
Fund, Prudential Jennison International Growth Fund--and The Prudential
Investment Portfolios, Inc.--Prudential Active
<Page>
Balanced Fund, Prudential Jennison Equity Opportunity Fund and Prudential
Jennison Growth Fund, we need the affirmative vote of a majority of the
outstanding securities entitled to vote thereon.
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 joint shareholder meeting at 9:30 a.m. on July 17, 2003, the
meeting may be adjourned to permit further solicitation of proxy votes.
Q. HAS EACH FUND'S BOARD APPROVED THE PROPOSALS?
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 May 16, 2003.
Q. HOW DO I VOTE MY SHARES?
A. You may vote in any of several different ways. You may vote by attending the
Meeting scheduled for July 17, 2003, or 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 a proposal or how to vote your shares, please call
Prudential at 1-866-665-7684.
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" underneath the name of the company.
The attached proxy statement contains more detailed information about each of
the proposals relating to your Fund. Please read it carefully.
<Page>
PRUDENTIAL 20/20 FOCUS FUND
PRUDENTIAL EQUITY FUND, INC.
PRUDENTIAL INDEX SERIES FUND
PRUDENTIAL STOCK INDEX FUND
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL HEALTH SCIENCES FUND
PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL UTILITY FUND
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
PRUDENTIAL TAX-MANAGED EQUITY FUND
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
PRUDENTIAL ACTIVE BALANCED FUND
PRUDENTIAL JENNISON EQUITY OPPORTUNITY FUND
PRUDENTIAL JENNISON GROWTH FUND
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
------------------------
NOTICE OF
JOINT SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON
JULY 17, 2003
------------------------
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 LLC (PI), 100
Mulberry Street, Gateway Center Three, 14th Floor, Newark, New Jersey on
July 17, 2003 at 9:30 a.m. Eastern Daylight Time. The purpose of the Meetings is
to consider and act upon the following proposals:
1. To elect 10 Directors or Trustees.
2. To approve amendments to the Articles of Incorporation or Declaration of
Trust, as applicable ("Charters"), for each Fund.
The Meeting will be a Special Meeting for each Fund.
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 May 16, 2003. If
you attend a Meeting, you may vote your shares
<Page>
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,
<Table>
/s/ Maria G. Master /s/ Jonathan D. Shain
Maria G. Master Jonathan D. Shain
SECRETARY FOR SECRETARY FOR
PRUDENTIAL 20/20 FOCUS FUND PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL EQUITY FUND, INC. PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL INDEX SERIES FUND Prudential Global Growth Fund
Prudential Stock Index Fund Prudential International Value Fund
PRUDENTIAL NATURAL RESOURCES FUND, INC. Prudential Jennison International Growth Fund
PRUDENTIAL SECTOR FUNDS, INC.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
Prudential Tax-Managed Equity Fund
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
Prudential Active Balanced Fund
Prudential Jennison Equity Opportunity Fund
Prudential Jennison Growth Fund
</Table>
Dated: [ ], 2003.
PROXY CARDS FOR YOUR FUND ARE ENCLOSED ALONG WITH THE PROXY STATEMENT. PLEASE
VOTE YOUR SHARES TODAY BY SIGNING AND RETURNING THE ENCLOSED PROXY CARDS 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 CARDS AND FOLLOWING THE SIMPLE INSTRUCTIONS. THE BOARD OF YOUR
FUND RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES AND "FOR" PROPOSAL NO. 2.
<Page>
PRUDENTIAL 20/20 FOCUS FUND
PRUDENTIAL EQUITY FUND, INC.
PRUDENTIAL INDEX SERIES FUND
PRUDENTIAL STOCK INDEX FUND
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL HEALTH SCIENCES FUND
PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL UTILITY FUND
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
PRUDENTIAL TAX-MANAGED EQUITY FUND
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
PRUDENTIAL ACTIVE BALANCED FUND
PRUDENTIAL JENNISON EQUITY OPPORTUNITY FUND
PRUDENTIAL JENNISON GROWTH FUND
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
------------------------
PROXY STATEMENT
JOINT SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON JULY 17, 2003
------------------------
This proxy statement is being furnished to holders of shares of all of the
above-listed investment companies (each, a Company) and their series (each, a
Fund) 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
July 17, 2003, at 9:30 a.m., Eastern Daylight Time, or any adjournment or
adjournments thereof. The Meeting will be a Special Meeting for each Fund. This
proxy statement is being first mailed to shareholders on or about [ ],
2003.
Each Company is an open-end, management investment company registered under
the Investment Company Act of 1940, as amended (the 1940 Act). Each of
Prudential Equity Fund, Inc., Prudential Natural Resources Fund, Inc.,
Prudential Sector Funds, Inc., Prudential Small Company Fund, Inc., Prudential
Tax-Managed Small-Cap Fund, Inc., Prudential U.S. Emerging Growth Fund, Inc.,
The Prudential Investment Portfolios, Inc. and Prudential World Fund, Inc. is
organized as a Maryland corporation. Prudential Value Fund is organized as a
Massachusetts business trust. Each of Prudential 20/20 Focus Fund, Prudential
Index Series Fund, Prudential Real Estate Securities Fund and Prudential
Tax-Managed Funds is organized as a Delaware statutory trust. The shares of
common stock of each of Prudential Equity Fund, Inc., Prudential Natural
Resources Fund, Inc., Prudential Sector Funds, Inc.,
<Page>
Prudential Small Company Fund, Inc., Prudential Tax-Managed Small-Cap Fund,
Inc., Prudential U.S. Emerging Growth Fund, Inc., The Prudential Investment
Portfolios, Inc. and Prudential World Fund, Inc. and the shares of beneficial
interest of Prudential Value Fund, Prudential 20/20 Focus Fund, Prudential Index
Series Fund, Prudential Real Estate Securities Fund and Prudential Tax-Managed
Funds are referred to as "Shares," the holders of the Shares are "Shareholders,"
each Company's board of directors or trustees is referred to as a "Board" and
the directors or trustees are "Board Members" or may be collectively referred to
as "Directors". A listing of the formal name for each Company and Fund and the
abbreviated name for each Company and Fund that is used in this proxy statement
are set forth below.
<Table>
<Caption>
ABBREVIATED
COMPANY AND FUND NAME NAME
- --------------------- ---------------------------------
Prudential 20/20 Focus Fund.............................. 20/20
Prudential Equity Fund, Inc.............................. Equity
Prudential Index Series Fund............................. Index Series
Prudential Stock Index Fund.......................... INDEX SERIES Stock Index
Prudential Natural Resources Fund, Inc................... Natural Resources
Prudential Sector Funds, Inc............................. Sector Funds
Prudential Financial Services Fund................... SECTOR FUNDS Financial Services
Prudential Health Sciences Fund...................... SECTOR FUNDS Health Sciences
Prudential Technology Fund........................... SECTOR FUNDS Technology
Prudential Utility Fund.............................. SECTOR FUNDS Utility
Prudential Small Company Fund, Inc....................... Small Company
Prudential Tax-Managed Funds............................. Tax Managed
Prudential Tax-Managed Equity Fund................... TAX MANAGED Tax Equity
Prudential Tax-Managed Small-Cap Fund, Inc............... Small Cap
Prudential U.S. Emerging Growth Fund, Inc................ Emerging Growth
Prudential Value Fund.................................... Value
The Prudential Investment Portfolios, Inc................ PIP
Prudential Active Balanced Fund...................... PIP Active Balanced
Prudential Jennison Equity Opportunity Fund.......... PIP Equity Opportunity
Prudential Jennison Growth Fund...................... PIP Growth
Prudential Real Estate Securities Fund................... Real Estate
Prudential World Fund, Inc............................... World
Prudential Global Growth Fund........................ WORLD Global Growth
Prudential International Value Fund.................. WORLD International Value
Prudential Jennison International Growth Fund........ WORLD International Growth
</Table>
Prudential Investments LLC (PI 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. Investment advisory services have been
provided to the Funds by PI through its two affiliates, Jennison Associates LLC
(Jennison) and Prudential Investment Management, Inc. (PIM). Jennison is located
at 466 Lexington Avenue, New York, New York 10017. It serves as subadviser to
20/20, Equity, Natural Resources, Sector Funds, Small Company, Emerging Growth,
PIP Equity Opportunity and PIP Growth and Value, WORLD Global Growth and WORLD
International Growth. PIM is located at Gateway Center Two, 100 Mulberry Street,
Newark, New Jersey 07102. PIM serves as subadviser to Index Series, Tax Managed,
Small Cap, and PIP Active Balanced. Until June [ ], 2003, PIM also subadvised a
portion of the assets of Sector Funds. In addition, Equity is also subadvised by
GE Asset Management, Incorporated (GEAM) and Salomon Brothers Asset Management
Inc. (SaBAM). GEAM is located at 3003 Summer Street, Stamford, Connecticut
06904. SaBAM is located at 399 Park Avenue, New York, New York 10022. Real
Estate is subadvised by Wellington Management Company, LLP (Wellington). Its
address is located at 75 State Street, Boston, Massachusetts 02109. WORLD
International Value is
2
<Page>
subadvised by Bank of Ireland Asset Management (U.S.) Limited (BIAM (U.S.)
Limited). Its address is located at 75 Holly Hill Lane, Greenwich, Connecticut
06830.
Each Fund has a Board of Directors or Trustees that, in addition to
overseeing the actions of the Fund's Manager and Subadvisers, decides upon
matters of general policy.
VOTING INFORMATION
In the case of all of the Companies, except for 20/20, Index Series, Tax
Managed, Real Estate, Small Cap and Emerging Growth, the presence, in person or
by proxy, of a majority of the Shares of a Company outstanding and entitled to
vote will constitute a quorum for the transaction of business at the Meeting of
that Company. In the case of 20/20, Index Series, Tax Managed and Real Estate,
the presence, in person or by proxy, of forty percent (40%) of the Shares of
each Company outstanding and entitled to vote will constitute a quorum for the
transaction of business at the Meetings of each of these Companies. For each of
Small Cap and Emerging Growth, the presence, in person or by proxy, of one-third
of the Shares of each Company outstanding and entitled to vote will constitute a
quorum for the transaction of business at the Meetings of each of these
Companies.
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 present and entitled to vote at
the Meeting in person or by proxy. When voting on a proposed adjournment, the
persons named as proxies will vote FOR the proposed adjournment all shares other
than those shares as to which they have been directed to vote against a
Proposal, in which case, such shares will be voted AGAINST the proposed
adjournment with respect to that Proposal. 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 Proposal No. 1 for which the required vote is a plurality, or majority, of
the votes cast, but effectively will be a vote against adjournment and against
Proposal No. 2, which requires approval of a majority of the outstanding voting
securities.
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
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 Company
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 Company prior to the related Meeting and must indicate your name
and account number. In addition, if you attend a Meeting in person you may, if
you wish, vote by ballot at that Meeting, thereby canceling any proxy previously
given.
3
<Page>
The close of business on May 16, 2003 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:
<Table>
<Caption>
FUND CLASS A CLASS B CLASS C CLASS Z TOTAL
- ---- ----------- ----------- ----------- ----------- -----------
20/20..........................
Equity.........................
INDEX SERIES Stock Index.......
Natural Resources..............
SECTOR FUNDS Financial
Services.....................
SECTOR FUNDS Health Sciences...
SECTOR FUNDS Technology........
SECTOR FUNDS Utility...........
Small Company..................
TAX MANAGED Tax Equity.........
Small Cap......................
Emerging Growth................
Value..........................
PIP Active Balanced............
PIP Equity Opportunity.........
PIP Growth.....................
Real Estate....................
WORLD Global Growth............
WORLD International Value......
WORLD International Growth.....
</Table>
None of the Proposals requires separate voting by class. Shareholders of
each Company vote together on Proposal No. 1. Shareholders of each Fund of the
Sector Funds, PIP and World vote separately on Proposal No. 2. 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 each Fund as of May 16, 2003. A listing of
persons who owned beneficially more than 5% of any class of the Shares of a Fund
as of May 16, 2003 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 each 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.
4
<Page>
TO ELECT DIRECTORS OR TRUSTEES
PROPOSAL NO. 1
DISCUSSION
The Board of each Company has nominated the 10 individuals identified below
for election to each Company's Board. Pertinent information about each nominee
is set forth in the listing below. Each of the nominees has indicated a
willingness to serve if elected. All but one of the nominees currently serve as
Directors or Trustees on some, but not all, of the funds in the Prudential
retail mutual fund complex. The remaining nominee (Mr. Carson) currently does
not serve as a Director or Trustee for any of the funds in the Prudential retail
mutual fund complex, but serves as a Director of the American Skandia Advisor
Funds, Inc.
Because many of the other funds within the Prudential retail mutual fund
complex are also asking shareholders to elect the same individuals, if the
Shareholders of each of these Companies elect each nominee, most of the
Companies within the Prudential retail mutual fund complex will be overseen by a
common Board. As part of the creation of a common Board, certain individuals
currently serving as Directors or Trustees of each Company who have not been
nominated for election have announced their intention to resign their positions
if Shareholders elect the nominees. Each of the nominees have announced their
intention to serve on the Board if elected by Shareholders.
Each Company's current Directors or Trustees believes that creating a common
Board is in the best interests of each Company. The principal reasons for adding
these individuals are:
- to bring additional experience and diversity of viewpoints to the Board;
- to bring the benefit of experience derived from service on the boards of
the other Prudential mutual funds;
- to promote continuity on the Board; and
- to achieve efficiencies and coordination in operation, supervision and
oversight of the Funds which may be derived from having the same
individuals serve on the Board of most of the Prudential retail mutual
funds.
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 expire
in accordance with each Company's retirement policy or (c) until they resign or
are removed as permitted by law. Each Company's retirement policy generally
calls for the retirement of Directors on December 31 of the year in which they
reach the age of 75.
Board Members who are not interested persons of a Company (as defined in the
1940 Act) are referred to as Independent Board Members or Independent Directors.
Board Members who are interested persons of a Company are referred to as
Interested Board Members or Interested Directors.
Currently, each Independent Director who serves on the Board of a Company is
paid annual fees as set forth below for his or her service on the Board of each
Company. 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. Interested Directors 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 Company's Board.
5
<Page>
None of the nominees is related to another. None of each Company's
Independent Directors nor persons nominated to become Independent Directors owns
shares of Prudential Financial, Inc. or its affiliates. The business experience
and address of each Independent Director nominee and each Interested Director
nominee (each a "Nominee"), as well as information regarding their service on
other mutual funds in the Prudential mutual fund complex, is as follows:
PROPOSED INDEPENDENT DIRECTOR NOMINEES
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
TERM OF FUND COMPLEX
POSITION(S) OFFICE AND OVERSEEN BY
HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
NAME, ADDRESS* AND AGE EACH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR
- ---------------------- -------------------- ---------------- -------------------------- ----------------
David E. A. Carson None -- Director (January 2000 to None
(68) May 2000), Chairman
People's Bank (January 1999 to December
1 Financial Plaza 1999), Chairman and Chief
Second Floor Executive Officer (January
Hartford, CT 06103 1998 to December 1998) and
President, Chairman and
Chief Executive Officer
(1983 to December 1997) of
People's Bank.
Robert E. La Blanc 20/20: None -- President (since 1981) of [77]
(69) Equity: None -- Robert E. La Blanc
Index Series: None -- Associates, Inc.
Natural Resources: -- (telecommunications);
None formerly General Partner
Sector Funds: None -- at Salomon Brothers and
Small Company: None -- Vice- Chairman of
Tax Managed: None Continental Telecom.
Small Cap: None -- Trustee of Manhattan
Emerging Growth: College.
None --
Value: None --
PIP: None
--
--
Real Estate: Trustee since 2001
World: Director since 1984
<Caption>
OTHER DIRECTORSHIPS**
HELD BY NOMINEE
NAME, ADDRESS* AND AGE FOR DIRECTOR
- ---------------------- --------------------------
David E. A. Carson Director of United
(68) Illuminating and UIL
People's Bank Holdings, a utility
1 Financial Plaza company, since May 1993.
Second Floor
Hartford, CT 06103
Robert E. La Blanc Director of Storage
(69) Technology Corporation
(technology) (since 1979),
Chartered Semiconductor
Manufacturing, Ltd.
(Singapore) (since 1998),
Titan Corporation
(electronics, since 1995),
Computer Associates
International, Inc. (since
2002) (software company);
Director (since 1999) of
First Financial
Fund, Inc. and Director
(since April 1999) of The
High Yield Plus
Fund, Inc.
</Table>
6
<Page>
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
TERM OF FUND COMPLEX
POSITION(S) OFFICE AND OVERSEEN BY
HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
NAME, ADDRESS* AND AGE EACH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR
- ---------------------- -------------------- ---------------- -------------------------- ----------------
Douglas H. 20/20: Trustee since 1998 Chairman (since February [77]
McCorkindale (63) Equity: Director since 1996 2001), Chief Executive
Index Series: since 1996 Officer (since June 2000)
Trustee and President (since
Natural Resources: since 2000 September 1997) of Gannett
Director Co. Inc. (publishing and
Sector Funds: since 1996 media); formerly Vice
Director Chairman (March 1984-May
Small Company: since 1996 2000) of Gannett Co. Inc.
Director
Tax Managed: Trustee since 1998
Small Cap: Director
Emerging Growth: since 1997
Director
Value: Trustee since 1996
PIP: Director since 1987
Real Estate: None since 1996
World: None --
--
Stephen P. Munn (60) 20/20: Trustee since 1998 Chairman of the Board [72]
Equity: Director since 1996 (since 1994) and formerly
Index Series: since 1996 Chief Executive Officer
Trustee (1988-2001) and President
Natural Resources: since 2000 of Carlisle Companies
Director Incorporated.
Sector Funds: since 1996
Director
Small Company: since 1991
Director
Tax Managed: Trustee since 1998
Small Cap: Director
since 1997
Emerging Growth: since 1996
Director
Value: Trustee since 1996
PIP: Director since 1996
Real Estate: None --
World: None --
<Caption>
OTHER DIRECTORSHIPS**
HELD BY NOMINEE
NAME, ADDRESS* AND AGE FOR DIRECTOR
- ---------------------- --------------------------
Douglas H. Director of Gannett
McCorkindale (63) Co., Inc., Director of
Continental
Airlines, Inc. (since May
1993); Director of
Lockheed Martin Corp.
(aerospace and defense)
(since May 2001); Director
of The High Yield Plus
Fund, Inc. (since 1996).
Stephen P. Munn (60) Chairman of the Board
(since January 1994) and
Director (since 1988) of
Carlisle Companies
Incorporated (manufacturer
of industrial products);
Director of Gannett Co.,
Inc. (publishing and
media).
</Table>
7
<Page>
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
TERM OF FUND COMPLEX
POSITION(S) OFFICE AND OVERSEEN BY
HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
NAME, ADDRESS* AND AGE EACH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR
- ---------------------- -------------------- ---------------- -------------------------- ----------------
Richard A. Redeker 20/20: Trustee since 1998 Formerly Management [72]
(59) Equity: Director since 1993 Consultant of Investmart,
Index Series: since 1996 Inc. (August 2001-October
Trustee 2001); formerly employee
Natural Resources: since 2000 of Prudential Investments
Director (October 1996-December
Sector Funds: since 1993 1998).
Director
Small Company: since 1995
Director
Tax Managed: Trustee since 1998
Small Cap: Director
Emerging Growth: since 1997
Director since 1996
Value: Trustee
PIP: Director since 1993
Real Estate: None since 1995
World: None --
--
Robin B. Smith (63) 20/20: Trustee since 1998 Chairman of the Board [69]
Equity: Director since 1996 (since January 2003) of
Index Series: since 1996 Publishers Clearing House
Trustee (direct marketing);
Natural Resources: since 1996 formerly Chairman and
Director Chief Executive Officer
Sector Funds: since 1996 (August 1996-January 2003)
Director of Publishers Clearing
Small Company: since 1996 House.
Director
Tax Managed: Trustee since 1998
Small Cap: Director
Emerging Growth: since 1997
Director since 1996
Value: Director
PIP: Director since 1996
Real Estate: Trustee since 1995
World: Director since 1997
since 1996
<Caption>
OTHER DIRECTORSHIPS**
HELD BY NOMINEE
NAME, ADDRESS* AND AGE FOR DIRECTOR
- ---------------------- --------------------------
Richard A. Redeker
(59)
Robin B. Smith (63) Director of BellSouth
Corporation (since 1992)
and formerly Director of
Kmart Corporation (retail)
(1996-2003).
</Table>
8
<Page>
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
TERM OF FUND COMPLEX
POSITION(S) OFFICE AND OVERSEEN BY
HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
NAME, ADDRESS* AND AGE EACH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR
- ---------------------- -------------------- ---------------- -------------------------- ----------------
Stephen Stoneburn (59) 20/20: None -- President and Chief [75]
Equity: None -- Executive Officer (since
Index Series: None -- June 1996) of Quadrant
Natural Resources: -- Media Corp. (a publishing
None company); formerly
Sector Funds: None -- President (June 1995-June
Small Company: None -- 1996) of Argus Integrated
Tax Managed: None -- Media, Inc.; Senior Vice
Small Cap: None -- President and Managing
Emerging Growth: -- Director (January
None 1993-1995) of Cowles
Value: None -- Business Media and Senior
PIP: None -- Vice President of
Real Estate: Trustee since 2001 Fairchild Publications,
World: Director Inc (1975-1989).
since 1996
Clay T. Whitehead (64) 20/20: Trustee since 1998 President (since 1983) of [94]
Equity: Director since 1996 National Exchange Inc.
Index Series: since 1996 (new business development
Trustee firm).
Natural Resources: since 1999
Director
Sector Funds: since 1996
Director
Small Company: since 1996
Director
Tax Managed: Trustee since 1998
Small Cap: Director
Emerging Growth: since 1997
Director since 1996
Value: Trustee
PIP: Director since 1996
Real Estate: Trustee since 1996
World: Director since 1997
since 1984
<Caption>
OTHER DIRECTORSHIPS**
HELD BY NOMINEE
NAME, ADDRESS* AND AGE FOR DIRECTOR
- ---------------------- --------------------------
Stephen Stoneburn (59) None
Clay T. Whitehead (64) Director (since 2000) of
First Financial
Fund, Inc. and Director
(since 2000) of The High
Yield Plus Fund, Inc.
</Table>
9
<Page>
PROPOSED INTERESTED DIRECTOR NOMINEES
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
TERM OF FUND COMPLEX
POSITION(S) OFFICE AND OVERSEEN BY
NAME, ADDRESS* AND HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
AGE EACH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR
- -------------------- ------------- ------------- ------------------------------------ -------------
Judy A. Rice (55) President and Director or President, Chief Executive Officer, [98]
Director or Trustee for Chief Operating Officer and Officer-
Trustee all Funds, In-Charge (since 2003) of PI;
since 2000; formerly various positions to Senior
President of Vice President (1992-1999) of
all Funds Prudential Securities Incorporated
since 2003 (PSI); and various positions to
Managing Director (1975-1992) of
Salomon Smith Barney; Member of
Board of Governors of the Money
Management Institute.
Robert F. Gunia (56) Vice 20/20: since Executive Vice President and Chief [116]
President and 1998 Administrative Officer (since June
Director or Equity: since 1999) of PI; Executive Vice
Trustee 1996 President and Treasurer (since
Index Series: January 1996) of PI; President
since 1996 (since April 1999) of Prudential
Natural Investment Management Services LLC
Resources: (PIMS); Corporate Vice President
since 1996 (since September 1997) of The
Sector Funds: Prudential Insurance Company of
since 1996 America (Prudential); formerly
Small Senior Vice President (March
Company: 1987-May 1999) of PSI; formerly
since 1996 Chief Administrative Officer (July
Tax Managed: 1989-September 1996), Director
since 1998 (January 1989-September 1996), and
Small Cap: Executive Vice President, Treasurer
since 1997 and Chief Financial Officer (June
Emerging 1987-December 1996) of Prudential
Growth: since Mutual Fund Management, Inc. (PMF)
1996
Value: since
1996
PIP: since
1996
Real Estate:
since 1997
World:
since 1996
<Caption>
OTHER DIRECTORSHIPS**
NAME, ADDRESS* AND HELD BY NOMINEE
AGE FOR DIRECTOR
- -------------------- ------------------------------------
Judy A. Rice (55) None
Robert F. Gunia (56) Director (since May 1989) and
Treasurer (since 1999) of The Asia
Pacific Fund, Inc.
</Table>
- ------------------------
* Unless otherwise noted, the address of each Nominee is c/o Prudential
Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ
07102.
** This column includes only directorships of companies required to register,
or file reports with the Securities and Exchange Commission (the "SEC")
under the Securities Exchange Act of 1934 (that is, "public companies") or
other investment companies registered under the 1940 Act.
10
<Page>
The following tables set forth the dollar range of Fund securities held by
each Nominee as of December 31, 2002. The tables also include the aggregate
dollar range of securities held by each Nominee in all funds in the Fund Complex
overseen by that Nominee as of December 31, 2002.
SHARE OWNERSHIP TABLE -- INDEPENDENT DIRECTOR NOMINEES
<Table>
<Caption>
AGGREGATE DOLLAR RANGE
OF SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
DOLLAR RANGE OF NOMINEE IN FAMILY
NAME OF NOMINEE SECURITIES IN EACH FUND OF INVESTMENT COMPANIES
- --------------- ----------------------------------- -----------------------
David E. A. Carson................ None None
Robert E. La Blanc................ WORLD Global Growth: Over $100,000
$10,001-$50,000 (Class A)
WORLD International Value:
$1-$10,000 (Class A)
Real Estate: $10,001-$50,000
All other Funds: None
Douglas H. McCorkindale........... 20/20: $10,001-$50,000 Over $100,000
Equity: $10,001-$50,000
Natural Resources: $50,001-$100,000
SECTOR FUNDS Utility:
$10,001-$50,000
Small Company: $10,001-$50,000
Emerging Growth: $10,001-$50,000
Value: $1-$10,000
PIP Equity Opportunity:
$10,001-$50,000
PIP Growth: $10,001-$50,000
All other Funds: None
Stephen P. Munn................... 20/20: $10,001-$50,000 Over $100,000
Equity: $10,001-$50,000
INDEX SERIES Stock Index:
$1-$10,000
Natural Resources: $10,001-$50,000
SECTOR FUNDS Financial Services:
$10,001-$50,000
SECTOR FUNDS Health Sciences:
$1-$10,000
SECTOR FUNDS Technology: $1-$10,000
SECTOR FUNDS Utility:
$10,001-$50,000
Small Company: $10,001-$50,000
TAX MANAGED Tax Equity: $1-$10,000
Emerging Growth: $10,001-$50,000
Value: $1-$10,000
PIP Active Balanced:
$10,001-$50,000
PIP Equity Opportunity:
$10,001-$50,000
PIP Growth: $1-$10,000
All other Funds: None
</Table>
11
<Page>
<Table>
<Caption>
AGGREGATE DOLLAR RANGE
OF SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
DOLLAR RANGE OF NOMINEE IN FAMILY
NAME OF NOMINEE SECURITIES IN EACH FUND OF INVESTMENT COMPANIES
- --------------- ----------------------------------- -----------------------
Richard A. Redeker................ Emerging Growth: $50,001-$100,000 Over $100,000
Value: $1-$10,000
PIP Growth: over $100,000
All other Funds: None
Robin B. Smith.................... 20/20: $1-$10,000 Over $100,000
Equity: $10,001-$50,000
INDEX SERIES Stock Index:
$10,001-$50,000
Natural Resources: $10,001-$50,000
SECTOR FUNDS Financial Services:
$1-$10,000
SECTOR FUNDS Health Sciences:
$1-$10,000
SECTOR FUNDS Technology: $1-$10,000
SECTOR FUNDS Utility: over $100,000
Small Company: $10,001-$50,000
TAX MANAGED Tax Equity: $1-$10,000
Small Cap: $1-$10,000
Emerging Growth: $1-$10,000
Value: $10,001-$50,000
PIP Active Balanced:
$10,001-$50,000
PIP Equity Opportunity:
$10,001-$50,000
PIP Growth: $50,001-$100,000
Real Estate: $1-$10,000
WORLD Global Growth: $1-$10,000
WORLD International Value:
$10,001-$50,000
WORLD International Growth:
$1-$10,000
All other Funds: None
Stephen Stoneburn................. WORLD Global Growth: Over $100,000
$10,001-$50,000
All other Funds: None
Clay T. Whitehead................. 20/20: $10,001-$50,000 Over $100,000
INDEX SERIES Stock Index:
$10,001-$50,000
SECTOR FUNDS Technology: $1-$10,000
PIP Growth: $10,001-$50,000
WORLD International Growth:
$1-$10,000
All other Funds: None
</Table>
12
<Page>
SHARE OWNERSHIP TABLE -- INTERESTED DIRECTOR NOMINEES
<Table>
<Caption>
AGGREGATE DOLLAR RANGE
OF SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
DOLLAR RANGE OF NOMINEE IN FAMILY OF
NAME OF NOMINEE SECURITIES IN EACH FUND INVESTMENT COMPANIES
- --------------- ----------------------------------- ----------------------
Robert F. Gunia................... 20/20: $10,001-$50,000 Over $100,000
Equity: $10,001-$50,000
INDEX SERIES Stock Index:
$10,001-$50,000 (Class I and Z)
SECTOR FUNDS Utility:
$1-$10,000 (Class A)
$10,001-$50,000 (Class Z)
PIP Active Balanced: $1-$10,000
PIP Growth:
$1-$10,000 (Class A)
$10,001-$50,000 (Class Z)
WORLD Global Growth:
$1-$10,000 (Class A)
$10,001-$50,000 (Class Z)
WORLD International Value:
$10,001-$50,000 (Class Z)
All other Funds: None
Judy A. Rice...................... 20/20: $10,001-$50,000 Over $100,000
Equity: $50,001-$100,000
SECTOR FUNDS Utility: over $100,000
Small Company: $10,001-$50,000
PIP Active Balanced:
$10,001-$50,000
PIP Growth: over $100,000
WORLD International Value:
$1-$10,000 (Class Z)
All other Funds: None
</Table>
None of the Independent Director Nominees, or any member of his/her
immediate family, owned beneficially or of record any securities in an
investment adviser or principal underwriter of a Fund or a person (other than a
registered investment company) directly or indirectly controlling, controlled
by, or under common control with an investment adviser or principal underwriter
of a Fund as of December 31, 2002.
The following table sets forth information describing the aggregate
compensation paid by each Fund for each Fund's most recently completed fiscal
year and by the Fund Complex for the calendar year ended December 31, 2002 to
each of the Nominees for his/her services:
COMPENSATION PAID TO INDEPENDENT DIRECTOR NOMINEES
<Table>
<Caption>
PENSION OR
RETIREMENT BENEFITS ESTIMATED
NAME OF INDEPENDENT DIRECTOR AGGREGATE COMPENSATION ACCRUED AS PART OF ANNUAL BENEFITS
NOMINEE, POSITION(1) FROM EACH FUND FUND EXPENSES UPON RETIREMENT
- -------------------- --------------------------------- ------------------- ----------------
David E. A. Carson None None None
Robert E. La Blanc -- Director Real Estate: $1,200 None None
World: $4,475
<Caption>
TOTAL 2002
COMPENSATION
FROM FUND AND
NAME OF INDEPENDENT DIRECTOR FUND COMPLEX PAID
NOMINEE, POSITION(1) TO NOMINEES
- -------------------- -------------------
David E. A. Carson None
Robert E. La Blanc -- Director $137,250 (20/77)(3)
</Table>
13
<Page>
<Table>
<Caption>
PENSION OR
RETIREMENT BENEFITS ESTIMATED
NAME OF INDEPENDENT DIRECTOR AGGREGATE COMPENSATION ACCRUED AS PART OF ANNUAL BENEFITS
NOMINEE, POSITION(1) FROM EACH FUND FUND EXPENSES UPON RETIREMENT
- -------------------- --------------------------------- ------------------- ----------------
Douglas H. McCorkindale(2) -- 20/20: $1,725 None None
Director Equity: $2,875
Index Series: $2,525
Natural Resources: $600
Sector Funds: $7,350
Small Company: $1,475
Tax Managed: $1,400
Small Cap: $1,200
Emerging Growth: $1,513
Value: $1,900
PIP: $7,050
Stephen P. Munn -- Director 20/20: $1,725 None None
Equity: $2,875
Index Series: $2,633
Natural Resources: $600
Sector Funds: $7,350
Small Company: $1,518
Tax Managed: $1,406
Small Cap: $1,200
Emerging Growth: $1,521
Value: $1,917
PIP: $7,150
Richard A. Redeker -- Director 20/20: $1,725 None None
Equity: $2,875
Index Series: $2,903
Natural Resources: $600
Sector Funds: $7,350
Small Company: $1,475
Tax Managed: $1,400
Small Cap: $1,200
Emerging Growth: $1,513
Value: $1,900
PIP: $7,050
Robin B. Smith(2) -- Director 20/20: $1,813 None None
Equity: $3,137
Index Series: $2,831
Natural Resources: $1,250
Sector Funds: $7,726
Small Company: $1,479
Tax Managed: $1,416
Small Cap: $1,200
Emerging Growth: $1,579
Value: $1,983
PIP: $7,600
Real Estate: $1,200
World: $4,491
Stephen Stoneburn -- Director Real Estate: $1,200 None None
World: $4,609
<Caption>
TOTAL 2002
COMPENSATION
FROM FUND AND
NAME OF INDEPENDENT DIRECTOR FUND COMPLEX PAID
NOMINEE, POSITION(1) TO NOMINEES
- -------------------- -------------------
Douglas H. McCorkindale(2) -- $115,000 (18/77)(3)
Director
Stephen P. Munn -- Director $118,000 (23/72)(3)
Richard A. Redeker -- Director $120,500 (23/72)(3)
Robin B. Smith(2) -- Director $120,500 (26/69)(3)
Stephen Stoneburn -- Director $120,250 (18/75)(3)
</Table>
14
<Page>
<Table>
<Caption>
PENSION OR
RETIREMENT BENEFITS ESTIMATED
NAME OF INDEPENDENT DIRECTOR AGGREGATE COMPENSATION ACCRUED AS PART OF ANNUAL BENEFITS
NOMINEE, POSITION(1) FROM EACH FUND FUND EXPENSES UPON RETIREMENT
- -------------------- --------------------------------- ------------------- ----------------
Clay T. Whitehead -- Director 20/20: $1,725 None None
Equity: $3,475
Index Series: $3,182
Natural Resources: $1,250
Sector Funds: $8,275
Small Company: $1,575
Tax Managed: $1,500
Small Cap: $1,200
Emerging Growth: $1,613
Value: $2,100
PIP: $8,300
Real Estate: $1,200
World: $4,475
<Caption>
TOTAL 2002
COMPENSATION
FROM FUND AND
NAME OF INDEPENDENT DIRECTOR FUND COMPLEX PAID
NOMINEE, POSITION(1) TO NOMINEES
- -------------------- -------------------
Clay T. Whitehead -- Director $196,750 (32/94)(3)
</Table>
- ------------------------
(1) Interested Directors do not receive any compensation from the Companies or
the Fund Complex.
(2) Although the last column shows the total amount paid to Directors from the
Fund Complex during the calendar year ended December 31, 2002, such
compensation was deferred at the election of the Directors, in total or in
part, under the Company's deferred fee agreements. Including accrued
interest and the selected Prudential Fund's rate of return on amounts
deferred through December 31, 2002, the total amount of compensation for the
year amounted to $58,669 and $67,374 for Mr. McCorkindale and Ms. Smith,
respectively.
(3) Indicates number of funds/portfolios in Fund Complex (including Funds) to
which aggregate compensation relates. The Fund Complex consists of [45]
funds and [117] portfolios.
If elected, the Directors will hold office generally without limit except
that (a) any Director may resign; (b) any Director may be removed by the holders
of not less than a majority of the Company's outstanding Shares entitled to vote
on the election of Directors or Trustees (or, with respect to 20/20, Index
Series, Tax Managed and Real Estate, by the holders of not less than two-thirds
of the Company's outstanding Shares entitled to vote on the election of
Trustees); and (c) each Company's retirement policy generally calls for the
retirement of Directors on December 31 of the year in which they reach the age
of 75. In the event of a vacancy on the Board, the remaining Directors will fill
such vacancy by appointing another Director, so long as immediately, after such
appointment, at least two-thirds of the Directors have been elected by
shareholders.
The Board of each Company, with the exception of Real Estate and World, is
currently composed of three Interested Directors and ten Independent Directors,
and met four times during the twelve months ended December 31, 2002. The Board
of Real Estate and World is currently composed of three Interested Directors and
six Independent Directors and met four times during the twelve months ended
December 31, 2002. Each incumbent Director attended each of these meetings, with
the exception of Ms. Smith, who attended three meetings. It is expected that the
Directors will meet at least four times a year at regularly scheduled meetings.
Each Company has an Audit Committee, which is composed entirely of
Independent Directors, and normally meets four times a year, or as required, in
conjunction with the meetings of the Board of Directors. Among other things,
each Fund's Audit Committee has the following responsibilities:
- Recommending to the Board of Directors of each Company the selection,
retention or termination, as appropriate, of the independent accountants
of a Fund.
- Reviewing the independent accountants' compensation, the proposed terms of
their engagement, and their independence.
15
<Page>
- Reviewing audited annual financial statements, including any adjustments
to those statements recommended by the independent accountants, and any
significant issues that arose in connection with the preparation of those
financial statements.
- Reviewing changes in accounting policies or practices that had or are
expected to have a significant impact on the preparation of financial
statements.
- Generally acting as a liaison between the independent accountants and the
Board of Directors.
For each Company except Real Estate and World, the members of each Company's
Audit and Nominating Committees are Saul K. Fenster, Delayne Dedrick Gold,
Douglas H. McCorkindale, W. Scott McDonald, Jr., Thomas T. Mooney, Stephen P.
Munn, Richard A. Redeker, Robin B. Smith, Louis A. Weil, III, and Clay T.
Whitehead. For Real Estate and World, the members of each Company's Audit and
Nominating Committees are Delayne Dedrick Gold, Robert E. La Blanc, Robin B.
Smith, Stephen Stoneburn and Clay T. Whitehead. During the twelve months ended
December 31, 2002, the Audit Committee of each Company met four times.
The firm of PricewaterhouseCoopers LLP (PwC), 1177 Avenue of the Americas,
New York, New York 10036, is the independent accountant for each Fund. Each
Company's Audit Committee recommended, and the Board of each Company (including
a majority of the Independent Directors) approved, the selection of PwC as the
Fund's independent accountant for the Fund's current fiscal year.
Representatives of PwC are not expected to be present at the Meetings, however,
they will have the opportunity to make a statement if they so desire but will
not be available during the meeting to respond to appropriate questions. [The
Audit Committee intends to review the provision of services rendered for
non-audit services as disclosed under "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" below to ensure that the services are
compatible with maintaining the independence of PwC in its audit of each Fund].
In accordance with Independence Standards Board No. 1, PwC, each Fund's
independent accountant for the Fund's most recently completed fiscal year, as
indicated above, has confirmed to the Audit Committee that they are independent
with respect to each Fund. PwC has confirmed the following information:
- AUDIT FEES: The following aggregate fees were billed by PwC for
professional services rendered for the audit of each Fund's annual
financial statements for their most recently completed fiscal years as
indicated below.
<Table>
<Caption>
FUND FISCAL YEAR END AUDIT FEES
- ---- --------------- ----------
20/20....................................................... 1/31/03 $29,000
Equity...................................................... 12/31/02 $32,500
INDEX SERIES Stock Index.................................... 9/30/02 $29,500
Natural Resources........................................... 5/31/02 $35,000
SECTOR FUNDS Financial Services............................. 11/30/02 $28,000
SECTOR FUNDS Health Sciences................................ 11/30/02 $28,000
SECTOR FUNDS Technology..................................... 11/30/02 $28,000
SECTOR FUNDS Utility........................................ 11/30/02 $34,500
Small Company............................................... 9/30/02 $27,000
TAX MANANGED Tax Equity..................................... 10/31/02 $28,000
Small Cap................................................... 10/31/02 $27,000
Emerging Growth............................................. 10/31/02 $28,000
Value....................................................... 10/31/02 $28,000
PIP Active Balanced......................................... 9/30/02 $28,000
PIP Equity Opportunity...................................... 9/30/02 $28,000
PIP Growth.................................................. 9/30/02 $28,000
Real Estate................................................. 3/31/03 $27,000
WORLD Global Growth......................................... 10/31/02 $39,000
WORLD International Value................................... 10/31/02 $39,000
WORLD International Growth.................................. 10/31/02 $39,000
</Table>
16
<Page>
- FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: PwC billed
no fees for professional services rendered to the Funds for information
technology services relating to financial information systems design and
implementation for each Fund's most recently completed fiscal year, as
indicated above. Similarly, PwC billed no fees for professional services
rendered to the Funds' manager, and any entities controlling, controlled
by or under common control with the Funds' manager that provide services
to the Funds, for information technology services relating to financial
information systems design and implementation for each Fund's most
recently completed fiscal years, as indicated above.
- ALL OTHER FEES: The aggregate fees billed by PwC for services rendered to
each Fund, the Fund's Manager and any entity controlling, controlled by or
under common control with the Funds' Manager that provides services to the
Funds, amounted to approximately $1,485,000 for the calendar year ended
December 31, 2002.
Nominating Committee members confer periodically and hold meetings as
required. The responsibilities of the Nominating Committee include, but are not
limited to, recommending to the Board the individuals to be nominated to become
Independent Directors. During the twelve months ended December 31, 2002, no
Company's Nominating Committees met. The Companies do not have compensation
committees. Each Company's Nominating Committee generally will not consider
nominees recommended by Shareholders.
Information about the number of Board and Committee meetings held during the
most recent fiscal year for each Company is included in Exhibit B. Information
concerning Company officers is set forth in Exhibit C.
REQUIRED VOTE
The nominees receiving the affirmative vote of a plurality 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.
17
<Page>
TO APPROVE AMENDMENTS TO THE ARTICLES OF INCORPORATION
OR DECLARATION OF TRUST FOR EACH COMPANY
PROPOSAL NO. 2
THIS PROPOSAL APPLIES TO EACH COMPANY AS DESCRIBED BELOW.
BACKGROUND
The Board of each Company has approved, submitted for shareholder approval,
and recommends that shareholders approve, amendments (collectively, the "Charter
Amendments") to each Company's governing documents, which are either a
declaration of trust or articles of incorporation, as applicable (either, a
"Charter"). Each of the Companies is organized and operates under a state
Charter (either Maryland, Massachusetts or Delaware). The chart below identifies
the applicable state Charter for each Company.
<Table>
<Caption>
NAME OF COMPANY JURISDICTION
- --------------- ------------
20/20....................................................... Delaware
Equity...................................................... Maryland
Index Series................................................ Delaware
Natural Resources........................................... Maryland
Sector Funds................................................ Maryland
Small Company............................................... Maryland
Tax Managed................................................. Delaware
Small Cap................................................... Maryland
Emerging Growth............................................. Maryland
Value....................................................... Massachusetts
PIP......................................................... Maryland
Real Estate................................................. Delaware
World....................................................... Maryland
</Table>
The Charter Amendments are intended to reflect changes to state laws that
have occurred over the years, to eliminate unnecessary or unduly burdensome
provisions that do not optimally protect the interests of shareholders, to
eliminate potential uncertainty regarding the application of certain state laws
and to achieve consistent Charter provisions for the Companies in each
jurisdiction and, where possible, across jurisdictions. The Board of each
Company believes that approval of the Charter Amendments is in the best
interests of the Company and its Shareholders, and recommends that shareholders
approve the Charter Amendments for their respective Companies.
There are certain material differences between the proposed Charter
Amendments for each Company and each Company's current Charter. These are
summarized in the tables appearing at the end of this Proposal. The text of the
proposed Charter Amendments is also included in the tables appearing at the end
of this Proposal.
Set forth below is a detailed analysis of the proposed Charter Amendments:
1. Charter Amendments. Each Charter would be amended to remove any
provisions that could be interpreted to require Shareholder approval for Charter
amendments other than for those amendments for which Shareholder vote is
specifically required by the 1940 Act or other law, if any, and to give the
Board of Directors or Trustees the right to amend the Charter without
Shareholder action to the fullest extent permitted by law.
THIS AMENDMENT IS INTENDED TO GIVE EACH COMPANY MAXIMUM FLEXIBILITY TO
PERMIT AMENDMENT OF ITS CHARTER BY THE BOARD TO ADDRESS ANY FUTURE
CIRCUMSTANCES WITHOUT THE NECESSITY OF THE TIME AND EXPENSE OF OBTAINING
A SHAREHOLDER VOTE UNLESS SUCH VOTE IS REQUIRED BY THE 1940 ACT OR OTHER
LAW.
In addition, each Maryland Company Charter would be amended to
specifically reserve the Company's right to alter the "contract rights"
of outstanding Shares, in order to clarify that the
18
<Page>
Company is exempt from certain Maryland appraisal rights statutes. UNDER
MARYLAND LAW, A SHAREHOLDER MAY BE ENTITLED TO REQUIRE A CORPORATION TO
PAY "FAIR VALUE" FOR HER SHARES IF A CHARTER AMENDMENT SUBSTANTIALLY
ADVERSELY AFFECTS HER RIGHTS AS A SHAREHOLDER. WE DO NOT BELIEVE ANY OF
THE MARYLAND COMPANIES ARE CURRENTLY SUBJECT TO SUCH STATUTES, BECAUSE
MARYLAND LAW GENERALLY DENIES APPRAISAL RIGHTS TO SHAREHOLDERS OF PUBLIC
COMPANIES AND OF OPEN-END INVESTMENT COMPANIES. HOWEVER, THE BOARD OF
DIRECTORS OF EACH MARYLAND COMPANY HAS DETERMINED THAT IT IS IN THE BEST
INTEREST OF THE MARYLAND COMPANY AND ITS SHAREHOLDERS TO REDUCE, TO THE
EXTENT POSSIBLE, ANY UNCERTAINTY REGARDING THE POTENTIAL APPLICATION OF
THE APPRAISAL STATUTES TO THE MARYLAND COMPANIES. Finally, each Maryland
Company Charter would be amended to clarify that the Board of Directors,
without Shareholder action, can increase or decrease the aggregate number
of Shares that the Company has authority to issue. ALTHOUGH WE BELIEVE
THAT THE MARYLAND COMPANIES HAVE THIS POWER UNDER MARYLAND LAW, THE BOARD
OF DIRECTORS OF EACH MARYLAND COMPANY BELIEVES IT IS IN THE BEST INTEREST
OF THE MARYLAND COMPANY TO ELIMINATE ANY POTENTIAL UNCERTAINTY REGARDING
THIS AUTHORITY.
2. Redemption Provisions. The Value Charter and the Charter for Index
Series would be amended, if necessary, to give the Board of Trustees the
authority to redeem Shares for any reason under terms set by the Board of
Trustees, including the failure by a Shareholder to provide required information
or maintain a minimum required investment. Any such required redemption would be
effected at the redemption price, and in accordance with the redemption
procedures for voluntary redemptions. The Maryland Company Charters already
provide for redemption rights; as permitted by state law, these Company Charters
would be amended to allow the redemption consideration to be set at net asset
value less any redemption fee or other charge as may be fixed by resolution of
the Board. The Delaware Company Charters other than Index Series already provide
for redemption of Shares by the Board of Trustees for any reason and will not
require amendment.
THIS AMENDMENT IS INTENDED TO ALLOW EACH FUND TO BE OPERATED MORE
EFFICIENTLY BY PERMITTING REDEMPTION AT THE DISCRETION OF THE BOARD OF
TRUSTEES, AND ALLOCATING REDEMPTION COSTS ONLY TO THE AFFECTED SHARES.
In addition, each Maryland Company Charter would be amended to clarify that a
redemption by such Company, even if it is of all of the outstanding Shares of a
fund or class, will not constitute a "liquidation" under Maryland law that would
require a Shareholder vote. ALTHOUGH WE BELIEVE THAT THE MARYLAND COMPANIES HAVE
AUTHORITY UNDER MARYLAND LAW TO REDEEM ALL SHARES IN A CLASS OR SERIES WITHOUT A
SHAREHOLDER VOTE, THE BOARD OF DIRECTORS OF EACH MARYLAND COMPANY BELIEVES IT IS
IN THE BEST INTEREST OF THE COMPANY TO ELIMINATE ANY POTENTIAL UNCERTAINTY
REGARDING THIS AUTHORITY.
3. Quorum; Action by Shareholders. Each Charter would be amended to
provide that a quorum would be one-third of the outstanding Shares of a Company
entitled to be cast at a meeting. In addition, the amendment would clearly
provide that one-third of all votes entitled to be cast on a specific matter
would be sufficient to constitute a quorum for that matter, even if only some of
the outstanding classes or Funds are entitled to vote on that matter. In
addition, the Value Company Charter would be amended to require a plurality vote
in the election of Trustees and would be amended to require that other matters
can be approved by a majority of votes cast at a meeting at which a quorum is
present, subject in all cases to any higher vote requirements under the 1940 Act
or applicable state law.
THIS AMENDMENT IS INTENDED TO INCREASE THE LIKELIHOOD THAT A QUORUM WILL
BE PRESENT AT ALL SHAREHOLDER MEETINGS TO AVOID THE TIME AND EXPENSE OF
CONTINUED SOLICITATION.
4. Number of Trustees. Each Delaware Company Charter and the Value Charter
would be amended to provide that the number of Trustees would be as determined
pursuant to a written instrument or the By-laws, which generally allow the
Trustees to establish the number, without setting any maximum. However, if a
maximum is required by applicable law, it would be set at 20 Trustees.
THIS AMENDMENT IS INTENDED TO GIVE EACH COMPANY MAXIMUM FLEXIBILITY WITH
RESPECT TO THE NUMBER OF TRUSTEES.
19
<Page>
5. Board Authority to Classify and Reclassify Shares. The Value Charter
would specifically authorize the Board of Trustees to classify and reclassify
its Shares, to increase the number of Shares available for issuance.
THIS AMENDMENT IS INTENDED TO GIVE THIS COMPANY MAXIMUM FLEXIBILITY WITH
RESPECT TO THE CLASSIFICATION AND ISSUANCE OF SHARES.
6. Adjournments. The Charter of each Massachusetts Company and the By-Laws
of each Delaware Company would be amended to clarify that a meeting of
Shareholders may be adjourned by Shareholders holding a majority of the
outstanding Shares present and entitled to vote on a proposal to adjourn whether
or not a quorum is present.
THIS AMENDMENT IS INTENDED TO CLARIFY THE PROCEDURE AND REQUISITE VOTE
FOR ADJOURNING SHAREHOLDER MEETINGS AND TO AVOID HAVING TO RE-NOTICE THE
MEETING WITH ITS ATTENDANT TIME AND EXPENSE TO THE COMPANY.
7. Derivative Actions. The Value Charter and Index Series Charter would be
amended to set forth the requirements for the bringing of a derivative action on
behalf of the Company by a Shareholder. Such requirements would include the
making of pre-suit demand upon the Trustees by Shareholders who collectively
hold at least 10% of the outstanding Shares and the consideration of any
Shareholders' pre-suit demand by Independent Trustees.
THIS AMENDMENT IS INTENDED TO ALLOW THE VALUE AND INDEX SERIES TO LIMIT
LITIGATION ON BEHALF OF THE COMPANY TO THOSE SITUATIONS WHERE IT IS
SUPPORTED BY SHAREHOLDERS WITH A MATERIAL STAKE IN THE COMPANY AND TO
ADDRESS THE NEED FOR THE EVALUATION OF THE MERITS OF A POTENTIAL LAWSUIT
BY INDEPENDENT TRUSTEES.
8. Master/Feeder Transactions; Reorganization. Each Maryland Company
Charter and the Value and the Index Series Charters would be amended to permit
the Directors or Trustees to invest the property of the Company or any fund
thereof in cash or securities of other investment companies. The Value Company
Charter would be amended to permit the Trustees to merge, consolidate or sell
substantially all of the assets of the Company or a Fund without a shareholder
vote.
THIS AMENDMENT IS INTENDED TO GIVE EACH COMPANY MAXIMUM FLEXIBILITY
REGARDING IMPLEMENTING A MASTER/FEEDER STRUCTURE, AND TO ALLOW THE BOARD
OF TRUSTEES TO REORGANIZE THE VALUE COMPANY.
9. Shareholder Voting. The Charters for the Value and Index Series would
be amended to permit dollar based voting by the Shareholders. The provision
would provide that with respect to each matter submitted to a Shareholder vote,
the Trustees could determine whether the Shareholder vote would be done on a per
Share basis or net asset value basis. Maryland Company Charters that consist of
funds would be amended to require dollar based voting by the Shareholders. The
general effect of the dollar-based voting is that it allocates Shareholder
voting power in proportion to the value of each Shareholder's investment, rather
than the number of Shares held. This will result in a fairer allocation of
voting power by increasing the voting power of investors holding Shares with
higher net asset values so as to match the level of their investment. In
addition, the Value Company and each Delaware Company Charter would be amended
to limit the requirement of a Shareholder vote to the election and removal of
Directors or Trustees and to additional matters as to which Shareholder approval
is required under the 1940 Act.
THIS AMENDMENT IS INTENDED TO GIVE THE VALUE AND INDEX SERIES MAXIMUM
FLEXIBILITY REGARDING THE APPLICABILITY OF SHAREHOLDER VOTING, TO MORE
FAIRLY ALLOCATE VOTING POWER FOR MARYLAND COMPANIES WITH FUNDS, AND TO
REDUCE THE NEED TO CALL SHAREHOLDERS' MEETINGS AND THE ATTENDANT EXPENSE
TO THE COMPANIES.
10. Termination of Company, Fund or Class. The Value and each Delaware
Company Charter would be amended to provide that the Trustees would have the
authority to dissolve the Company or any Fund or class without Shareholder
approval. The Value Fund Charter would also be amended to reduce
20
<Page>
the required Shareholder vote for a termination of this Company or any Fund when
that termination is recommended by the Trustees from a vote of two-thirds of the
Shares to a majority of the Shares.
THIS AMENDMENT IS INTENDED TO ALLOW THE TRUSTEES TO LIQUIDATE THE COMPANY
OR ANY SERIES AND TO DISTRIBUTE ANY NET ASSETS TO SHAREHOLDERS WITHOUT
FIRST OBTAINING A SHAREHOLDER VOTE.
11. Election of Trustees. The Value and each Delaware Company Charter
would be amended to provide that the calling of a Shareholders' meeting for the
election of Trustees when less than a majority of Trustees holding office had
been elected by the Shareholders would only be required to the extent that the
calling of such a meeting was required under the 1940 Act.
THIS AMENDMENT IS INTENDED TO REDUCE THE NEED TO CALL SHAREHOLDERS'
MEETINGS FOR THE ELECTION OF TRUSTEES AND THE ATTENDANT EXPENSE TO THE
COMPANIES.
12. Indemnification and Limited Liability. The Maryland Company Charters
would be amended to provide for uniform indemnification (including advancement
of expenses) of each Company's current and former Directors and officers to the
full extent required or permitted by law, and for other employees and agents to
the extent authorized by the Board of Directors or the Company's By-laws and as
permitted by law, and also to provide uniform limitation on the liability of
Directors and officers for monetary damages. The Charter for each of Natural
Resources and World would also be amended to provide that Directors and officers
will not be liable to the Company or its shareholders for monetary damages for
breach of fiduciary duty, to the extent permitted by law. Pursuant to Maryland
law, this provision specifically does NOT protect a Director or officer from
liability for (a) receipt of an improper benefit or profit or (b) active and
deliberate dishonesty.
THIS AMENDMENT IS INTENDED TO ENSURE THAT THE MARYLAND COMPANY CHARTERS
ARE CONSISTENT WITH EACH OTHER AND RELEVANT MARYLAND LAW. IN ADDITION, WE
BELIEVE THESE PROVISIONS WILL ENABLE THE MARYLAND COMPANIES TO ATTRACT
AND RETAIN THE MOST HIGHLY QUALIFIED PERSONNEL.
DELAWARE SUMMARY AND TEXT OF CHARTER AMENDMENTS
<Table>
<Caption>
DECLARATION OF TRUST AMENDMENTS QUORUM
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
20/20 A vote of shareholders The Trustees would The quorum requirement The quorum requirement
is required for have authority to is 40% of the shares would be one-third of
amendments that approve all amendments entitled to vote at a the shares entitled to
(i) affect the voting for routine and non- meeting, except when a vote at a meeting,
rights of routine matters other larger quorum is except when a larger
shareholders, than those matters required by applicable quorum is required by
(ii) amend the that are required to law, the Declaration the 1940 Act, the
amendment provision of be approved by or the By- Laws. Declaration or the
the Declaration, shareholders under the By-Laws.
(iii) are required to 1940 Act.
be approved by
shareholders under
applicable law, and
(iv) are submitted to
the shareholders by
the Trustees.
</Table>
21
<Page>
<Table>
<Caption>
REDEMPTION NUMBER OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
20/20 None. The number of Trustees The number of Trustees
shall at all times be would be such number
at least one and no as is determined by
more than 15, as the Trustees from time
determined by the to time but at least
Trustees from time to one.
time.
</Table>
<Table>
<Caption>
ADJOURNMENTS DERIVATIVE ACTIONS
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
20/20 The existing By-Laws Shareholders holding a None.
do not contain an majority of the
express provision outstanding shares
regarding the present and entitled
requirements for to vote on adjournment
adjournment of a of a meeting would
shareholders' meeting. have authority to
adjourn a shareholders
meeting whether or not
a quorum is present at
the meeting.
</Table>
<Table>
<Caption>
MASTER/FEEDER TRANSACTIONS SHAREHOLDER VOTING
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
20/20 None. Shareholders have the Shareholders would
power to vote for the have the power to vote
election and removal for the election and
of Trustees and such removal of Trustees
additional Company and such additional
matters as may be Company matters as may
required by applicable be required by the
law. 1940 Act.
</Table>
<Table>
<Caption>
TERMINATION OF COMPANY, FUND OR CLASS ELECTION OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
20/20 The Company and any The Company and any If less than the If less than the
Fund or Class of Fund or Class of majority of Trustees majority of Trustees
shares may be shares may be holding office have holding office have
dissolved at any time dissolved at any time been elected by been elected by
by vote of a majority by the Trustees shareholders, a shareholders, a
of the shares of each without shareholder shareholders' meeting shareholders' meeting
Fund entitled to vote, approval. for the election must for the election of
voting separately by be called for the Trustees would be
Fund, or by the election of Trustees. called to the extent
Trustees by written it is required by the
notice to the 1940 Act.
shareholders.
</Table>
22
<Page>
<Table>
<Caption>
DECLARATION OF TRUST AMENDMENTS QUORUM
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Index Series A vote of shareholders The Trustees would The quorum requirement The quorum requirement
is required for have authority to is 40% of the shares would be one-third of
amendments that approve all amendments entitled to vote at a the shares entitled to
(i) affect the voting for routine and non- meeting, except when a vote at a meeting
rights of routine matters other larger quorum is except when a larger
shareholders, than those matters required by applicable quorum is required by
(ii) amend the that are required to law, the Declaration the 1940 Act, the
amendment provision of be approved by or the By- Laws. Declaration or the
the Declaration, shareholders under the By-Laws.
(iii) are required to 1940 Act.
be approved by
shareholders under
applicable law, and
(iv) are submitted to
the shareholders by
the Trustees.
</Table>
<Table>
<Caption>
REDEMPTION NUMBER OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Index Series The Trustees have the The Trustees would The number of Trustees The number of Trustees
authority to redeem have the authority to shall at all times be would be such number
shares of any person redeem the shares of at least two and no as is determined by
at net asset value to any Shareholder or more than 15, as the Trustees from time
the extent that the group of Shareholders determined by the to time but at least
direct or indirect (including some or all Trustees from time to one.
ownership of shares of the shareholders of time.
has or may become any Fund or Class) for
concentrated in such any reason at net
person to an extent asset value, less any
that would disqualify redemption fees, and
any Fund of shares as upon such other terms
an investment company. set by the Trustees.
</Table>
<Table>
<Caption>
ADJOURNMENTS DERIVATIVE ACTIONS
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Index Series The existing By-Laws Shareholders holding a The existing Shareholders would be
do not contain an majority of the Declaration does not permitted to bring a
express provision outstanding shares contain an express derivative action on
regarding the present and entitled provision regarding behalf of the Company
requirements for to vote on adjournment derivative actions. if certain
adjournment of a of a meeting would requirements are
shareholders' meeting. have authority to satisfied, including
adjourn a shareholders the making of a
meeting whether or not pre-suit demand upon
a quorum is present at the Trustees by
the meeting. shareholders who
collectively hold at
least 10% of the
outstanding shares of
the Company and the
consideration of any
such pre-suit demand
by independent
Trustees.
</Table>
23
<Page>
<Table>
<Caption>
MASTER/FEEDER TRANSACTIONS SHAREHOLDER VOTING
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Index Series The existing The Trustees would be Shareholders have the Shareholders would
Declaration does not permitted to invest power to vote for the have the power to vote
contain an express the property of the election and removal for the election and
provision regarding Company or any Fund of Trustees and such removal of Trustees
the Trustees' thereof in other additional Company and such additional
authority with respect investment companies matters as may be Company matters as may
to master/feeder without shareholder required by applicable be required by the
transactions. approval unless such law. Shareholders are 1940 Act. Shareholders
approval is required entitled to vote on a would be entitled to
by the 1940 Act. per share basis as vote on a per share
determined by the basis or net asset
Trustees. value basis.
</Table>
<Table>
<Caption>
TERMINATION OF COMPANY, FUND OR CLASS ELECTION OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Index Series The Company and any The Company and any If less than the If less than the
Fund or Class of Fund or Class of majority of Trustees majority of Trustees
shares may be shares may be holding office have holding office have
dissolved at any time dissolved at any time been elected by been elected by
by vote of a majority by the Trustees shareholders, a shareholders, a
of the shares of each without shareholder shareholders' meeting shareholders' meeting
Fund entitled to vote, approval. for the election must for the election of
voting separately by be called for the Trustees would be
Fund, or by the election of Trustees. called to the extent
Trustees by written it is required by the
notice to the 1940 Act.
shareholders.
</Table>
<Table>
<Caption>
DECLARATION OF TRUST AMENDMENTS QUORUM
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Tax-Managed A vote of shareholders The Trustees would The quorum requirement The quorum requirement
is required for have authority to is 40% of the shares would be one-third of
amendments that approve all amendments entitled to vote at a the shares entitled to
(i) affect the voting for routine and non- meeting, except when a vote at a meeting,
rights of routine matters other larger quorum is except when a larger
shareholders, than those matters required by applicable quorum is required by
(ii) amend the that are required to law, the Declaration the 1940 Act, the
amendment provision of be approved by or the By- Laws. Declaration or the
the Declaration, shareholders under the By-Laws.
(iii) are required to 1940 Act.
be approved by
shareholders under
applicable law, and
(iv) are submitted to
the shareholders by
the Trustees.
</Table>
<Table>
<Caption>
REDEMPTION NUMBER OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Tax-Managed None. The number of Trustees The number of Trustees
shall at all times be would be such number
at least one and no as is determined by
more than 15, as the Trustees from time
determined by the to time but at least
Trustees from time to one.
time.
</Table>
24
<Page>
<Table>
<Caption>
ADJOURNMENTS DERIVATIVE ACTIONS
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Tax-Managed The existing By-Laws Shareholders holding a None.
do not contain an majority of the
express provision outstanding shares
regarding the present and entitled
requirements for to vote on adjournment
adjournment of a of a meeting would
shareholders' meeting. have authority to
adjourn a shareholders
meeting whether or not
a quorum is present at
the meeting.
</Table>
<Table>
<Caption>
MASTER/FEEDER TRANSACTIONS SHAREHOLDER VOTING
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Tax-Managed None. Shareholders have the Shareholders would
power to vote for the have the power to vote
election and removal for the election and
of Trustees and such removal of Trustees
additional Company and such additional
matters as may be Company matters as may
required by applicable be required by the
law. 1940 Act.
</Table>
<Table>
<Caption>
TERMINATION OF COMPANY, FUND OR CLASS ELECTION OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Tax-Managed The Company and any The Company and any If less than the If less than the
Fund or Class of Fund or Class of majority of Trustees majority of Trustees
shares may be shares may be holding office have holding office have
dissolved at any time dissolved at any time been elected by been elected by
by vote of a majority by the Trustees shareholders, a shareholders, a
of the shares of each without shareholder shareholders' meeting shareholders' meeting
Fund entitled to vote, approval. for the election must for the election of
voting separately by be called for the Trustees would be
Fund, or by the election of Trustees. called to the extent
Trustees by written it is required by the
notice to the 1940 Act.
shareholders.
</Table>
<Table>
<Caption>
DECLARATION OF TRUST AMENDMENTS QUORUM
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Real Estate A vote of shareholders The Trustees would The quorum requirement The quorum requirement
is required for have authority to is 40% of the shares would be one-third of
amendments that approve all amendments entitled to vote at a the shares entitled to
(i) affect the voting for routine and non- meeting, except when a vote at a meeting,
rights of routine matters other larger quorum is except when a larger
shareholders, than those matters required by applicable quorum is required by
(ii) amend the that are required to law, the Declaration the 1940 Act, the
amendment provision of be approved by or the By- Laws. Declaration or the
the Declaration, shareholders under the By-Laws.
(iii) are required to 1940 Act.
be approved by
shareholders under
applicable law, and
(iv) are submitted to
the shareholders by
the Trustees.
</Table>
25
<Page>
<Table>
<Caption>
REDEMPTION NUMBER OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Real Estate None. The number of Trustees The number of Trustees
shall at all times be would be such number
at least one and no as is determined by
more than 15, as the Trustees from time
determined by the to time but at least
Trustees from time to one.
time.
</Table>
<Table>
<Caption>
ADJOURNMENTS DERIVATIVE ACTIONS
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Real Estate The existing By-Laws Shareholders holding a None.
do not contain an majority of the
express provision outstanding shares
regarding the present and entitled
requirements for to vote on adjournment
adjournment of a of a meeting would
shareholders' meeting. have authority to
adjourn a shareholders
meeting whether or not
a quorum is present at
the meeting.
</Table>
<Table>
<Caption>
MASTER/FEEDER TRANSACTIONS SHAREHOLDER VOTING
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Real Estate None. Shareholders have the Shareholders would
power to vote for the have the power to vote
election and removal for the election and
of Trustees and such removal of Trustees
additional Company and such additional
matters as may be Company matters as may
required by applicable be required by the
law. 1940 Act.
</Table>
<Table>
<Caption>
TERMINATION OF COMPANY, FUND OR CLASS ELECTION OF TRUSTEES
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING PROVISION PROPOSED AMENDMENT EXISTING PROVISION PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Real Estate The Company and any The Company and any If less than the If less than the
Fund or Class of Fund or Class of majority of Trustees majority of Trustees
shares may be shares may be holding office have holding office have
dissolved at any time dissolved at any time been elected by been elected by
by vote of a majority by the Trustees shareholders, a shareholders, a
of the shares of each without shareholder shareholders' meeting shareholders' meeting
Fund entitled to vote, approval. for the election must for the election of
voting separately by be called for the Trustees would be
Fund, or by the election of Trustees. called to the extent
Trustees by written it is required by the
notice to the 1940 Act.
shareholders.
</Table>
Set out below is the text of the proposed Charter Amendments to all Delaware
Companies summarized in the preceding table:
- Amend Section 2 of Article I of the Declaration to add the following
definition:
"Prior Declaration of Trust" means the original declaration of trust of the
Trust as in effect from time to time up to the effectiveness of this Declaration
of Trust;
26
<Page>
- Amend Section 1 of Article IV of the Declaration to delete the first two
sentences thereof in their entirety and replace them with one sentence to
read as follows:
The number of Trustees shall be the number established under or pursuant
to the Prior Declaration of Trust or such number as is determined, from
time to time, by the Trustees pursuant to Section 3 of this Article IV
but shall at all times be at least one.
- Amend the fourth sentence of Section 1 of Article IV of the Declaration in
its entirety to read as follows:
In the event that less than the majority of Trustees holding office have
been elected by the Shareholders, to the extent required by the 1940
Act, but only to such extent, the Trustees then in office shall call a
Shareholders' meeting for the election of Trustees.
- Amend the first sentence of Section 1 of Article V of the Declaration in
its entirety to read as follows:
The Shareholders shall have power to vote only (i) for the election or
removal of Trustees as and to the extent provided in Article IV,
Section 1, and (ii) with respect to such additional matters relating to
the Trust as may be required by the 1940 Act, this Declaration of Trust,
the By-Laws or any registration of the Trust with the Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable.
- Amend the first and second sentences of Section 2 of Article V of the
Declaration in their entirety to read as follows:
Except when a larger quorum is required by federal law, including the 1940
Act, by the By-Laws or by this Declaration of Trust, one-third of the Shares
entitled to vote shall constitute a quorum at a Shareholders' meeting. When any
one or more Series (or Classes) is to vote as a single class separate from any
other Shares, one-third of the Shares of all such Series (or Classes) entitled
to vote shall constitute a quorum at a Shareholders' meeting of such Series (or
Classes).
- Amend Section 2 of Article VIII of the Declaration in its entirety to read
as follows:
Section 2. TERMINATION OF THE TRUST OR ANY SERIES OR CLASS.
(a) Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be dissolved at any time by the
Trustees by written notice to the Shareholders. Any Series of Shares may be
dissolved at any time by the Trustees by written notice to the Shareholders
of such Series. Any Class of any Series of Shares may be terminated at any
time by the Trustees by written notice to the Shareholders of such Class.
Any action to dissolve the Trust shall be deemed to also be an action to
dissolve each Series and each Class thereof.
(b) Upon the requisite action by the Trustees to dissolve the Trust or
any one or more Series of Shares, after paying or otherwise providing for
all charges, taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular Series as may be determined
by the Trustees, the Trust shall in accordance with such procedures as the
Trustees consider appropriate reduce the remaining assets of the Trust or of
the affected Series to distributable form in cash or Shares (if any Series
remain) or other securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the Trust or Series involved, ratably
according to the number of Shares of the Trust or such Series held by the
several Shareholders of such Series on the date of distribution. Thereupon,
any affected Series or Class shall terminate and the Trustees and the Trust
shall be discharged of any and all further liabilities and duties relating
thereto or arising therefrom, and the right, title and interest of all
parties with respect to such Series shall be canceled and discharged. Upon
the requisite action by the Trustees to terminate any Class of any Series of
Shares, the Trustees may, to the extent they deem it appropriate, follow the
procedures set forth in this Section 2(b) with respect to such Class that
are specified in connection with the dissolution and
27
<Page>
winding up of the Trust or any Series of Shares. Alternatively, in
connection with the termination of any Class of any Series of Shares, the
Trustees may treat such termination as a redemption of the Shareholders of
such Class effected pursuant to Section 2(c) of Article VI of this
Declaration of Trust provided that the costs relating to the termination of
such Class shall be included in the determination of the net asset value of
the Shares of such Class for purposes of determining the redemption price to
be paid to the Shareholders of such Class (to the extent not otherwise
included in such determination).
(c) Following completion of winding up of the Trust's business, the
Trustees shall cause a certificate of cancellation of the Trust's
Certificate of Trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee. Upon
termination of the Trust, the Trustees shall be discharged of any and all
further liabilities and duties relating thereto or arising therefrom, and
the right, title and interest of all parties with respect to the Trust shall
be canceled and discharged.
- Amend Section 4 of Article VIII of the Declaration in its entirety to read
as follows:
Section 4. AMENDMENTS. Except as specifically provided in this Section 4,
the Trustees may, without Shareholder vote, restate, amend or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to vote
(i) on any amendment that is required to be approved by Shareholders pursuant to
the 1940 Act and (ii) on any amendment submitted to the Shareholders by the
Trustees at their discretion. Any amendment required or permitted to be
submitted to the Shareholders that, as the Trustees determine, shall only affect
the Shareholders of one or more Series or one or more Classes shall be
authorized by a vote of only the Shareholders of each Series or Class affected
and no vote of Shareholders of a Series or Class not affected shall be required.
Notwithstanding anything else herein, no amendment hereof shall limit the rights
to insurance provided by Article VII, Section 4 of this Declaration of Trust
with respect to any acts or omissions of Persons covered thereby prior to such
amendment nor shall any such amendment limit the rights to indemnification
referenced in Article VII, Section 2 of this Declaration of Trust or as provided
in the By-Laws with respect to any actions or omissions of Persons covered
thereby prior to such amendment. The Trustees may, without Shareholder vote,
restate, amend, or otherwise supplement the Certificate of Trust as the Trustees
deem necessary or desirable.
- Amend Section 1 of Article III of the By-Laws to add a sentence at the end
thereof to read as follows:
Any meeting of Shareholders may be adjourned one or more times from time
to time to another time or place by Shareholders holding a majority of
the outstanding Shares present and entitled to vote on a proposal to
adjourn at such meeting, whether or not a quorum is present.
Set out below is the text of the additional proposed Charter Amendments with
respect to Index Series:
- Amend Section 1 of Article V of the Declaration to delete the second
sentence thereof in its entirety and replace it with two sentences to read
as follows:
As determined by the Trustees without the vote or consent of
Shareholders (except as required by the 1940 Act), on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall
be entitled to one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a proportionate
fractional vote or (ii) each dollar of Net Asset Value (number of Shares
owned times Net Asset Value per share of such Series or Class, as
applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be
entitled to a proportionate fractional vote. Without limiting the power
of the Trustees in any way to designate otherwise in accordance with the
preceding sentence, the Trustees hereby establish that each whole Share
shall be entitled to one vote as to any matter on which it is entitled
to vote and each fractional Share shall be entitled to a proportionate
fractional vote.
28
<Page>
- Amend Section 2(c) of Article VI of the Declaration in its entirety to
read as follows:
(c) The Trustees may require any Shareholder or group of Shareholders
(including some or all of the Shareholders of any Series or Class) to redeem
Shares for any reason under terms set by the Trustees, including (i) the
determination of the Trustees that direct or indirect ownership of Shares of
any Series has or may become concentrated in such Shareholder to an extent
that would disqualify any Series as a regulated investment company under the
Internal Revenue Code of 1986, as amended (or any successor statute
thereto), (ii) the failure of a Shareholder to supply a tax identification
number if required to do so, or to have the minimum investment required
(which may vary by Series), or (iii) the failure of a Shareholder to pay
when due for the purchase of Shares issued to him. Any such redemption shall
be effected at the redemption price and in the manner provided in this
Article VI.
- Amend Section 3(c) of Article VIII of the Declaration in its entirety to
read as follows:
(c) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by the 1940 Act,
invest all or a portion of the Trust Property of any Series, or dispose of
all or a portion of the Trust Property of any Series, and invest the
proceeds of such disposition in interests issued by one or more other
investment companies registered under the 1940 Act. Any such other
investment company may (but need not) be a trust (formed under the laws of
the State of Delaware or any other state or jurisdiction) (or subtrust
thereof) which is classified as a partnership for federal income tax
purposes. Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by the 1940 Act, cause
a Series that is organized in the master/feeder fund structure to withdraw
or redeem its Trust Property from the master fund and cause such Series to
invest its Trust Property directly in securities and other financial
instruments or in another master fund.
- Amend Article VIII of the Declaration to add a new Section 9 to read as
follows:
Section 9. DERIVATIVE ACTIONS. IN ADDITION TO THE REQUIREMENTS SET FORTH IN
SECTION 3816 OF THE DELAWARE ACT, A SHAREHOLDER MAY BRING A DERIVATIVE ACTION ON
BEHALF OF THE TRUST ONLY IF THE FOLLOWING CONDITIONS ARE MET:
(a) The Shareholder or Shareholders must make a pre-suit demand upon the
Trustees to bring the subject action unless an effort to cause the Trustees
to bring such an action is not likely to succeed. For purposes of this
Section 9(a), a demand on the Trustees shall only be deemed not likely to
succeed and therefore excused if a majority of the Board of Trustees, or a
majority of any committee established to consider the merits of such action,
is composed of Trustees who are not "independent trustees" (as that term is
defined in the Delaware Act).
(b) Unless a demand is not required under paragraph (a) of this
Section 9, Shareholders eligible to bring such derivative action under the
Delaware Act who collectively hold at least 10% of the outstanding Shares of
the Trust, or who collectively hold at least 10% of the outstanding Shares
of the Series or Class to which such action relates, shall join in the
request for the Trustees to commence such action; and
(c) Unless a demand is not required under paragraph (a) of this
Section 9, the Trustees must be afforded a reasonable amount of time to
consider such Shareholder request and to investigate the basis of such
claim. The Trustees shall be entitled to retain counsel or other advisors in
considering the merits of the request and shall require an undertaking by
the Shareholders making such request to reimburse the Trust for the expense
of any such advisors in the event that the Trustees determine not to bring
such action.
(d) For purposes of this Section 9, the Board of Trustees may designate
a committee of one Trustee to consider a Shareholder demand if necessary to
create a committee with a majority of Trustees who do not have a personal
financial interest in the transaction at issue. The Trustees shall be
entitled to retain counsel or other advisors in considering the merits of
the request and may require an
29
<Page>
undertaking by the Shareholders making such request to reimburse the Trust
for the expense of any such advisors in the event that the Trustees
determine not to bring such action.
MARYLAND SUMMARY AND TEXT OF CHARTER AMENDMENTS
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
Equity EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
Most Charter amendments The presence, in person or The Charter provides that,
require the approval of a by proxy, of a majority of to the extent permitted by
majority of the shares of all votes entitled to be law, a director or officer
common stock outstanding cast at the meeting. of the Company shall not
and entitled to vote. It be liable to the Company
appears that minor PROPOSED AMENDMENT: or its shareholders for
amendments may be approved THE PRESENCE, IN PERSON OR monetary damages for
without shareholder BY PROXY, OF ONE-THIRD OF breach of fiduciary duty.
action. ALL VOTES ENTITLED TO BE
CAST AT THE MEETING OR ON PROPOSED AMENDMENT:
PROPOSED AMENDMENT: A MATTER WOULD CONSTITUTE NO CHANGE PROPOSED.
THE CHARTER WOULD CLARIFY A QUORUM FOR SUCH MEETING
THAT THE COMPANY CAN OR MATTER. (SEE
EFFECT CERTAIN CHARTER (2) BELOW).
AMENDMENTS WITHOUT
SHAREHOLDER APPROVAL. THE
CHARTER WOULD ALSO INCLUDE
SPECIFIC LANGUAGE
RESERVING THE RIGHT OF THE
COMPANY TO CHANGE THE
"CONTRACT RIGHTS" OF
OUTSTANDING SHARES. IN
ADDITION, THE CHARTER
WOULD CLARIFY THAT THE
BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE. (SEE (1) BELOW).
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
Equity EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
The Company's By-Laws None. One vote for each share None.
provide that the Company held.
shall indemnify present PROPOSED AMENDMENT: PROPOSED AMENDMENT:
and former directors, THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers, employees and EXPLICIT AUTHORITY TO NO CHANGE PROPOSED. EXPLICIT AUTHORITY TO
agents against judgments, INVEST ASSETS IN CASH OR SUBTRACT REDEMPTION FEES
fines, settlements and IN INTERESTS ISSUED BY AND OTHER CHARGES, AS
expenses to the extent OTHER INVESTMENT DETERMINED BY THE BOARD OF
permitted by law, COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
including by advance of (6) BELOW). PAYABLE TO SHAREHOLDERS IN
expenses. The Charter does CONNECTION WITH A
not include any REDEMPTION BY SHAREHOLDERS
corresponding provisions. OR BY THE COMPANY. THE
CHARTER WOULD ALSO CLARIFY
PROPOSED AMENDMENT: THAT THE COMPANY CAN
THE CHARTER WOULD INCLUDE REDEEM ALL OUTSTANDING
A PROVISION (SEE SHARES IN A FUND OR CLASS
(5) BELOW) PROVIDING THAT WITHOUT A SHAREHOLDER
THE COMPANY SHALL VOTE. (SEE (7) BELOW).
INDEMNIFY (a) CURRENT AND
FORMER DIRECTORS AND
OFFICERS, TO THE EXTENT
PERMITTED BY LAW,
INCLUDING BY ADVANCE OF
EXPENSES AND (b) OTHER
EMPLOYEES AND AGENTS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW. AFTER
ADOPTION OF THIS
PROVISION, NO SUBSEQUENT
AMENDMENT OR REPEAL COULD
LIMIT THE INDEMNIFICATION
PROTECTION WITH RESPECT TO
ACTS OR OMISSIONS
OCCURRING PRIOR TO SUCH
AMENDMENT OR REPEAL.
</Table>
30
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
Natural EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
Resources The Charter reserves the The presence, in person or None.
Company's right to adopt by proxy, of a majority of
Charter amendments to the all votes entitled to be PROPOSED AMENDMENT:
extent permitted by law. cast at the meeting. THE CHARTER WOULD PROVIDE
For minor matters such as THAT, TO THE EXTENT
name changes, and changes PROPOSED AMENDMENT: PERMITTED BY LAW, A
in the par value of THE PRESENCE, IN PERSON OR DIRECTOR OR OFFICER OF THE
shares, the Company can BY PROXY, OF ONE-THIRD OF COMPANY WOULD NOT BE
amend the Charter without ALL VOTES ENTITLED TO BE LIABLE TO THE COMPANY OR
shareholder approval. CAST AT THE MEETING OR ON ITS SHAREHOLDERS FOR
A MATTER WOULD CONSTITUTE MONETARY DAMAGES FOR
PROPOSED AMENDMENT: A QUORUM FOR SUCH MEETING BREACH OF FIDUCIARY DUTY.
THE EXISTING CHARTER OR MATTER. (SEE NO SUBSEQUENT MODIFICATION
PROVISION WOULD BE REVISED (2) BELOW). OR REPEAL OF THIS
TO MATCH THE LANGUAGE IN PROVISION COULD REVOKE
THE OTHER MARYLAND COMPANY THIS PROTECTION FOR EVENTS
CHARTERS (SEE (1) BELOW) BETWEEN ADOPTION OF THE
AND TO SPECIFICALLY PROVISION AND SUCH
INDICATE THAT THE COMPANY MODIFICATION OR REPEAL.
RESERVES THE RIGHT TO (SEE (4) BELOW).
CHANGE THE "CONTRACT
RIGHTS" OF OUTSTANDING
SHARES. IN ADDITION, THE
CHARTER WOULD CLARIFY THAT
THE BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE.
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
Natural EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
Resources The Company's By-Laws None. One vote for each share None.
provide that the Company held.
shall indemnify present PROPOSED AMENDMENT: PROPOSED AMENDMENT:
and former directors, THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers, employees and EXPLICIT AUTHORITY TO NO CHANGE PROPOSED. EXPLICIT AUTHORITY TO
agents against judgments, INVEST ASSETS IN CASH OR SUBTRACT REDEMPTION FEES
fines, settlements and IN INTERESTS ISSUED BY AND OTHER CHARGES, AS
expenses to the extent OTHER INVESTMENT DETERMINED BY THE BOARD OF
permitted by law, COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
including by advance of (6) BELOW). PAYABLE TO SHAREHOLDERS IN
expenses. The Charter does CONNECTION WITH A
not include any REDEMPTION BY SHAREHOLDERS
corresponding provisions. OR BY THE COMPANY. THE
CHARTER WOULD ALSO CLARIFY
PROPOSED AMENDMENT: THAT THE COMPANY CAN
THE CHARTER WOULD INCLUDE REDEEM ALL OUTSTANDING
A PROVISION (SEE SHARES IN A FUND OR CLASS
(5) BELOW) PROVIDING THAT WITHOUT A SHAREHOLDER
THE COMPANY SHALL VOTE. (SEE (7) BELOW).
INDEMNIFY (a) CURRENT AND
FORMER DIRECTORS AND
OFFICERS, TO THE EXTENT
PERMITTED BY LAW,
INCLUDING BY ADVANCE OF
EXPENSES; AND (b) OTHER
EMPLOYEES AND AGENTS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW. AFTER
ADOPTION OF THIS
PROVISION, NO SUBSEQUENT
AMENDMENT OR REPEAL COULD
LIMIT THE INDEMNIFICATION
PROTECTION WITH RESPECT TO
ACTS OR OMISSIONS
OCCURRING PRIOR TO SUCH
AMENDMENT OR REPEAL.
</Table>
31
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
Sector Funds EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
Most Charter amendments The presence, in person or The Charter provides that,
require the approval of a by proxy, of a majority of to the extent permitted by
majority of the shares of all votes entitled to be law, a director or officer
common stock outstanding cast at the meeting. of the Company shall not
and entitled to vote. It be liable to the Company
appears that minor PROPOSED AMENDMENT: or its shareholders for
amendments may be approved THE PRESENCE, IN PERSON OR monetary damages for
without shareholder BY PROXY, OF ONE-THIRD OF breach of fiduciary duty.
action. ALL VOTES ENTITLED TO BE
CAST AT THE MEETING OR ON PROPOSED AMENDMENT:
PROPOSED AMENDMENT: A MATTER WOULD CONSTITUTE NO CHANGE PROPOSED.
THE CHARTER WOULD CLARIFY A QUORUM FOR SUCH MEETING
THAT THE COMPANY CAN OR MATTER. (SEE
EFFECT CERTAIN CHARTER (2) BELOW).
AMENDMENTS WITHOUT
SHAREHOLDER APPROVAL. THE
CHARTER WOULD ALSO INCLUDE
SPECIFIC LANGUAGE
RESERVING THE RIGHT OF THE
COMPANY TO CHANGE THE
"CONTRACT RIGHTS" OF
OUTSTANDING SHARES. IN
ADDITION, THE CHARTER
WOULD CLARIFY THAT THE
BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE. (SEE (1) BELOW).
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
Sector Funds EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
The Company's By-Laws None. One vote for each share None.
provide that the Company held.
shall indemnify present PROPOSED AMENDMENT: PROPOSED AMENDMENT:
and former directors, THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers, employees and EXPLICIT AUTHORITY TO ONE VOTE FOR EACH DOLLAR EXPLICIT AUTHORITY TO
agents against judgments, INVEST ASSETS IN CASH OR OF NET ASSET VALUE SUBTRACT REDEMPTION FEES
fines, settlements and IN INTERESTS ISSUED BY REPRESENTED BY SHARES AND OTHER CHARGES, AS
expenses to the extent OTHER INVESTMENT HELD. (SEE (3) BELOW). DETERMINED BY THE BOARD OF
permitted by law, COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
including by advance of (6) BELOW). PAYABLE TO SHAREHOLDERS IN
expenses. The Charter does CONNECTION WITH A
not include any REDEMPTION BY SHAREHOLDERS
corresponding provisions. OR BY THE COMPANY. THE
CHARTER WOULD ALSO CLARIFY
PROPOSED AMENDMENT: THAT THE COMPANY CAN
THE CHARTER WOULD INCLUDE REDEEM ALL OUTSTANDING
A PROVISION (SEE SHARES IN A FUND OR CLASS
(5) BELOW) PROVIDING THAT WITHOUT A SHAREHOLDER
THE COMPANY SHALL VOTE. (SEE (7) BELOW).
INDEMNIFY (a) CURRENT AND
FORMER DIRECTORS AND
OFFICERS, TO THE EXTENT
PERMITTED BY LAW,
INCLUDING BY ADVANCE OF
EXPENSES; AND (b) OTHER
EMPLOYEES AND AGENTS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW. AFTER
ADOPTION OF THIS
PROVISION, NO SUBSEQUENT
AMENDMENT OR REPEAL COULD
LIMIT THE INDEMNIFICATION
PROTECTION WITH RESPECT TO
ACTS OR OMISSIONS
OCCURRING PRIOR TO SUCH
AMENDMENT OR REPEAL.
</Table>
32
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
Small Company EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
Most Charter amendments The presence, in person or The Charter provides that,
require the approval of a by proxy, of a majority of to the extent permitted by
majority of the shares of all votes entitled to be law, a director or officer
common stock outstanding cast at the meeting. of the Company shall not
and entitled to vote. It be liable to the Company
appears that minor PROPOSED AMENDMENT: or its shareholders for
amendments may be approved THE PRESENCE, IN PERSON OR monetary damages for
without shareholder BY PROXY, OF ONE-THIRD OF breach of fiduciary duty.
action. ALL VOTES ENTITLED TO BE
CAST AT THE MEETING OR ON PROPOSED AMENDMENT:
PROPOSED AMENDMENT: A MATTER WOULD CONSTITUTE NO CHANGE PROPOSED.
THE CHARTER WOULD CLARIFY A QUORUM FOR SUCH MEETING
THAT THE COMPANY CAN OR MATTER. (SEE
EFFECT CERTAIN CHARTER (2) BELOW).
AMENDMENTS WITHOUT
SHAREHOLDER APPROVAL. THE
CHARTER WOULD ALSO INCLUDE
SPECIFIC LANGUAGE
RESERVING THE RIGHT OF THE
COMPANY TO CHANGE THE
"CONTRACT RIGHTS" OF
OUTSTANDING SHARES. IN
ADDITION, THE CHARTER
WOULD CLARIFY THAT THE
BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE. (SEE (1) BELOW).
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
Small Company EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
The Company's By-Laws None. One vote for each share None.
provide that the Company held.
shall indemnify present PROPOSED AMENDMENT: PROPOSED AMENDMENT:
and former directors, THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers, employees and EXPLICIT AUTHORITY TO NO CHANGE PROPOSED. EXPLICIT AUTHORITY TO
agents against judgments, INVEST ASSETS IN CASH OR SUBTRACT REDEMPTION FEES
fines, settlements and IN INTERESTS ISSUED BY AND OTHER CHARGES, AS
expenses to the extent OTHER INVESTMENT DETERMINED BY THE BOARD OF
permitted by law, COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
including by advance of (6) BELOW). PAYABLE TO SHAREHOLDERS IN
expenses. The Charter does CONNECTION WITH A
not include any REDEMPTION BY SHAREHOLDERS
corresponding provisions. OR BY THE COMPANY. THE
CHARTER WOULD ALSO CLARIFY
PROPOSED AMENDMENT: THAT THE COMPANY CAN
THE CHARTER WOULD INCLUDE REDEEM ALL OUTSTANDING
A PROVISION (SEE SHARES IN A FUND OR CLASS
(5) BELOW) PROVIDING THAT WITHOUT A SHAREHOLDER
THE COMPANY SHALL VOTE. (SEE (7) BELOW).
INDEMNIFY (a) CURRENT AND
FORMER DIRECTORS AND
OFFICERS, TO THE EXTENT
PERMITTED BY LAW,
INCLUDING BY ADVANCE OF
EXPENSES; AND (b) OTHER
EMPLOYEES AND AGENTS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW. AFTER
ADOPTION OF THIS
PROVISION, NO SUBSEQUENT
AMENDMENT OR REPEAL COULD
LIMIT THE INDEMNIFICATION
PROTECTION WITH RESPECT TO
ACTS OR OMISSIONS
OCCURRING PRIOR TO SUCH
AMENDMENT OR REPEAL.
</Table>
33
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
Small Cap EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
The Charter reserves the The presence, in person or The Charter provides that,
Company's right to adopt by proxy, of one- third of to the extent permitted by
Charter amendments to the all votes entitled to be law, no director or
extent permitted by law. cast at the meeting. officer of the Company
For minor matters such as shall be personally liable
name changes and changes PROPOSED AMENDMENT: to the Company or its
in the par value of THE EXISTING CHARTER shareholders for monetary
shares, the Company can PROVISION WOULD BE REVISED damages.
amend the Charter without TO MATCH THE LANGUAGE IN
shareholder approval. THE OTHER MARYLAND COMPANY PROPOSED AMENDMENT:
CHARTERS (SEE (2) BELOW) THE EXISTING CHARTER
PROPOSED AMENDMENT: AND TO CLARIFY THAT THE PROVISION WOULD BE REVISED
THE EXISTING CHARTER PRESENCE, IN PERSON OR BY TO MATCH THE LANGUAGE IN
PROVISION WOULD BE REVISED PROXY, OF ONE- THIRD OF THE OTHER MARYLAND COMPANY
TO MATCH THE LANGUAGE IN THE VOTES ENTITLED TO BE CHARTERS (SEE (4) BELOW).
THE OTHER MARYLAND COMPANY CAST ON A MATTER WOULD
CHARTERS (SEE (1) BELOW) CONSTITUTE A QUORUM FOR
AND TO SPECIFICALLY THAT MATTER, EVEN IF FEWER
INDICATE THAT THE COMPANY THAN ALL CLASSES OR FUNDS
RESERVES THE RIGHT TO ARE ENTITLED TO VOTE.
CHANGE THE "CONTRACT
RIGHTS" OF OUTSTANDING
SHARES. IN ADDITION, THE
CHARTER WOULD CLARIFY THAT
THE BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE.
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
Small Cap EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
The Charter provides that None. One vote for each share None.
the Company shall held.
indemnify present and PROPOSED AMENDMENT: PROPOSED AMENDMENT:
former directors and THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers to the extent EXPLICIT AUTHORITY TO NO CHANGE PROPOSED. EXPLICIT AUTHORITY TO
permitted by law, INVEST ASSETS IN CASH OR SUBTRACT REDEMPTION FEES
including by advance of IN INTERESTS ISSUED BY AND OTHER CHARGES, AS
expenses, and the OTHER INVESTMENT DETERMINED BY THE BOARD OF
Company's By-Laws provide COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
that the Company shall (6) BELOW). PAYABLE TO SHAREHOLDERS IN
indemnify present and CONNECTION WITH A
former directors, REDEMPTION BY SHAREHOLDERS
officers, employees and OR BY THE COMPANY. THE
agents against judgments, CHARTER WOULD ALSO CLARIFY
fines, settlements and THAT THE COMPANY CAN
expenses to the extent REDEEM ALL OUTSTANDING
permitted by law, SHARES IN A FUND OR CLASS
including by advance of WITHOUT A SHAREHOLDER
expenses. VOTE. (SEE (7) BELOW).
PROPOSED AMENDMENT:
THE EXISTING CHARTER
PROVISION WOULD BE REVISED
TO MATCH THE LANGUAGE IN
THE OTHER MARYLAND COMPANY
CHARTERS (SEE (5) BELOW)
AND TO INCLUDE AUTHORITY
FOR THE COMPANY TO
INDEMNIFY EMPLOYEES AND
AGENTS OTHER THAN
DIRECTORS AND OFFICERS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW.
INDEMNIFICATION OF PERSONS
OTHER THAN OFFICERS AND
DIRECTORS CURRENTLY
APPEARS ONLY IN THE
COMPANY'S BY-LAWS.
</Table>
34
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
Emerging EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
Growth The Charter reserves the The presence, in person or The Charter provides that,
Company's right to adopt by proxy, of one- third of to the extent permitted by
Charter amendments to the all votes entitled to be law, no director or
extent permitted by law. cast at the meeting. officer of the Company
For minor matters such as shall be personally liable
name changes and changes PROPOSED AMENDMENT: to the Company or its
in the par value of THE EXISTING CHARTER shareholders for monetary
shares, the Company can PROVISION WOULD BE REVISED damages.
amend the Charter without TO MATCH THE LANGUAGE IN
shareholder approval. THE OTHER MARYLAND COMPANY PROPOSED AMENDMENT:
CHARTERS (SEE (2) BELOW) THE EXISTING CHARTER
PROPOSED AMENDMENT: AND TO CLARIFY THAT THE PROVISION WOULD BE REVISED
THE EXISTING CHARTER PRESENCE, IN PERSON OR BY TO MATCH THE LANGUAGE IN
PROVISION WOULD BE REVISED PROXY, OF ONE- THIRD OF THE OTHER MARYLAND COMPANY
TO MATCH THE LANGUAGE IN THE VOTES ENTITLED TO BE CHARTERS (SEE (4) BELOW).
THE OTHER MARYLAND COMPANY CAST ON A MATTER WOULD
CHARTERS (SEE (1) BELOW) CONSTITUTE A QUORUM FOR
AND TO SPECIFICALLY THAT MATTER, EVEN IF FEWER
INDICATE THAT THE COMPANY THAN ALL CLASSES OR FUNDS
RESERVES THE RIGHT TO ARE ENTITLED TO VOTE.
CHANGE THE "CONTRACT
RIGHTS" OF OUTSTANDING
SHARES. IN ADDITION, THE
CHARTER WOULD CLARIFY THAT
THE BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE.
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
Emerging EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
Growth The Charter provides that None. One vote for each share None.
the Company shall held.
indemnify present and PROPOSED AMENDMENT: PROPOSED AMENDMENT:
former directors and THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers to the extent EXPLICIT AUTHORITY TO NO CHANGE PROPOSED. EXPLICIT AUTHORITY TO
permitted by law, INVEST ASSETS IN CASH OR SUBTRACT REDEMPTION FEES
including by advance of IN INTERESTS ISSUED BY AND OTHER CHARGES, AS
expenses, and the OTHER INVESTMENT DETERMINED BY THE BOARD OF
Company's By-Laws provide COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
that the Company shall (6) BELOW). PAYABLE TO SHAREHOLDERS IN
indemnify present and CONNECTION WITH A
former directors, REDEMPTION BY SHAREHOLDERS
officers, employees and OR BY THE COMPANY. THE
agents against judgments, CHARTER WOULD ALSO CLARIFY
fines, settlements and THAT THE COMPANY CAN
expenses to the extent REDEEM ALL OUTSTANDING
permitted by law, SHARES IN A FUND OR CLASS
including by advance of WITHOUT A SHAREHOLDER
expenses. VOTE. (SEE (7) BELOW).
PROPOSED AMENDMENT:
THE EXISTING CHARTER
PROVISION WOULD BE REVISED
TO MATCH THE LANGUAGE IN
THE OTHER MARYLAND COMPANY
CHARTERS (SEE (5) BELOW)
AND TO INCLUDE AUTHORITY
FOR THE COMPANY TO
INDEMNIFY EMPLOYEES AND
AGENTS OTHER THAN
DIRECTORS AND OFFICERS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW.
INDEMNIFICATION OF PERSONS
OTHER THAN OFFICERS AND
DIRECTORS CURRENTLY
APPEARS ONLY IN THE
COMPANY'S BY-LAWS.
</Table>
35
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
PIP EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
The Charter reserves the The presence, in person or The Charter provides that,
Company's right to adopt by proxy, of a majority of to the extent permitted by
Charter amendments to the all votes entitled to be law, no director or
extent permitted by law. cast at the meeting. officer of the Company
For minor matters such as shall be personally liable
name changes and changes PROPOSED AMENDMENT: to the Company or its
in the par value of THE PRESENCE, IN PERSON OR shareholders for monetary
shares, the Company can BY PROXY, OF ONE-THIRD OF damages.
amend the Charter without ALL VOTES ENTITLED TO BE
shareholder approval. CAST AT THE MEETING OR ON PROPOSED AMENDMENT:
A MATTER WOULD CONSTITUTE THE EXISTING CHARTER
PROPOSED AMENDMENT: A QUORUM FOR SUCH MEETING PROVISION WOULD BE REVISED
THE EXISTING CHARTER OR MATTER. (SEE TO MATCH THE LANGUAGE IN
PROVISION WOULD BE REVISED (2) BELOW). THE OTHER MARYLAND COMPANY
TO MATCH THE LANGUAGE IN CHARTERS (SEE (4) BELOW).
THE OTHER MARYLAND COMPANY
CHARTERS (SEE (1) BELOW)
AND TO SPECIFICALLY
INDICATE THAT THE COMPANY
RESERVES THE RIGHT TO
CHANGE THE "CONTRACT
RIGHTS" OF OUTSTANDING
SHARES. IN ADDITION, THE
CHARTER WOULD CLARIFY THAT
THE BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE.
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
PIP EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
The Charter provides that None. One vote for each share None.
the Company shall held.
indemnify present and PROPOSED AMENDMENT: PROPOSED AMENDMENT:
former directors and THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
officers to the extent EXPLICIT AUTHORITY TO ONE VOTE FOR EACH DOLLAR EXPLICIT AUTHORITY TO
permitted by law, INVEST ASSETS IN CASH OR OF NET ASSET VALUE SUBTRACT REDEMPTION FEES
including by advance of IN INTERESTS ISSUED BY REPRESENTED BY SHARES AND OTHER CHARGES, AS
expenses, and the OTHER INVESTMENT HELD. (SEE (3) BELOW). DETERMINED BY THE BOARD OF
Company's By-Laws provide COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
that the Company shall (6) BELOW). PAYABLE TO SHAREHOLDERS IN
indemnify present and CONNECTION WITH A
former directors, REDEMPTION BY SHAREHOLDERS
officers, employees and OR BY THE COMPANY. THE
agents against judgments, CHARTER WOULD ALSO CLARIFY
fines, settlements and THAT THE COMPANY CAN
expenses to the extent REDEEM ALL OUTSTANDING
permitted by law, SHARES IN A FUND OR CLASS
including by advance of WITHOUT A SHAREHOLDER
expenses. VOTE. (SEE (7) BELOW).
PROPOSED AMENDMENT:
THE EXISTING CHARTER
PROVISION WOULD BE REVISED
TO MATCH THE LANGUAGE IN
THE OTHER MARYLAND COMPANY
CHARTERS (SEE (5) BELOW)
AND TO INCLUDE AUTHORITY
FOR THE COMPANY TO
INDEMNIFY EMPLOYEES AND
AGENTS OTHER THAN
DIRECTORS AND OFFICERS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW.
INDEMNIFICATION OF PERSONS
OTHER THAN OFFICERS AND
DIRECTORS CURRENTLY
APPEARS ONLY IN THE
COMPANY'S BY-LAWS.
</Table>
36
<Page>
<Table>
<Caption>
COMPANY CHARTER QUORUM LIMITATION ON
AMENDMENTS LIABILITY
World EXISTING REQUIREMENT: EXISTING REQUIREMENT: EXISTING PROVISION:
The Charter reserves the The presence, in person or None.
Company's right to adopt by proxy, of a majority of
Charter amendments to the all votes entitled to be PROPOSED AMENDMENT:
extent permitted by law. cast at the meeting. THE CHARTER WOULD PROVIDE
For minor matters such as THAT, TO THE EXTENT
name changes and changes PROPOSED AMENDMENT: PERMITTED BY LAW, A
in the par value of THE PRESENCE, IN PERSON OR DIRECTOR OR OFFICER OF THE
shares, the Company can BY PROXY, OF ONE-THIRD OF COMPANY WOULD NOT BE
amend the Charter without ALL VOTES ENTITLED TO BE LIABLE TO THE COMPANY OR
shareholder approval. CAST AT THE MEETING OR ON ITS SHAREHOLDERS FOR
A MATTER WOULD CONSTITUTE MONETARY DAMAGES FOR
PROPOSED AMENDMENT: A QUORUM FOR SUCH MEETING BREACH OF FIDUCIARY DUTY.
THE EXISTING CHARTER OR MATTER. (SEE NO SUBSEQUENT MODIFICATION
PROVISION WOULD BE REVISED (2) BELOW). OR REPEAL OF THIS
TO MATCH THE LANGUAGE IN PROVISION COULD REVOKE
THE OTHER MARYLAND COMPANY THIS PROTECTION FOR EVENTS
CHARTERS (SEE (1) BELOW) BETWEEN ADOPTION OF THE
AND TO SPECIFICALLY PROVISION AND SUCH
INDICATE THAT THE COMPANY MODIFICATION OR REPEAL.
RESERVES THE RIGHT TO (SEE (4) BELOW).
CHANGE THE "CONTRACT
RIGHTS" OF OUTSTANDING
SHARES. IN ADDITION, THE
CHARTER WOULD CLARIFY THAT
THE BOARD OF DIRECTORS,
WITHOUT SHAREHOLDER
ACTION, CAN INCREASE OR
DECREASE THE AGGREGATE
NUMBER OF SHARES THAT THE
COMPANY HAS AUTHORITY TO
ISSUE.
<Caption>
COMPANY INDEMNIFICATION MASTER/FEEDER SHAREHOLDER VOTING REDEMPTION
TRANSACTIONS FEES
AND VOTE
World EXISTING PROVISION: EXISTING PROVISION: EXISTING REQUIREMENT: EXISTING PROVISION:
The Company's By-Laws None. One vote for each share None.
provide that the Company held.
shall indemnify directors, PROPOSED AMENDMENT: PROPOSED AMENDMENT:
officers, employees and THE COMPANY WOULD HAVE PROPOSED AMENDMENT: THE COMPANY WOULD HAVE
agents against judgments, EXPLICIT AUTHORITY TO ONE VOTE FOR EACH DOLLAR EXPLICIT AUTHORITY TO
fines, settlements and INVEST ASSETS IN CASH OR OF NET ASSET VALUE SUBTRACT REDEMPTION FEES
expenses to the extent IN INTERESTS ISSUED BY REPRESENTED BY SHARES AND OTHER CHARGES, AS
permitted by law. The OTHER INVESTMENT HELD. (SEE (3) BELOW). DETERMINED BY THE BOARD OF
Charter does not include COMPANIES. (SEE DIRECTORS, FROM THE AMOUNT
any corresponding (6) BELOW). PAYABLE TO SHAREHOLDERS IN
provisions. CONNECTION WITH A
REDEMPTION BY SHAREHOLDERS
PROPOSED AMENDMENT: OR BY THE COMPANY. THE
THE CHARTER WOULD INCLUDE CHARTER WOULD ALSO CLARIFY
A PROVISION (SEE THAT THE COMPANY CAN
(5) BELOW) PROVIDING THAT REDEEM ALL OUTSTANDING
THE COMPANY SHALL SHARES IN A FUND OR CLASS
INDEMNIFY (a) CURRENT AND WITHOUT A SHAREHOLDER
FORMER DIRECTORS AND VOTE. (SEE (7) BELOW).
OFFICERS, TO THE EXTENT
PERMITTED BY LAW,
INCLUDING BY ADVANCE OF
EXPENSES AND (b) OTHER
EMPLOYEES AND AGENTS TO
THE EXTENT APPROVED BY THE
BOARD OF DIRECTORS AND
PERMITTED BY LAW. AFTER
ADOPTION OF THIS
PROVISION, NO SUBSEQUENT
AMENDMENT OR REPEAL COULD
LIMIT THE INDEMNIFICATION
PROTECTION WITH RESPECT TO
ACTS OR OMISSIONS
OCCURRING PRIOR TO SUCH
AMENDMENT OR REPEAL.
</Table>
The text of the proposed Charter Amendments summarized in the preceding
table is set forth below:
(1) The Corporation reserves the right from time to time to make any
amendments to the charter of the Corporation which may now or hereafter be
authorized by law, including any amendment altering the terms or contract
rights, as expressly set forth in the charter of the Corporation, of any
shares of its outstanding stock by classification, reclassification, or
otherwise. In clarification and not limitation of the foregoing, a majority
of the entire Board of Directors, without action by the stockholders, may
amend the charter of the Corporation to increase or decrease the aggregate
number of shares of stock or the number of shares of stock of any class or
series that the Corporation has authority to issue. (All Maryland Companies)
(2) At a meeting of stockholders the presence in person or by proxy of
stockholders entitled to cast one-third of all the votes entitled to be cast
at the meeting constitutes a quorum. At a meeting of
37
<Page>
stockholders the presence in person or by proxy of stockholders entitled to
cast one-third of all the votes entitled to be cast on any matter shall
constitute a quorum for action on that matter (including matters on which
fewer than all classes or series are entitled to vote). (All Maryland
Companies)
(3) Unless otherwise expressly provided in the charter of the
Corporation, on each matter submitted to a vote of the stockholders, each
holder of shares shall be entitled to one vote for each dollar of net asset
value represented by each share standing in his name on the books of the
Corporation, irrespective of the series or class thereof, and the exclusive
voting power for all purposes shall be vested in the holders of Common
Stock. (Sector Funds, PIP, and World)
(4) A director or officer of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except to the extent such exemption from
liability or limitation thereof is not permitted by law (including the
Investment Company Act of 1940) as currently in effect or as the same may
hereafter be amended. No amendment, modification or repeal of this
Article shall adversely affect any right or protection of a director or
officer that exists at the time of such amendment, modification or repeal.
(Natural Resources, Small Cap, Emerging Growth, PIP, and World)
(5) The Corporation shall indemnify (A) its current and former directors
and officers, whether serving or having served the Corporation or at its
request any other entity, to the full extent required or permitted by the
General Laws of the State of Maryland now or hereafter in force (as limited
by the Investment Company Act of 1940), including the advance of expenses
under the procedures and to the full extent permitted by law, and (B) other
employees and agents to such extent as shall be authorized by the Board of
Directors or the Corporation's By-Laws and be permitted by law. The
foregoing rights of indemnification shall not be exclusive of any other
rights to which those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt, approve and
amend from time to time such by-laws, resolutions or contracts implementing
such provisions or such further indemnification arrangements as may be
permitted by law. No amendment of the charter of the Corporation or repeal
of any of its provisions shall limit or eliminate the right to
indemnification provided hereunder with respect to acts or omissions
occurring prior to such amendment or repeal. (All Maryland Companies)
(6) The Board of Directors is explicitly authorized to, without action
by stockholders (unless such approval is required by the Investment Company
Act of 1940), invest all or a portion of the assets of any series or class,
or dispose of all or a portion of the assets of any series or class and
invest the proceeds of such disposition, in cash or in interests issued by
one or more other investment companies registered under the Investment
Company Act of 1940. The Board of Directors is explicitly authorized to,
without action by stockholders, cause a series or class that is organized in
the master/feeder fund structure to withdraw or redeem its assets from the
master fund and cause such series or class to invest its assets directly in
cash or in securities and other financial instruments or in another master
fund. (All Maryland Companies)
(7) The appropriate sections of all Maryland Company Charters shall be
modified as necessary to reflect the following provisions:
All redemptions, whether by a stockholder or by the Corporation,
shall be at a redemption price equal to the current net asset value per
share as determined by the Board of Directors from time to time in
accordance with the provisions of the charter and applicable law, less
such redemption fee or other charge, if any, as may be fixed by
resolution of the Board of Directors. A redemption by the Corporation in
accordance with the charter of the Corporation, even if it is for all the
shares of a series or class, shall not be considered a liquidation
requiring a vote of stockholders.
38
<Page>
MASSACHUSETTS SUMMARY AND TEXT OF CHARTER AMENDMENTS
<Table>
<Caption>
SHAREHOLDERS MEETINGS IF LESS THAN A
MAJORITY OF TRUSTEES ELECTED BY
NUMBER OF TRUSTEES SHAREHOLDERS
-------------------------------------- --------------------------------------
PROPOSED NAME EXISTING PROPOSED EXISTING PROPOSED
COMPANY CHANGE REQUIREMENT AMENDMENT REQUIREMENT AMENDMENT
- ------- ------------------ ------------------ ------------------ ------------------ ------------------
Value Number fixed by Number would be No applicable In the event less
Trustees, not less fixed by Trustees, provision. than a majority of
than 3 or more no upper or lower Trustees have been
than 15. limit on number. elected by the
Shareholders, to
the extent
required by the
1940 Act, but only
to such extent,
the Trustees then
in office would be
required to call a
Shareholders'
meeting for the
election of
Trustees.
</Table>
<Table>
<Caption>
DOLLAR VOTING SHARE CLASSIFICATION OR
-------------------------------- RECLASSIFICATION QUORUM, ADJOURNMENT, PLURALITY
EFFECT OF -------------------------------- --------------------------------
EXISTING PROPOSED EXISTING PROPOSED EXISTING PROPOSED
COMPANY REQUIREMENT AMENDMENT REQUIREMENT AMENDMENT REQUIREMENT AMENDMENT
- ------- --------------- --------------- --------------- --------------- --------------- ---------------
Value No applicable Trustees, Trustees may, Trustees would By-Laws provide Holders of one-
provision. without the in their have power, in that holders of third of the
vote of the discretion, their a majority of Shares entitled
Shareholders, divide the discretion, to outstanding to vote on a
would determine Shares of any classify or shares of the matter would be
on any vote put Fund into reclassify any Company or Fund a quorum.
to the classes. unissued Shares of the Company Shares that
Shareholders of a Fund or present in abstain or for
whether voting class, or any person or by which the
will be per Shares of any proxy and broker or
Share voting or Fund or class entitled to nominee cannot
dollar voting previously vote vote on all
(net asset issued and constitutes a matters would
value times thereafter quorum. count for the
number of reacquired by purpose of
shares owned). the Trust, into determining a
one or more quorum.
Funds or
classes that
may be
established and
designated from
time to time.
</Table>
39
<Page>
<Table>
<Caption>
SHAREHOLDER DERIVATIVE ACTIONS MANDATORY REDEMPTION
---------------------------------------------- ----------------------------------------------
COMPANY EXISTING REQUIREMENT PROPOSED AMENDMENT EXISTING REQUIREMENT PROPOSED AMENDMENT
- ------- ---------------------- ---------------------- ---------------------- ----------------------
Value No applicable In order to bring a Only for excessively Any time (a) if the
provision. derivative action, large or small Trustees determine in
unless all the accounts. their sole discretion
Trustees have a that redemption is in
financial interest in the best interests of
the suit, Shareholders the Shareholders or
must (a) make a the holders of the
pre-suit demand on the Shares of a Fund, or
Trustees who do not (b) for account
have a financial maintenance purposes.
interest in the suit,
(b) obtain holders of
at least 10% of
outstanding Shares to
join such request and
(c) afford the
Trustees a reasonable
amount of time to
respond.
</Table>
<Table>
<Caption>
PROCEDURE FOR TERMINATION OF PROCEDURE FOR CHARTER
COMPANY AMENDMENTS REORGANIZATION
-------------------------------- -------------------------------- --------------------------------
EXISTING PROPOSED EXISTING PROPOSED EXISTING PROPOSED
COMPANY REQUIREMENT AMENDMENT REQUIREMENT AMENDMENT REQUIREMENT AMENDMENT
- ------- --------------- --------------- --------------- --------------- --------------- ---------------
Value Company can be Company or any All charter Trustees, Vote of 2/3 of Reorganization
terminated by Fund can be amendments, without outstanding would require
(a) vote of terminated by other than Shareholder Shares of either
holders of 2/3 (a) vote of clean-up action, would Company (a) vote of
of Shares of holders of 2/3 matters such as be authorized required, or 2/3 of Shares
each Fund at a of Shares of name changes, to amend majority of of Company (or
meeting, each Fund or require the charter so long outstanding Fund being
(b) majority of 2/3 vote of approval of a as such shares of the reorganized)
Trustees, plus Fund being majority of the amendment does Company if (b) majority of
vote of holders terminated, Shares not adversely recommended by outstanding
of 2/3 of (b) if outstanding and affect the Trustees. shares of the
Shares of each recommended by entitled to rights of any Company (or
Fund without a the Trustees, vote. Shareholder. Fund being
meeting, or the vote of reorganized) if
(3) Trustees by holders of a recommended by
written notice majority of Trustees or
to the Shares of each (c) vote of a
Shareholders. Fund or majority of the
Funds can be majority vote Trustees.
terminated by of Fund being Shareholders
vote of 2/3 of terminated, or would not have
Shares in such (3) Trustees by appraisal
Fund. written notice rights in a
to the reorganization.
Shareholders. Trustees would
have the power,
without a vote
of the
Shareholders,
to invest the
property of the
Trust or any
Fund in one or
more other
investment
companies.
</Table>
40
<Page>
- Section 2.1 of the Declaration shall be amended to read as follows:
The number of Trustees shall be such number as shall be fixed from time
to time by a written instrument signed by a majority of the Trustees.
- Section 2.4 of the Declaration shall be amended to add the following
sentence at the end of the Section:
In the event that less than the majority of Trustees holding office have
been elected by the Shareholders, to the extent required by the 1940 Act,
but only to such extent, the Trustees then in office shall call a
Shareholders' meeting for the election of Trustees.
- Section 6.8 of the Declaration shall be amended to add the following
sentences at the end of the Section:
As determined by the Trustees without the vote or consent of Shareholders
(except as required by the 1940 Act), on any matter submitted to a vote
of Shareholders, either (i) each whole Share shall be entitled to one
vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote or (ii) each
dollar of net asset value (number of Shares owned times net asset value
per share of such series or class, as applicable) shall be entitled to
one vote on any matter on which such Shares are entitled to vote and each
fractional dollar amount shall be entitled to a proportionate fractional
vote. Unless the Trustees designate otherwise in accordance with the
preceding sentence, each whole Share shall be entitled to one vote as to
any matter on which it is entitled to vote and each fractional Share
shall be entitled to a proportionate fractional vote.
- The first sentence of the second paragraph of Section 6.9 of the
Declaration shall be amended to read as follows:
The Trustees, in their discretion, without a vote of Shareholders, may
classify or reclassify any unissued Shares of a series or class, or any
Shares of any series or class previously issued and thereafter reacquired
by the Trust, into Shares of one or more other series or classes that may
be established and designated from time to time.
- A new Section 6.10 of the Declaration shall be added, reading as follows:
QUORUM AND REQUIRED VOTE. One-third of the Shares entitled to vote on a
matter shall be a quorum for the transaction of business with respect to
such matter at a Shareholders' meeting. Shares that abstain or do not
vote with respect to one or more proposals presented for Shareholder
approval at any Shareholders' meeting and Shares held in "street name" as
to which the broker or nominee with respect thereto indicates on the
proxy that it does not have discretionary authority to vote with respect
to a particular proposal, will be counted for purposes of determining
whether a quorum is present at a meeting, but will not be counted as
Shares voted with respect to any such proposal. A majority of the shares
present at a meeting (regardless of whether they are authorized to vote
on all the matters to be presented to the meeting) shall be sufficient to
approve adjournments. Any adjourned session or sessions may be held
within a reasonable time after the date set for the original meeting
without the necessity of further notice. A Majority Shareholder Vote at a
meeting of which a quorum is present shall decide any question, except
(1) a plurality vote in the case of the election of Trustees, or
(2) when a different vote is required or permitted by any provision of
the 1940 Act or other applicable law or by this Declaration or the
By-Laws, or when the Trustees shall in their discretion require a larger
vote or the vote of a majority or larger fraction of the Shares of one or
more particular series or classes.
41
<Page>
- A new Section 6.11 of the Declaration shall be added, reading as follows:
A Shareholder may bring a derivative action on behalf of the Trust only
if the following conditions are met:
(a) The Shareholder or Shareholders must make a pre-suit demand upon the
Trustees to bring the subject action unless an effort to cause the
Trustees to bring such an action is not likely to succeed. For purposes
of this Section 6.11(a), a demand on the Trustees shall only be deemed
not likely to succeed and therefore excused if a majority of the Board of
Trustees, or a majority of any committee established to consider the
merits of such action, is composed of Trustees who have a personal
financial interest in the transaction at issue;
(b) Unless a demand is not required under paragraph (a) of this Section
6.11, Shareholders eligible to bring such derivative action who
collectively hold at least 10% of the outstanding Shares of the Trust, or
who collectively hold at least 10% of the outstanding Shares of the
Series or Class to which such action relates, shall join in the request
for the Trustees to commence such action; and
(c) Unless a demand is not required under paragraph (a) of this Section
6.11, the Trustees must be afforded a reasonable amount of time to
consider such Shareholder request and to investigate the basis of such
claim. The Trustees shall be entitled to retain counsel or other advisors
in considering the merits of the request and shall require an undertaking
by the Shareholders making such request to reimburse the Trust for the
expense of any such advisors in the event that the Trustees determine not
to bring such action.
(d) For purposes of this Section 6.11, the Board of Trustees may
designate a committee of one Trustee to consider a Shareholder demand if
necessary to create a committee with a majority of Trustees who do not
have a personal financial interest in the transaction at issue.
- Section 7.3 of the Declaration shall be amended in its entirety to read as
follows:
REDEMPTION AT THE OPTION OF THE TRUST. Each Share of any series shall be
subject to redemption at the option of the Trust: (i) at any time, if the
Trustees determine in their sole discretion that such redemption is in
the best interests of the holders of the Shares of the Trust or of any
series, or (ii) upon such other conditions with respect to maintenance of
Shareholder accounts of a minimum amount as may from time to time be
determined by the Trustees. Upon such redemption the holders of the
Shares so redeemed shall have no further right with respect thereto other
than to receive payment of the redemption price for such shares.
- The first sentence of Section 9.2(a) of the Declaration shall be amended
in its entirety to read as follows:
The Trust or any series may be terminated by (1) the affirmative vote of
the holders of not less than two-thirds of the Shares of each series of
the Trust in case of a termination of the Trust or the affirmative vote
of the holders of not less than two-thirds of the series being terminated
in the case of a termination of a series, (2) if the termination is
recommended by a majority of the Trustees, a Majority Shareholder Vote or
a Majority Shareholder Vote of the series being terminated in the case of
a termination of a series, or (3) by the Trustees by written notice to
the Shareholders of the Trust or the series being terminated.
- Sections 9.3(a) and (b) of the Declaration shall be amended in their
entirety to read as follows:
(a) The provisions of this Declaration (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with
respect to which such amendment is or purports to be applicable and so
long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a majority
of the Trustees (or by an officer of the Trust pursuant
42
<Page>
to the vote of a majority of the Trustees). Any amendment to this
Declaration that adversely affects the rights of all Shareholders may be
adopted at any time by an instrument in writing signed by a majority of
the Trustees (or by an officer of the Trust pursuant to a vote of a
majority of the Trustees) when authorized to do so by the vote in
accordance with SECTION 6.8 hereof of Shareholders holding a majority of
all the Shares outstanding and entitled to vote, without regard to
series, or if said amendment adversely affects the rights of the
Shareholders of less than all of the series, or of less than all of the
classes of any series having classes, by the vote of the holders of a
majority of all the Shares entitled to vote of each series or class, as
the case may be, so affected.
(b) Nothing contained in this Declaration shall permit the amendment of
this Declaration to impair the exemption from personal liability of the
Shareholders, Trustees, officers, employees and agents of the Trust or a
series or to permit assessments upon Shareholders.
- Section 9.4 of the Declaration shall be amended in its entirety to read as
follows:
The Trustees may sell, convey and transfer all or substantially all of
the assets of the Trust, or the assets of any one or more series of the
Trust, to another trust, partnership, association or corporation
organized under the laws of any state of the United States, or may
transfer the assets of one series of the Trust to another series of the
Trust, in exchange for cash, shares of the transferee or other
securities, or to the extent permitted by law then in effect may merge or
consolidate the Trust or any series with any other trust or any
corporation, partnership, or association organized under the laws of any
state of the United States, all upon such terms and conditions and for
such consideration when and as authorized by (a) the affirmative vote of
not less than two-thirds of the outstanding Shares of each series of the
Trust in the case of the reorganization of the Trust, or by the
affirmative vote of not less than two-thirds of the outstanding Shares of
a particular series in the case of the reorganization of a particular
series, provided, however, that if such merger, consolidation or sale is
recommended by the Trustees, a Majority Shareholder Vote, or a vote of
the majority of the outstanding Shares in such series, shall be
sufficient, or (b) a vote or written consent of a majority of the
Trustees. Shareholders shall not have appraisal rights in connection with
any such transaction. Following such transfer, the Trustees shall
distribute the cash, shares or other securities or other consideration
received in such transaction (giving due effect to the assets belonging
to and indebtedness of, and any other differences among, the various
series whose assets have so been transferred) among the Shareholders of
such series; and if all of the assets of the Trust have been so
transferred, the Trust shall be terminated. Notwithstanding anything else
herein, the Trustees may, without Shareholder approval unless such
approval is required by the 1940 Act, invest all or a portion of the
Trust Property of any series, or dispose of all or a portion of the Trust
Property of any series, and invest the proceeds of such disposition in
interests issued by one or more other investment companies registered
under the 1940 Act. Any such other investment company may (but need not)
be a trust (formed under the laws of the Commonwealth of Massachusetts or
any other state or jurisdiction) (or subtrust thereof) which is
classified as a partnership for federal income tax purposes.
Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by the 1940 Act,
cause a series that is organized in the master/ feeder fund structure to
withdraw or redeem its Trust Property from the master fund and cause such
series to invest its Trust Property directly in securities and other
financial instruments or in another master fund.
REQUIRED VOTE
Approval of this proposal as to each Delaware Company requires an
affirmative vote of a majority of each Company's voted shares. Approval of this
Proposal for Value requires the affirmative vote of two-thirds of the Fund's
outstanding shares. Approval of this proposal as to each Maryland Company
requires an affirmative vote of a majority of each such Company's outstanding
voting securities entitled to vote thereon and in the case of PIP, Sector Funds
and World, of the outstanding voting securities of each Fund.
EACH BOARD, INCLUDING THE INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL NO. 2.
43
<Page>
ADDITIONAL INFORMATION
The solicitation of proxies, the cost of which will be borne by the Funds,
will be made primarily by mail but also may include telephone or oral
communications by regular employees of Prudential Securities or PI, who will not
receive any compensation therefore 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. All of the cost of the Meetings will be borne by the Funds.
<Table>
<Caption>
ESTIMATED SOLICITATION
FUND FEES AND EXPENSES
- ---- ----------------------
20/20.................................................. $ 194,000
Equity................................................. $ 591,400
INDEX SERIES Stock Index............................... $ 393,300
Natural Resources...................................... $ 32,000
SECTOR FUNDS Financial Services........................ $ 60,000
SECTOR FUNDS Health Sciences........................... $ 109,200
SECTOR FUNDS Technology................................ $ 138,600
SECTOR FUNDS Utility................................... $ 517,000
Small Company.......................................... $ 185,450
TAX MANAGED Tax Equity................................. $ 41,200
Small Cap.............................................. $ 29,200
Emerging Growth........................................ $ 243,900
Value.................................................. $ 267,600
PIP Active Balanced.................................... $ 186,900
PIP Equity Opportunity................................. $ 271,000
PIP Growth............................................. $1,369,100
Real Estate............................................ $ 15,500
WORLD Global Growth.................................... $ 188,800
WORLD International Value.............................. $ 174,900
WORLD International Growth............................. $ 55,300
</Table>
SHAREHOLDER PROPOSALS
The Companies 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 Company not to hold annual meetings of
shareholders unless such shareholder action is required.
Any shareholder who wishes to submit a proposal to be considered at a
Company'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 or be brought before such
meeting without being included in the proxy statement.
Shareholder proposals that are submitted in a timely manner will not
necessarily be included in the Company's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
44
<Page>
OTHER BUSINESS
Management knows of no business to be presented at the Meetings other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote according to their
best judgment in the interest of each Fund, respectively.
<Table>
/s/ Maria G. Master /s/ Jonathan D. Shain
Maria G. Master Jonathan D. Shain
SECRETARY SECRETARY
PRUDENTIAL 20/20 FOCUS FUND PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL EQUITY FUND, INC. PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL INDEX SERIES FUND Prudential Global Growth Fund
Prudential Stock Index Fund Prudential International Value Fund
PRUDENTIAL NATURAL RESOURCES FUND, INC. Prudential Jennison International Growth Fund
PRUDENTIAL SECTOR FUNDS, INC.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
Prudential Tax-Managed Equity Fund
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
Prudential Active Balanced Fund
Prudential Jennison Equity Opportunity Fund
Prudential Jennison Growth Fund
</Table>
[ ], 2003
It is important that you execute and return ALL of your proxies promptly.
45
<Page>
INDEX TO EXHIBITS TO PROXY STATEMENT
<Table>
Exhibit A Five Percent Shareholder Report
Exhibit B Board and Committee Information
Exhibit C Officer Information
</Table>
46
<Page>
EXHIBIT A
FIVE PERCENT SHAREHOLDER REPORT
As of May 16, 2003, the beneficial owners, directly or indirectly, of more
than 5% of any class of the outstanding shares of the Funds are listed below.
<Table>
<Caption>
FUND NAME REGISTRATION SHARES/CLASS PERCENT
- --------- --------------------------------------- ------------ --------
20/20.....................................
Equity....................................
INDEX SERIES Stock Index..................
Natural Resources.........................
SECTOR FUNDS Financial Services...........
SECTOR FUNDS Health Sciences..............
SECTOR FUNDS Technology...................
SECTOR FUNDS Utility......................
Small Company.............................
TAX MANAGED Tax Equity....................
Small Cap.................................
Emerging Growth...........................
Value.....................................
PIP Active Balanced.......................
PIP Equity Opportunity....................
PIP Growth................................
Real Estate...............................
WORLD Global Growth.......................
WORLD International Value.................
WORLD International Growth................
</Table>
A-1
<Page>
EXHIBIT B
BOARD AND COMMITTEE INFORMATION(1)
<Table>
<Caption>
INDEX NATURAL SECTOR SMALL TAX SMALL EMERGING
ANNUAL FEE(2) 20/20 EQUITY SERIES RESOURCES FUNDS COMPANY MANAGED CAP GROWTH
- ------------- -------- -------- -------- --------- --------- --------- --------- -------- ---------
Fee for Attendance at Board
Meetings(2).............. N/A N/A N/A N/A N/A N/A N/A N/A N/A
Fee for Attendance at
Committee Meetings(2).... N/A N/A N/A N/A N/A N/A N/A N/A N/A
Number of Board Meetings
during the Last Fiscal
Year..................... 4 4 4 4 4 4 4 4 4
Number of Audit Committee
Meetings during the Last
Fiscal Year*............. 4 4 4 4 4 4 4 4 4
Number of Nominating
Committee Meetings during
the Last Fiscal Year*.... -- -- -- -- -- -- -- -- --
Size of Current Board...... 13 13 13 13 13 13 13 13 13
<Caption>
REAL
ANNUAL FEE(2) VALUE PIP ESTATE WORLD
- ------------- -------- -------- -------- --------
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..................... 4 4 4 4
Number of Audit Committee
Meetings during the Last
Fiscal Year*............. 4 4 4 4
Number of Nominating
Committee Meetings during
the Last Fiscal Year*.... -- -- -- --
Size of Current Board...... 13 13 9 9
</Table>
* Only the Independent Directors/Trustees serve on a Company's Audit and
Nominating Committees.
(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 certain Committee membership. See
page 13-15 of this proxy statement. No incumbent Director/Trustee attended
fewer than 75% of the total number of Board and Committee meetings during
the last fiscal year of each Company.
B-1
<Page>
EXHIBIT C(i)
OFFICER INFORMATION
<Table>
<Caption>
NAME, AGE, PRINCIPAL OFFICER SINCE
BUSINESS OCCUPATION FOR THE -----------------------------------------
PAST FIVE YEARS OFFICE 20F* EQF* PISF* NRF* PSF* SCF* TXM*
- --------------------------- ------------- ----- ----- ----- ----- ----- ----- -----
Judy A. Rice (55) President 2000 2000 2000 2000 2000 2000 2000
President, Chief Executive
Officer, Chief Operating Officer
and Officer-In-Charge (since 2003)
of PI; formerly various positions
to Senior Vice President
(1992-1999) of PSI; and various
positions to Managing Director
(1975-1992) of Salomon Smith
Barney; Member of Board of
Governors of the Money Management
Institute.
Robert F. Gunia (56) Vice 1997 1987 1992 1987 1987 1987 1998
Executive Vice President and Chief President
Administrative Officer (since June
1999) of PI; Executive Vice
President and Treasurer (since
January 1996) of PI; President
(since April 1999) of PIMS;
Corporate Vice President (since
September 1997) of The Prudential
Insurance Company of America
(Prudential); formerly Senior Vice
President (March 1987-May 1999) of
Prudential Securities Incorporated
(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. (PMF); Vice
President and Director (since May
1989) and Treasurer (since 1999)
of The Asia Pacific Fund, Inc.
Grace C. Torres (43) Treasurer & 1997 1998 1997 1997 1998 1998 1998
Senior Vice President (since Principal
January 2000) of PI; formerly Financial and
First Vice President (December Accounting
1996-January 2000) of PI and First Officer
Vice President (March 1993-1999)
of PSI.
Maria G. Master (32) Secretary 2002 2002 2002 2002 2002 2002 2002
Vice President and Corporate
Counsel (since August 2001) of
Prudential; formerly
Financial/Economic Analyst with
the Federal Reserve Bank of New
York (April 1999-July 2001),
Associate Attorney of Swidler
Berlin Shereff Friedman LLP (March
1997-April 1999) and Associate
Attorney of Riker, Danzig,
Scherer, Hyland & Perretti LLP
(August 1995-March 1997).
Jonathan D. Shain (44) Secretary N/A N/A N/A N/A N/A N/A N/A
Vice President and Corporate
Counsel (since August 1998) of
Prudential; formerly Attorney with
Fleet Bank, N.A. (January
1997-July 1998) and Associate
Counsel (August 1994-January 1997)
of New York Life Insurance
Company.
Marguerite E.H. Morrison (47) Assistant 2002 2002 2002 2002 2002 2002 2002
Vice President and Chief Legal Secretary
Officer-Mutual Funds and Unit
Investment Trusts (since August
2000) of Prudential; Senior Vice
President and Assistant Secretary
(since February 2001) of PI; Vice
President and Assistant Secretary
of PIMS (since October 2001),
previously Vice President and
Associate General Counsel
(December 1996-February 2001) of
PI and Vice President and
Associate General Counsel
(September 1987-September 1996) of
PSI.
Maryanne Ryan (38) Anti-Money 2002 2002 2002 2002 2002 2002 2002
Vice President, Prudential (since Laundering
November 1998), First Vice Compliance
President of PSI (March 1997-May Officer
1998).
</Table>
- ----------------------------------
* 20F=20/20; EQF=Equity; PSIF=Index Series; NRF=Natural Resources; PSF=Sector
Funds; SCF=Small Company; TXM=Tax Managed
C-1
<Page>
EXHIBIT C(ii)
<Table>
<Caption>
NAME, AGE, PRINCIPAL OFFICER SINCE
BUSINESS OCCUPATION FOR THE ------------------------------------
PAST FIVE YEARS OFFICE SCQ** EMF** PVF** PIP** RESF** WLD**
- --------------------------- ------------- ----- ----- ----- ----- ------ -----
Judy A. Rice (55) President 2000 2000 2000 2000 2000 2000
President, Chief Executive
Officer, Chief Operating Officer
and Officer-In-Charge (since 2003)
of PI; formerly various positions
to Senior Vice President
(1992-1999) of PSI; and various
positions to Managing Director
(1975-1992) of Salomon Smith
Barney; Member of Board of
Governors of the Money Management
Institute.
Robert F. Gunia (56) Vice 1998 1996 1987 1995 1997 1996
Executive Vice President and Chief President
Administrative Officer (since June
1999) of PI; Executive Vice
President and Treasurer (since
January 1996) of PI; President
(since April 1999) of PIMS;
Corporate Vice President (since
September 1997) of The Prudential
Insurance Company of America
(Prudential); formerly Senior Vice
President (March 1987-May 1999) of
Prudential Securities Incorporated
(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. (PMF); Vice
President and Director (since May
1989) and Treasurer (since 1999)
of The Asia Pacific Fund, Inc.
Grace C. Torres (43) Treasurer & 1997 1996 1997 1998 1997 1995
Senior Vice President (since Principal
January 2000) of PI; formerly Financial and
First Vice President (December Accounting
1996-January 2000) of PI and First Officer
Vice President (March 1993-1999)
of Prudential Securities.
Maria G. Master (32) Secretary 2002 2002 2002 2002 N/A N/A
Vice President and Corporate
Counsel (since August 2001) of
Prudential; formerly
Financial/Economic Analyst with
the Federal Reserve Bank of New
York (April 1999-July 2001),
Associate Attorney of Swidler
Berlin Shereff Friedman LLP (March
1997-April 1999) and Associate
Attorney of Riker, Danzig,
Scherer, Hyland & Perretti LLP
(August 1995-March 1997).
Jonathan D. Shain (44) Secretary N/A N/A N/A N/A 2001 2001
Vice President and Corporate
Counsel (since August 1998) of
Prudential; formerly Attorney with
Fleet Bank, N.A. (January
1997-July 1998) and Associate
Counsel (August 1994-January 1997)
of New York Life Insurance
Company.
Marguerite E.H. Morrison (46) Assistant 2002 2002 2002 2002 2002 2002
Vice President and Chief Legal Secretary
Officer-Mutual Funds and Unit
Investment Trusts (since August
2000) of Prudential; Senior Vice
President and Assistant Secretary
(since February 2001) of PI; Vice
President and Assistant Secretary
of PIMS (since October 2001),
previously Vice President and
Associate General Counsel
(December 1996-February 2001) of
PI and Vice President and
Associate General Counsel
(September 1987-September 1996) of
PSI.
Maryanne Ryan (38) Anti-Money 2002 2002 2002 2002 2002 2002
Vice President, Prudential (since Laundering
November 1998), First Vice Compliance
President of PSI (March 1997-May Officer
1998).
</Table>
- ----------------------------------
** SCQ=Small Cap; EMF=Emerging Growth; PVF=Value; RESF=Real Estate; WLD=World
C-2
<Page>
- --------------------------------------------------------------------------------
PRUDENTIAL [ ] FUND
GATEWAY CENTER THREE
NEWARK, NJ 07102
PROXY
JOINT SPECIAL MEETINGS OF SHAREHOLDERS
JULY 17, 2003, 9:30 A.M.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS (OR TRUSTEES). The
undersigned hereby appoints Grace C. Torres, Marguerite E.H. Morrison and Maria
G. Master as Proxies, each with full power of substitution, and hereby
authorizes each of them to represent and to vote, as designated on the reverse
side, all the shares of Common Stock of the Fund held of record by the
undersigned on May 16, 2003 at the Meeting to be held on July 17, 2003 or any
adjournment thereof.
THE SHARES REPRESENTED BY THE 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 PROPOSAL 2, IF YOU DO NOT SPECIFY
OTHERWISE, PLEASE REFER TO THE PROXY STATEMENT DATED MAY 15 FOR DISCUSSION OF
THE PROPOSAL.
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.
<Page>
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NJ 07102-4077
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow
the simple instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the proxy card and follow
the simple instructions.
TO VOTE BY MAIL
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
_______________ Fund
THE BOARD OF DIRECTORS (OR TRUSTEES) RECOMMENDS A VOTE FOR ALL OF THE NOMINEES
AND THE PROPOSAL.
VOTE ON DIRECTORS (OR TRUSTEES).
1) To elect ten Directors (or Trustees).
Nominees: 01) David E. A. Carson, 02)
Robert E. La Blanc, 03) Douglas H.
McCorkindale, 04) Stephen P. Munn, 05)
Richard A. Redeker, 06) Robin B. Smith,
07) Stephen Stoneburn, 08) Clay T.
Whitehead, 09) Judy A. Rice, 10) Robert
F. Gunia
FOR WITHHOLD FOR ALL TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE
ALL ALL EXCEPT NOMINEES, MARK "FOR ALL EXCEPT" AND WRITE THE
NUMBER(S) OF SUCH NOMINEE(S) ON THE LINE BELOW.
/ / / / / /
______________________________________________
FOR AGAINST ABSTAIN
VOTE ON PROPOSAL
2) To Approve Amendments to Each Fund's / / / / / /
Articles of Incorporation or Declaration
of Trust.
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.
_________________________________ __________
SIGNATURE (PLEASE SIGN WITHIN BOX) DATE
_________________________________ __________
SIGNATURE (JOINT OWNERS) DATE