<Page>
As filed with the Securities and Exchange Commission
on June 17, 2004
Registration No.
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
/X/ Pre-Effective Amendment No. 4 / / Post-Effective Amendment No. __
MONEYMART ASSETS, INC.
(Exact Name of Registrant as Specified in Charter)
Area Code and Telephone Number: (973) 802-6469
Gateway Center Three
100 Mulberry Street, 4th Floor
Newark, New Jersey 07102-4077
--------------------------
(Address of Principal Executive Offices)
(Zip Code)
Jonathan D. Shain
Gateway Center Three
100 Mulberry Street, 4th Floor
Newark, New Jersey 07102-4077
(Name and Address of Agent for Service)
Approximate date of public offering: As soon as practicable following
effectiveness of the Registration Statement.
Titles of Securities Being Registered: Class A, Class B, Class C and Class Z
Common Stock, $.01 par value per share.
Registrant has registered an indefinite amount of securities pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended; accordingly, no fee
is payable herewith in reliance upon Section 24(f).
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<Page>
SPECIAL MONEY MARKET FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
IMPORTANT PROXY MATERIALS
PLEASE VOTE NOW
June 23, 2004
Dear Shareholder
I am writing to ask you to vote on an important proposal whereby the assets
of Special Money Market Fund, Inc. (Special Money Fund) would be acquired by
MoneyMart Assets, Inc. (MoneyMart). A shareholder meeting for Special Money Fund
is scheduled for August 17, 2004 (the Meeting). Only shareholders of Special
Money Fund will vote on the acquisition of Special Money Fund's assets by
MoneyMart.
This package contains information about the proposal and includes materials
you will need to vote. The Board of Directors of Special Money Fund has reviewed
the proposal and recommended that it be presented to shareholders of Special
Money Fund for their consideration. Although the Directors have determined that
the proposal is in the best interests of shareholders, the final decision is up
to you.
If approved, the proposed transaction would give you the opportunity to
participate in a fund with similar investment policies that is expected to have
lower operating expenses.
To help you understand the proposal, we are including a "Q and A" section
that answers common questions about the proposed transaction. The accompanying
proxy statement and prospectus includes a detailed description of the proposal.
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 would be 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 and mail it in
the enclosed postage paid envelope. Votes must be received prior to
August 17, 2004.
- 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 instructions found on the web site. Votes must be
entered prior to 4 p.m. on August 16, 2004.
- 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 in your behalf
in a brokerage account, call 1-800-454-8183 toll-free. Enter your
12-digit control number from your proxy card. Follow the simple
instructions. Votes must be entered prior to 4 p.m. on August 16, 2004.
SPECIAL NOTE FOR SYSTEMATIC INVESTMENT PLANS AND THOSE WITH OUTSTANDING
CERTIFICATES (E.G., AUTOMATIC INVESTMENT PLAN, SYSTEMATIC EXCHANGE, ETC.).
Shareholders on systematic investment plans must contact their financial advisor
or call our customer service division, toll-free, at (800) 225-1852 to change
their options. Otherwise, starting on the day following the closing of the
proposed transaction (which is expected to occur shortly after the shareholder
meeting), future purchases shall be made in shares of MoneyMart if the proposed
transaction is approved.
<Page>
Shareholders with outstanding certificates are also urged to return their
certificates via Certified or Registered Mail to the address below:
Prudential Mutual Fund Services LLC
Attn: Account Services
2101 Welsh Road
Dresher, PA 19025
If you have any questions before you vote, please call us at
1-(888)999-0282. We are glad to help you understand the proposal 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 PROPOSAL
Please read the enclosed proxy statement and prospectus for a complete
description of the proposal. As a quick reference, the following provides a
brief overview of the proposal.
Q&A: QUESTIONS AND ANSWER
WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
Shareholders of Special Money Market Fund, Inc. (Special Money Fund) are
being asked to approve a transaction between Special Money Fund and MoneyMart
Assets, Inc. (MoneyMart). When we refer to the "transaction," we mean the
transfer of all of the assets of Special Money Fund to, and the assumption of
all of its liabilities by, MoneyMart, in exchange for shares of MoneyMart,
and the subsequent cancellation of shares of Special Money Fund. If the
transaction is approved, it is expected that Special Money Fund will
de-register with the Securities and Exchange Commission.
WHAT IS THE REASON FOR THIS TRANSACTION?
Historically, the majority of assets invested in MoneyMart were "sweep"
cash assets maintained in customer brokerage accounts offered by Prudential
Securities Incorporated (PSI). In 2003, PSI was effectively acquired by
Wachovia Securities LLC (Wachovia), and PSI became a division of Wachovia.
Wachovia decided that it would no longer offer MoneyMart as an investment
option for sweep cash assets maintained in former PSI customer brokerage
accounts, and instead "sweep" assets would be deposited into bank accounts
offered through Wachovia.
Accordingly, since November 10, 2003, all new cash assets that are
deposited into Wachovia brokerage accounts have been and will continue to be
deposited into the bank accounts. Since November 10, 2003, cash assets
maintained in the Wachovia brokerage accounts and invested in MoneyMart have
been, and will continue to be, transferred and deposited in the bank accounts
in a gradual process over the next several months, as Wachovia brokerage
customers redeem MoneyMart shares. It is expected that by September 2004,
virtually all of the sweep cash assets will have been redeemed. Because the
majority of the assets invested in MoneyMart are sweep assets, the decision
by Wachovia to discontinue offering MoneyMart as an investment option is
expected to significantly reduce the size of MoneyMart, which would result in
a significant increase in the operating expense ratio of MoneyMart, as fixed
costs would be spread across fewer assets. As a result of the Wachovia
redemptions and the reduction in assets invested in the money market funds
that it manages, Prudential Investments LLC (PI), the investment adviser of
both Special Money Fund and MoneyMart, has determined that it would no longer
be viable to offer all of the money market mutual funds currently part of the
JennisonDryden or Strategic Partners mutual fund family. Accordingly, PI
recommended to the Board of Directors of both Special Money Fund and
MoneyMart that Special Money Fund be reorganized into MoneyMart, the larger
of the two funds.
Because Special Money Fund has not been offered as an investment option for
sweep cash assets, Wachovia's decision to discontinue offering MoneyMart as an
investment option for sweep cash assets is not expected to materially impact the
asset levels, expenses, or operations of Special Money Fund. However, the
transaction, if approved, is expected to benefit Special Money Fund
shareholders, because the operating expense ratio of MoneyMart following
consummation of the transaction is expected to be lower than the current
operating expense ratio of Special Money Fund.
DO SPECIAL MONEY FUND AND MONEYMART HAVE SIMILAR INVESTMENT POLICIES?
Yes. The investment objectives and policies of Special Money Fund and
MoneyMart (each, a Fund, and together, the Funds) are similar. Both Special
Money Fund and MoneyMart are money market funds. Money market funds hold
high-quality short-term debt obligations.
The investment objectives of Special Money Fund and MoneyMart are
substantially similar. The investment objective of Special Money Fund is high
current income consistent with the preservation of principal and liquidity.
The investment objective of MoneyMart is maximum current income consistent
with stability of capital and the maintenance of liquidity. To achieve its
objective, Special Money Fund invests principally in commercial paper,
asset-backed securities, funding agreements, bank notes, bills, notes, puts
and obligations issued by foreign banks, foreign
<Page>
companies or foreign governments. To achieve its objective, MoneyMart invests
in short-term money market instruments such as obligations issued by the U.S.
government, its agencies and instrumentalities, commercial paper,
asset-backed securities, funding agreements, variable rate demand notes,
bills, notes and other obligations issued by banks, corporations and other
companies (including trust structures), and obligations issued by foreign
banks, companies or foreign governments, and municipal notes. Both Special
Money Fund and MoneyMart invest only in instruments with remaining maturities
of thirteen months or less and which are denominated in U.S. dollars;
however, both Special Money Fund and MoneyMart may invest in longer-term
securities that are accompanied by demand features which will shorten the
effective maturity of the securities to thirteen months or less. Both Special
Money Fund and MoneyMart seek to maintain a net asset value of $1 per share.
After the proposed transaction is consummated, it is expected that the
combined fund will be managed according to the investment objective and policies
of MoneyMart.
WHO ARE THE MANAGERS FOR THESE FUNDS?
Prudential Investments LLC (PI) currently provides investment advisory
services for each Fund. Prudential Investment Management, Inc. (PIM) is the
subadviser for each Fund. PIM is an affiliate of PI.
The Money Markets Team of PIM, headed by Joseph Tully, is responsible for
overseeing the day-to-day management of each Fund.
HOW DO THE EXPENSE STRUCTURES OF THE FUNDS COMPARE?
Special Money Fund has five classes of stock outstanding: Class A
shares, Class B shares, Class C shares, Class B/C shares and Class Z shares.
MoneyMart has four classes of stock outstanding: Class A shares, Class B
shares, Class C shares, and Class Z shares. The following table compares the
expenses incurred by each share class of the Funds, including the pro forma
anticipated expenses of MoneyMart if the proposed transaction is approved.
The historical information presented below is as of December 31, 2003 and the
pro forma information presented below is based on information as of December
31, 2003. As noted above and as discussed in the proxy statement and
prospectus, MoneyMart's operating expense ratio is expected to significantly
increase. Based on historical expenses as of December 31, 2003, MoneyMart's
expense ratios, if the transaction is approved and after removal of the
Wachovia "sweep" assets (and no other assets), are expected to be .807% for
Class A shares and .682% for Class B, C, and Z shares.
SPECIAL MONEY FUND
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
AS OF DECEMBER 31, 2003
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS B/C CLASS Z
------- ------- ------- --------- -------
Management Fees .50% .50% .50% .50% .50%
+ Distribution and service (12b-1) fees .125% None None None None
+ Other expenses .36% .36% .36% .36% .36%
= TOTAL ANNUAL FUND OPERATING EXPENSES .985% .86% .86% .86% .86%
</Table>
MONEYMART
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
AS OF DECEMBER 31, 2003
<Table>
<Caption>
CLASS A CLASS B* CLASS C* CLASS Z
------- -------- -------- -------
Management Fees .301% .301% .301% .301%
+ Distribution and service (12b-1) fees .125% None None None
+ Other expenses .189% .189% .189% .189%
= TOTAL ANNUAL FUND OPERATING EXPENSES .615% .490% .490% .490%
</Table>
<Page>
PRO FORMA**
COMBINED
MONEYMART
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
AS OF DECEMBER 31, 2003
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS Z
------- -------- -------- -------
Management Fees .307% .307% .307% .307%
+ Distribution and service (12b-1) fees .125% -- -- --
+ Other expenses .375% .375% .375% .375%
= TOTAL ANNUAL FUND OPERATING EXPENSES .807% .682% .682% .682%
</Table>
- ----------
* Class B and Class C shares of MoneyMart were first offered on or about
February 28, 2004. The annual fund operating expenses for Class B and Class C
shares are expected to be identical to the operating expenses of Class Z shares,
since all three share classes have identical fees and other expenses.
** The assumptions that have been made in determining the pro forma expenses
are described on page 8 of the proxy statement and prospectus.
HOW DOES THE PERFORMANCE OF EACH FUND COMPARE?
Each Fund has experienced similar performance over the past five years.
The table below compares the annual returns of the Class A shares of each
Fund over the past five calendar years:
<Table>
<Caption>
CALENDAR YEAR FUND AVERAGE ANNUAL RETURNS
------------- ------------------ ----------------------
2003 Special Money Fund .30%
MoneyMart .65%
2002 Special Money Fund 1.13%
MoneyMart 1.35%
2001 Special Money Fund N/A
MoneyMart 3.85%
2000 Special Money Fund N/A
MoneyMart 5.94%
1999 Special Money Fund N/A
MoneyMart 4.69%
</Table>
For more performance information, please see pages 11 and 12 of the proxy
statement and prospectus.
IS THE TRANSACTION A TAXABLE EVENT FOR FEDERAL INCOME TAX PURPOSES?
We expect that the exchange of shares pursuant to the transaction will not
result in taxable gain or loss for U.S. federal income tax purposes. For more
information, see the proxy statement and prospectus.
WHAT WILL BE THE ANTICIPATED SIZE OF MONEYMART AFTER THE TRANSACTION?
If the proposal is approved, based on information available as of December
31, 2003, MoneyMart is anticipated to have approximately $1.06 billion in
assets, which includes the anticipated redemption of customer brokerage
"sweep" assets by Wachovia and assumes the retention of all other MoneyMart
assets.
HOW WILL YOU DETERMINE THE NUMBER OF SHARES OF MONEYMART THAT I WILL RECEIVE?
As of the close of business of the New York Stock Exchange on the date the
transaction is consummated, shareholders will receive the number of full and
fractional Class A, Class B, Class C and Class Z shares of MoneyMart that is
equal in value to the net asset value of their Class A, Class B, Class C, Class
B/C or Class Z shares of Special Money Fund, as applicable, on that date. Class
B/C shareholders who were formerly Class B shareholders of another
JennisonDryden or Strategic Partners Mutual Fund before exchanging into Special
Money Fund will
<Page>
receive Class B shares of MoneyMart. Class B/C shareholders who were formerly
Class C shareholders of another JennisonDryden or Strategic Partners Mutual
Fund before exchanging into Special Money Fund will receive Class C shares of
MoneyMart. Class B/C shares of Special Money Fund are essentially identical
(other than the name) to Class B and Class C shares of MoneyMart. The
transaction is anticipated to occur as soon as practicable following
shareholder approval.
WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH QUORUM BY THE SCHEDULED SHAREHOLDER
MEETING DATE?
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 there are not sufficient votes to approve the proposal by the time of the
Meeting (August 17, 2004), the Meeting may be adjourned to permit further
solicitation of proxy votes.
HAS THE BOARD OF DIRECTORS APPROVED THE PROPOSAL?
Yes. The Board of Directors of Special Money Fund has approved the proposal
and recommends that you vote for the proposal.
WHAT HAPPENS IF THE PROPOSAL IS NOT APPROVED?
If shareholders of Special Money Fund do not approve the proposal, or if
the transaction is not completed, they will continue to be shareholders of
Special Money Fund and the Board of Directors will consider other possible
courses of action, including resubmitting the proposal to shareholders, or
liquidating Special Money Fund.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each share you own of
Special Money Fund on the record date. The record date is May 21, 2004.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy card,
and mailing it in the enclosed postage paid envelope. If you need any
assistance, or have any questions regarding the proposal or how to vote your
shares, please call Prudential at 1-888-999-0282.
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 may 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, call 1-800-454-8683, toll-free. Enter your
12-digit control number from your proxy card. Follow the simple instructions.
Votes must be entered prior to 4 p.m. on August 16, 2004.
HOW DO I SIGN THE PROXY CARD?
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."
<Page>
SPECIAL MONEY MARKET FUND, INC.
100 Mulberry Street
Gateway Center Three, 4th Floor
Newark, New Jersey 07102-4077
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To our shareholders:
Notice is hereby given that a Special Meeting of Shareholders (the
Meeting) of Special Money Fund, Inc. (Special Money Fund), will be held at
100 Mulberry Street, Gateway Center Three, 14th Floor, Newark, New Jersey
07102, on August 17, 2004, at 11:00 a.m. Eastern Time, for the following
purposes:
1. To approve an Agreement and Plan of Reorganization under which Special
Money Fund will transfer all of its assets to, and all of its liabilities will
be assumed by, MoneyMart Assets, Inc. (MoneyMart). In connection with this
proposed transfer, each whole and fractional share of each class of Special
Money Fund shall be exchanged for whole and fractional shares of equal net asset
value of the same or equivalent class of MoneyMart and outstanding shares of
Special Money Fund will be cancelled.
2. To transact such other business as may properly come before the
Meeting or any adjournments of the Meeting.
The Board of Directors of Special Money Fund has fixed the close of
business on May 21, 2004 as the record date for the determination of the
shareholders of Special Money Fund entitled to notice of, and to vote at, the
Meeting and any adjournments of the Meeting.
/s/ Jonathan D. Shain
Jonathan D. Shain
SECRETARY
Dated: June 23, 2004
A PROXY CARD IS ENCLOSED ALONG WITH THE PROXY STATEMENT. PLEASE VOTE YOUR SHARES
TODAY BY SIGNING AND RETURNING THE ENCLOSED PROXY CARD IN THE POSTAGE PREPAID
ENVELOPE PROVIDED. YOU ALSO MAY VOTE BY TELEPHONE OR VIA THE INTERNET AS
DESCRIBED IN THE ENCLOSED MATERIALS. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" THE PROPOSAL.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
<Page>
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER WHO
DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO COMPLETE THE ENCLOSED PROXY
CARD, DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE,
WE ASK FOR YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW
LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING YOUR PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and may help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
on the account registration shown on the proxy card.
2. JOINT ACCOUNTS: Both owners must sign and the signatures should
conform exactly to the names shown on the account registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of account registration or by the
individual executing the proxy card. For example:
<Table>
<Caption>
REGISTRATION VALID SIGNATURE
--------------------------------------- ------------------------
A. 1. XYZ Corporation John Smith, President
2. XYZ Corporation John Smith, President
c/o John Smith, President
B. 1. ABC Company Profit Sharing Plan Jane Doe, Trustee
2. Jones Family Trust Charles Jones, Trustee
3. Sarah Clark, Trustee Sarah Clark, Trustee
u/t/d 7/1/85
C. 1. Thomas Wilson, Custodian Thomas Wilson, Custodian
f/b/o Jessica Wilson UTMA
New Jersey
</Table>
<Page>
MONEYMART ASSETS, INC.
PROSPECTUS
AND
SPECIAL MONEY MARKET FUND, INC.
PROXY STATEMENT
GATEWAY CENTER THREE
100 MULBERRY STREET, 4TH FLOOR
NEWARK, NEW JERSEY 07102-4077
(800) 225-1852
JUNE 23, 2004
This Proxy Statement and Prospectus (Proxy Statement) is being furnished
to shareholders of Special Money Market Fund, Inc. (Special Money Fund), in
connection with the solicitation of proxies by the Board of Directors of
Special Money Fund for use at the Special Meeting of Shareholders of Special
Money Fund, and at any adjournments of the meeting (the Meeting). The Meeting
will be held on August 17, 2004 at 11:00 a.m. Eastern Time at 100 Mulberry
Street, Gateway Center Three, 14th Floor, Newark, New Jersey 07102.
The purpose of the Meeting is for shareholders of Special Money Fund to
vote on an Agreement and Plan of Reorganization under which Special Money
Fund will transfer all of its assets to, and all of its liabilities will be
assumed by, MoneyMart Assets, Inc. (MoneyMart) in exchange for shares of
MoneyMart, which will be distributed to shareholders of Special Money Fund,
and the subsequent cancellation of shares of Special Money Fund. The
Agreement and Plan of Reorganization, a form of which is attached as
Attachment A to this Proxy Statement, is referred to as the Plan. If the
transaction is approved, each whole and fractional share of each class of
Special Money Fund shall be exchanged for whole and fractional shares of
equal net asset value of the same or equivalent class of MoneyMart as soon as
practicable following the Meeting (the Effective Time) and Special Money Fund
will be liquidated and MoneyMart will be the surviving fund.
Special Money Fund and MoneyMart are both diversified funds registered
as open-end management investment companies and formed as Maryland
corporations. The investment objective of Special Money Fund is high current
income consistent with the preservation of principal and liquidity. The
investment objective of MoneyMart is maximum current income consistent with
stability of capital and the maintenance of liquidity.
IF THE SHAREHOLDERS OF SPECIAL MONEY FUND APPROVE THE TRANSACTION, THE
SHAREHOLDERS OF SPECIAL MONEY FUND WILL BECOME SHAREHOLDERS OF MONEYMART.
This Proxy Statement should be retained for your future reference. It
sets forth concisely the information about the transaction and MoneyMart that
shareholders of Special Money Fund should know before voting on the proposed
transaction. A Statement of Additional Information dated June 10, 2004, which
relates to this Proxy Statement, has been filed with the Securities and
Exchange Commission (SEC or the Commission) and is incorporated into this
Proxy Statement by reference and is available upon request and without charge.
This Proxy Statement is accompanied by the Prospectus, dated February
27, 2004, which offers shares of MoneyMart. The Statement of Additional
Information for MoneyMart, dated February 27, 2004, is available upon
request. Enclosed with this Proxy Statement is the Annual Report of
MoneyMart, dated December 31, 2003, which is incorporated into this Proxy
Statement by reference. The Prospectus and Statement of Additional
Information for MoneyMart have been filed with the Commission and are
incorporated into this Proxy Statement by reference. A Prospectus and
Statement of Additional Information for Special Money Fund, both dated
September 5, 2003, as supplemented to date, and the Annual Report of Special
Money Fund dated June 30, 2003 and the Semi-Annual Report of Special Money
Fund dated December 31, 2003, have been filed with the Commission and are
incorporated into this Proxy Statement by reference. Copies of the documents
referred to above may be obtained without charge by contacting Prudential
Mutual Fund Services LLC at Post Office Box 8098, Philadelphia, PA 19101, or
by calling (800) 225-1852.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
MONEYMART'S SHARES, NOR HAS THE COMMISSION DETERMINED THAT THIS PROXY STATEMENT
AND PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL OFFENSE TO STATE
OTHERWISE.
1
<Page>
VOTING INFORMATION
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Directors of Special Money
Fund to be used at the Meeting of the shareholders of Special Money Fund, to
be held on August 17, 2004, at 11:00 a.m. Eastern Time at 100 Mulberry
Street, Gateway Center Three, 14th Floor, Newark, New Jersey 07102.
The purpose of the Meeting is described in the accompanying Notice of
Special Meeting of Shareholders (Notice). The solicitation is made primarily
by the mailing of the Notice, this Proxy Statement and the accompanying proxy
card on or about June 23, 2004. Supplementary solicitations may be made by
mail, telephone, facsimile, electronic means or by personal interview by
representatives of Special Money Fund. In addition, Georgeson Shareholder
Communications Inc., a proxy solicitation firm, may be retained to solicit
shareholders on behalf of Special Money Fund. The costs of retaining
Georgeson Shareholder Communications Inc. and the expenses in connection with
preparing this Proxy Statement and its enclosures will be borne by Special
Money Fund. The anticipated cost of the solicitation, including the expenses
incurred in connection with preparing this Proxy Statement and its
enclosures, is approximately $80,000.
Even if you sign and return the enclosed proxy card, you may revoke your
proxy at any time prior to its use by written notification received by Special
Money Fund, by submitting a later-dated proxy card, or by attending the Meeting
and voting in person.
All proxy cards solicited by the Board of Directors that are properly
completed and received by Special Money Fund prior to the Meeting, and that are
not revoked, will be voted at the Meeting. Shares represented by proxies will be
voted in accordance with the instructions you provide. If no instruction is made
on a properly completed proxy card, it will be voted for the proposal.
If a proxy that is properly signed 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
they have not received instructions from the beneficial owner or other person
entitled to vote shares on this matter for which the broker or nominee does not
have discretionary power), the shares represented thereby will be considered
present for purposes of determining the existence of a quorum for the
transaction of business but, because the proposal requires approval by a
majority of the outstanding voting securities (as defined by the Investment
Company Act of 1940, as amended (the 1940 Act)) of Special Money Fund, will
have the effect of a vote AGAINST the proposal.
Special Money Fund also may arrange to have votes recorded by telephone. If
Special Money Fund takes votes by telephone, it will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to confirm
that their instructions have been properly recorded. Proxies given by telephone
may be revoked at any time before they are voted in the same manner that proxies
voted by mail may be revoked.
Shareholders may also cast their vote via the Internet. The Internet voting
procedures have been designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that shareholders' instructions have been recorded
properly. We have been advised that the Internet voting procedures are
consistent with the requirements of applicable law. Shareholders voting via the
Internet should understand that there may be costs associated with electronic
access, such as usage charges from an Internet access provider and telephone
companies, that must be borne by the shareholder. To vote via the Internet,
shareholders should have their proxy card available and go to the web site:
www.proxyvote.com and enter the 12-digit control number appearing on the proxy
card. Shareholders should then follow the instructions found on the web site.
Proxies given by Internet may be revoked at any time before they are voted in
the same manner that proxies voted by mail may be revoked.
2
<Page>
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting but sufficient votes to approve the proposal are not received, or if
other matters arise requiring shareholder attention, the persons named as proxy
agents may propose one or more adjournments of the Meeting to permit the further
solicitation of proxies. The presence in person or by proxy of 33 1/3% or more
of the shares entitled to vote on matters for Special Money Fund constitutes a
quorum for Special Money Fund. The Meeting may be adjourned by the chairman of
the Meeting to a date not more than 120 days after the original record date. If
voting on a proposed adjournment, the persons named as proxy agents will vote
for the proposed adjournment all shares that they are entitled to vote with
respect to the proposal, unless directed to vote against the proposal, in which
case such shares will be voted against the proposed adjournment. Shares
represented by abstentions or broker "non-votes" will not be voted for or
against an adjournment. Abstentions and broker "non-votes" will have the effect
of a vote against adjournment. A shareholder vote may be taken on the proposal
described in this Proxy Statement or on any other business properly presented at
the Meeting prior to adjournment if sufficient votes have been received.
Shareholders of record at the close of business on May 21, 2004 (the
Record Date) of Special Money Fund will be entitled to vote at the Meeting.
Each such shareholder will be entitled to one vote for each share of Special
Money Fund held on that date (fractional shares will be entitled to a
proportionate fractional vote). On the Record Date, there were 156,350,494
shares issued and outstanding, including 5,111,871 Class A shares, 4,956,281
Class B shares, 9,547,539 Class C shares, 135,396,136 Class B/C shares, and
1,338,664 Class Z shares of Special Money Fund.
The following shareholders held 5% or more of any class of shares of
Special Money Fund on May 21, 2004:
<Table>
<Caption>
NAME ADDRESS CLASS SHARES/%
---- ------- ----- --------
Mr. Robert Johnson 98 Glenwood Dr A 1,283,192/25.10%
Mrs. Bonnie Johnson Co-TTEES Greenwich, CT 06830
Johnson Family Trust
UA DTD 12/29/92
James E Marsh & 842 Bradford Ave A 1,695,380/33.16%
Amy L Marsh JT Ten Westfield, NJ 07090
Wachovia Securities 300 Clover Leaf Dr. B 280,016/5.64%
Mr Gerald Lapides Minneapolis, MN 55422
IRA DTD 09/21/03
Pershing LLC P.O. Box 2052 C 992,999/10.40%
Jersey City, NJ 07303
Prudential Trust Company 2605 NW 31st Ter C 525,595/5.50%
C/F The Rollover IRA New Castle, OK 73065
of Carole L. Rice
Summership & Co 100 Franklin St FI 9 Z 528,135/39.45%
Custom Choice Capital Boston, MA 02110
Preservation - W14Q
</Table>
The following shareholders held 5% or more of any class of shares of
MoneyMart on May 21, 2004:
<Table>
<Caption>
NAME ADDRESS CLASS SHARES/%
---- ------- ----- --------
Pru Defined Contribution Svcs Attn: PMFS Coordinator Z 50,380,130/26.63%
FBO Pru-Non-Trust Accounts 30 Scranton Office Park
Moosic, PA 18507
Prudential Trust Company Attn: PMFS Coordinator Z 138,639,893/73.28%
FBO Pru-DC Trust Accounts 30 Scranton Office Park
Moosic, PA 18507
</Table>
3
<Page>
As of May 21, 2004, the Directors and officers of Special Money Fund and
MoneyMart owned, in the aggregate, less than 1% of each class of each Fund's
total outstanding shares.
VOTE REQUIRED
APPROVAL OF THE TRANSACTION REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF
A MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF SPECIAL MONEY FUND.
APPROVAL OF THE TRANSACTION
SYNOPSIS
The following is a summary of information contained elsewhere in this Proxy
Statement, the Plan (the form of which is attached as Attachment A), and in the
Prospectuses and Statements of Additional Information, as supplemented to date,
of Special Money Fund and MoneyMart which are incorporated into this Proxy
Statement by this reference, and is qualified in its entirety by reference to
these documents. Shareholders should read this Proxy Statement and the
Prospectuses and Statements of Additional Information, as supplemented to date,
of both Funds for more complete information.
Under the Plan, Special Money Fund will transfer all of its assets to, and
all of its liabilities will be assumed by, MoneyMart, a mutual fund also managed
by Prudential Investments LLC (PI), in exchange for shares of MoneyMart. The
outstanding shares of Special Money Fund will be cancelled and current
shareholders of Special Money Fund will become shareholders of MoneyMart.
INVESTMENT OBJECTIVES AND POLICIES
Both Special Money Fund and MoneyMart are money market funds and seek to
maintain a net asset value of $1 per share. Money market funds hold high-quality
short-term debt obligations.
The investment objectives of Special Money Fund and MoneyMart are
substantially similar. The investment objective of Special Money Fund is high
current income consistent with the preservation of principal and liquidity. The
investment objective of MoneyMart is maximum current income consistent with
stability of capital and the maintenance of liquidity.
To achieve its objective, Special Money Fund invests principally in
commercial paper, asset-backed securities, funding agreements, bank notes,
bills, notes, puts and obligations issued by foreign banks, foreign companies
or foreign governments. To achieve its objective, MoneyMart invests in
short-term money market instruments such as obligations issued by the U.S.
government, its agencies and instrumentalities, commercial paper,
asset-backed securities, funding agreements, variable rate demand notes,
bills, notes and other obligations issued by banks, corporations and other
companies (including trust structures), and obligations issued by foreign
banks, companies or foreign governments, and municipal notes. Both Special
Money Fund and MoneyMart invest only in instruments with remaining maturities
of thirteen months or less and which are denominated in U.S. dollars;
however, both Special Money Fund and MoneyMart may invest in longer-term
securities that are accompanied by demand features which will shorten the
effective maturity of the securities to thirteen months or less. Each Fund is
managed to comply with the diversification, quality and other requirements of
Rule 2a-7 under the 1940 Act.
After the transaction is completed it is expected that the combined fund
will be managed according to the investment objective and policies of MoneyMart.
The benchmark index for both Special Money Fund and MoneyMart is the
iMoneyNet, Inc. Taxable Prime Retail Average, which is an average based upon the
average yield of all money market mutual funds in the iMoneyNet, Inc. Taxable
Prime Retail Average.
Special Money Fund and MoneyMart are each managed by PI. The address of PI
is Gateway Center Three, 100 Mulberry Street, 14th Floor, Newark, New Jersey
07102-4077. PI and its predecessors have served as manager or
4
<Page>
administrator to investment companies since 1987. As of December 31, 2003, PI
served as manager to all of the JennisonDryden and Strategic Partners Mutual
Funds, and as manager or administrator to closed-end investment companies,
with aggregate assets of approximately $108.6 billion.
Special Money Fund and MoneyMart typically distribute all or substantially
all of their ordinary income and net realized capital gains annually.
INVESTMENT ADVISORY SERVICES
Under management agreements with Special Money Fund and MoneyMart, PI
currently provides investment advisory services for Special Money Fund and
MoneyMart. Each Fund has the same subadviser, Prudential Investment Management,
Inc. (PIM). The PIM Fixed Income Group, headed by Joseph Tully, manages the
portfolios of Special Money Fund and MoneyMart. For more information about the
subadvisers or portfolio managers, see the Prospectuses of the relevant Fund.
The other service providers to the Funds are not expected to change as a result
of the proposed transaction.
EXPENSE STRUCTURES
Special Money Fund and MoneyMart each pay a monthly management fee to PI
for managing each Fund. PI, in turn, pays out of its management fees a fee to
PIM for providing advisory services to each Fund.
Special Money Fund pays PI a management fee at an annual rate of 0.50 of
1% of average daily net assets. MoneyMart pays PI a management fee at an
annual rate of 0.50% of 1% of average daily net assets up to $50 million, and
0.30 of 1% of average daily net assets over $50 million. For the fiscal year
ended June 30, 2003, Special Money Fund paid PI a management fee of .50 of 1%
of average daily net assets. For the fiscal year ended December 31, 2003,
MoneyMart paid PI a management fee of 0.301 of 1% of average daily net
assets. The management fee rate paid by MoneyMart is not expected to change
if the transaction is approved by shareholders, although the actual fee, as a
percentage of average daily net assets is expected to increase slightly as a
result of the Wachovia redemptions. See "The Proposed Transaction - Operating
Expense Tables."
The management fee paid by each Fund covers PI's oversight of each Fund's
investment portfolios. PI also administers each Fund's corporate affairs and, in
connection therewith, furnishes both Funds with their office facilities,
together with those ordinary clerical and bookkeeping services that are not
furnished by the Funds' custodian or transfer and dividend disbursing agent.
Officers and employees of PI serve as officers and Directors of each Fund
without compensation.
PURCHASES, REDEMPTIONS, EXCHANGES AND DISTRIBUTIONS
Each Fund currently has the same policies with respect to purchasing
shares, redeeming or exchanging shares, and distributions. For more information
regarding the Funds' policies, see "Purchases, Redemptions, Exchanges and
Distributions" below.
TAX CONSIDERATIONS
For federal income tax purposes, in the opinion of counsel, no gain or loss
will be recognized by the shareholders of Special Money Fund as a result of the
transaction. For a more detailed discussion of the federal income tax
consequences, see "U.S. Federal Income Tax Considerations" below.
APPRAISAL RIGHTS
Shareholders of Special Money Fund do not have appraisal rights under
Maryland law in connection with the transaction.
Shareholders of Special Money Fund may, however, redeem their shares at net
asset value prior to the date of the proposed transaction.
5
<Page>
POTENTIAL BENEFITS FROM TRANSACTION
Overall, the proposed transaction would provide shareholders of Special
Money Fund with the following potential benefits:
- investment in a fund with an investment objective and policies similar to
the investment objectives and policies of Special Money Fund; and
- an expected reduction in the operating expense ratio currently applicable
to shareholders of Special Money Fund.
THE BOARD OF DIRECTORS OF SPECIAL MONEY FUND BELIEVES THAT THE TRANSACTION
WILL BENEFIT SHAREHOLDERS, AND RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
TRANSACTION.
THE PROPOSED TRANSACTION
Shareholders of Special Money Fund will be asked at the Meeting to vote
upon and approve the Plan under which Special Money Fund will transfer all of
its assets to, and all of its liabilities will be assumed by, MoneyMart,
whereupon MoneyMart will be the surviving mutual fund. Each whole and
fractional share of each class of Special Money Fund will be exchanged for
whole and fractional shares of equal net asset value of the same or
equivalent class of MoneyMart, and outstanding shares of Special Money Fund
will be cancelled, on or about the Effective Time. Shareholders of Special
Money Fund will receive shares of MoneyMart and will become shareholders of
MoneyMart. Approval of the transaction will be determined by approval of the
shareholders of Special Money Fund. No vote by shareholders of MoneyMart is
required.
The Plan provides that it is a condition to complete the transaction that
MoneyMart will have received an opinion of counsel to the effect that the
transaction will not result in any taxable gain or loss for U.S. federal income
tax purposes to Special Money Fund or MoneyMart or to the shareholders of either
of the Funds.
FUND OPERATING EXPENSES
Each Fund pays a management fee to PI for managing its investments and
business affairs that is calculated and paid to PI every month.
Special Money Fund pays PI a management fee at an annual rate of 0.50 of 1%
of average daily net assets. MoneyMart pays PI a management fee at an annual
rate of 0.50% of 1% of average daily net assets up to $50 million, and 0.30 of
1% of average daily net assets over $50 million. For the fiscal year ended June
30, 2003, Special Money Fund paid PI a management fee of .50 of 1% of average
daily net assets. For the fiscal year ended December 31, 2003, MoneyMart paid PI
a management fee of 0.301 of 1% of average daily net assets. The management
fee paid by MoneyMart is not expected to change if the transaction is approved
by shareholders.
In addition to the management fee, each Fund incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. For the fiscal year ended June 30, 2003,
Special Money Fund's annualized total operating expense ratio for Class A
shares was 0.985%, and for Class B, Class C, Class B/C and Class Z shares was
0.78%. For the fiscal year ended December 31, 2003, MoneyMart's annualized
total operating expense ratio for Class A shares was 0.615%, and for Class Z
shares was 0.490%. Class B and Class C shares of MoneyMart were not offered
as of December 31, 2003, but the annualized total operating expense ratio for
each is expected to be .490%.
If shareholders of Special Money Fund approve the transaction, MoneyMart's
expense structure will apply. As further discussed below, due to the anticipated
redemption of all "sweep" assets from MoneyMart by Wachovia Securities LLC
(Wachovia), it is expected that the annualized total operating expense ratios
for each share class of MoneyMart will significantly increase from the December
31, 2003 levels. HOWEVER, BECAUSE THE OPERATING EXPENSE RATIOS OF SPECIAL MONEY
FUND HAVE HISTORICALLY BEEN CONSIDERABLY HIGHER THAN THE OPERATING EXPENSE
RATIOS OF MONEYMART, SHAREHOLDERS OF SPECIAL MONEY FUND ARE STILL EXPECTED TO
BENEFIT FROM A REDUCTION IN EXPENSE RATIOS IF THE TRANSACTION IS APPROVED,
BECAUSE MONEYMART'S EXPENSE RATIOS, EVEN AFTER ACCOUNTING FOR THE IMPACT OF THE
WACHOVIA REDEMPTIONS, ARE STILL ANTICIPATED TO BE LOWER THAN THE CURRENT EXPENSE
RATIOS OF SPECIAL MONEY FUND.
6
<Page>
SHAREHOLDER FEES AND EXPENSES
The first table below shows the shareholder fees that are imposed on new
purchases or redemptions of shares of MoneyMart, and are the same as the
shareholder fees imposed on new purchases of Special Money Fund. The second
set of tables show the operating fees and expenses of Class A, Class B, Class
C and Class Z shares of Special Money Fund and MoneyMart and Class B/C shares
of Special Money Fund, and pro forma fees for the combined fund after giving
effect to the transaction (the "Combined MoneyMart"), based on information as
of December 31, 2003.
THE PRO FORMA FEES AND EXPENSES SHOWN IN THE FOLLOWING TABLES ASSUME
THAT SHAREHOLDERS OF SPECIAL MONEY FUND APPROVE THE TRANSACTION. THE PRO
FORMA FEES AND EXPENSES SHOWN IN THE FOLLOWING TABLES REFLECT THE IMPACT OF
THE ANTICIPATED REDEMPTION OF "SWEEP" ASSETS FROM MONEYMART BY WACHOVIA. SEE
"ANTICIPATED IMPACT OF THE WACHOVIA REDEMPTIONS" BELOW FOR ADDITIONAL
INFORMATION.
Fund operating expenses are paid out of each Fund's assets. Expenses are
factored into each Fund's share price or dividends and are not charged directly
to shareholder accounts. The figures are based on historical expenses of
Special Money Fund and MoneyMart as of December 31, 2003.
SHAREHOLDER FEES(1) (paid directly from your investment)
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS B/C CLASS Z
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) None None None None None
Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase price
or sale proceeds) None None None None None
Maximum sales charge (load) imposed on
reinvested dividends and other distributions None None None None None
Redemption Fee None None None None None
Exchange Fee None None None None None
</Table>
(1) YOUR BROKER MAY CHARGE YOU A SEPARATE OR ADDITIONAL FEE FOR PURCHASES OF
SHARES OR AN ADMINISTRATION FEE ON FUND BALANCES, INCLUDING INCOME FROM FUND
DISTRIBUTIONS.
OPERATING EXPENSE TABLES
CLASS A SHARES
<Table>
<Caption>
PRO FORMA
COMBINED
SPECIAL MONEY FUND MONEYMART MONEYMART
CLASS A SHARES CLASS A SHARES CLASS A SHARES+
------------------ ---------------- ----------------
Management Fees .50% .301% .307%
+ Distribution and service (12b-1) fees .125 .125 .125
+ Other expenses .36 .189 .375
= TOTAL ANNUAL FUND OPERATING EXPENSES .985% .615% .807%
</Table>
CLASS B SHARES
<Table>
<Caption>
PRO FORMA
COMBINED
SPECIAL MONEY FUND SPECIAL MONEY FUND MONEYMART MONEYMART
CLASS B SHARES CLASS B/C SHARES* CLASS B SHARES** CLASS B SHARES**+
------------------ ------------------ ---------------- -----------------
Management Fees .50% .50% .301% .307%
+ Distribution and service (12b-1) fees -- -- -- --
+ Other expenses .36 .36 .189 .375
= TOTAL ANNUAL FUND OPERATING EXPENSES .86% .86% .490% .682%
</Table>
7
<Page>
CLASS C SHARES
<Table>
<Caption>
PRO FORMA
COMBINED
SPECIAL MONEY FUND SPECIAL MONEY FUND MONEYMART MONEYMART
CLASS C SHARES CLASS B/C SHARES* CLASS C SHARES** CLASS C SHARES**+
------------------ ------------------ ---------------- -----------------
Management Fees .50% .50% .301% .307%
+ Distribution and service (12b-1) fees -- -- -- --
+ Other expenses .36 .36 .189 .375
= TOTAL ANNUAL FUND OPERATING EXPENSES .86% .86% .490% .682%
</Table>
CLASS Z SHARES
<Table>
<Caption>
PRO FORMA
COMBINED
SPECIAL MONEY FUND MONEYMART MONEYMART
CLASS Z SHARES CLASS Z SHARES CLASS Z SHARES+
------------------ ---------------- ----------------
Management Fees .50% .301% .307%
+ Distribution and service (12b-1) fees -- -- --
+ Other expenses .35 .189 .375
= TOTAL ANNUAL FUND OPERATING EXPENSES .85% .490% .682%
</Table>
* CLASS B/C SHAREHOLDERS WHO WERE FORMERLY CLASS B SHAREHOLDERS OF ANOTHER
JENNISONDRYDEN MUTUAL FUND OR STRATEGIC PARTNERS FUND BEFORE EXCHANGING INTO
SPECIAL MONEY FUND WILL RECEIVE CLASS B SHARES OF MONEYMART. CLASS B/C
SHAREHOLDERS WHO WERE FORMERLY CLASS C SHAREHOLDERS OF ANOTHER JENNISONDRYDEN
MUTUAL FUND OR STRATEGIC PARTNERS FUND BEFORE EXCHANGING INTO SPECIAL MONEY
FUND WILL RECEIVE CLASS C SHARES OF MONEYMART.
** Class B and Class C shares of MoneyMart were first offered on or about
February 28, 2004. The annual fund operating expenses for Class B and Class C
shares are expected to be identical to the operating expenses of Class Z
shares, since all three share classes have identical fees and other expenses.
+ The following assumptions have been made in determining the pro forma
combined amounts:
1. In estimating the average net assets to be used to calculate the pro forma
expense ratios and expense table amounts, (i) the respective Fund's
existing average net assets as of December 31, 2003 were reduced to reflect
the anticipated reduction in assets resulting from the redemptions of sweep
assets in MoneyMart by Wachovia Securities (i.e., 80% reduction in assets
of MoneyMart) and (ii) non-sweep assets in MoneyMart were calculated at the
December 31, 2003 level.
2. In estimating the reduction in expenses pursuant to the reduction in assets,
the following assumptions have been made:
(a) Transfer agency expenses and shareholder reporting expenses have been
adjusted to reflect the anticipated reduction in the number of accounts
correlating to the reduction in assets.
(b) Custody fees have been adjusted to reflect the custody fees incurred by
comparably sized mutual funds.
(c) No significant reductions in audit, legal and other expenses are
estimated as a result of the anticipated reduction in asset size of
the Funds.
EXAMPLES OF THE EFFECT OF FUND EXPENSES
The following table illustrates the expenses on a hypothetical $10,000
investment in each Fund under the current and pro forma (combined fund)
expenses as of December 31, 2003 calculated at the rates stated above for the
first year, and thereafter using gross expenses with no fee waivers or
expense reimbursements, assuming a 5% annual return, and assuming that you
sell your shares at the end of each period. THE COMBINED MONEYMART EXAMPLES
BELOW REFLECT THE IMPACT OF THE ANTICIPATED REDEMPTION OF SWEEP ASSETS BY
WACHOVIA BASED ON THE ASSUMPTIONS NOTED UNDER THE HEADING "OPERATING EXPENSES
TABLES." See "Anticipated Impact of the Wachovia Redemptions" below for
additional information.
8
<Page>
CLASS A SHARES*
<Table>
<Caption>
THREE FIVE TEN
ONE YEAR YEARS YEARS YEARS
---------- ---------- ---------- ----------
Special Money Fund $ 101 $ 315 $ 547 $ 1,213
MoneyMart 63 199 346 774
Combined MoneyMart $ 82 $ 258 $ 448 $ 998
</Table>
CLASS B SHARES*
<Table>
<Caption>
THREE FIVE TEN
ONE YEAR YEARS YEARS YEARS
---------- ---------- ---------- ----------
Special Money Fund (Class B) $ 588 $ 574 $ 577 $ 1,113
Special Money Fund (Class B/C)** 588 574 577 1,061
MoneyMart -- -- -- --
Combined MoneyMart $ 570 $ 518 $ 480 $ 902
</Table>
CLASS C SHARES*
<Table>
<Caption>
THREE FIVE TEN
ONE YEAR YEARS YEARS YEARS
---------- ---------- ---------- ----------
Special Money Fund (Class C) $ 188 $ 274 $ 477 $ 1,061
Special Money Fund (Class B/C)** 188 274 477 1,061
MoneyMart -- -- -- --
Combined MoneyMart $ 170 $ 218 $ 380 $ 849
</Table>
CLASS Z SHARES
<Table>
<Caption>
THREE FIVE TEN
ONE YEAR YEARS YEARS YEARS
---------- ---------- ---------- ----------
Special Money Fund $ 87 $ 271 $ 471 $ 1,049
MoneyMart 50 157 274 616
Combined MoneyMart $ 70 $ 218 $ 380 $ 849
</Table>
These examples assume that all dividends and other distributions are
reinvested and that the percentage amounts listed under "Total annual Fund
operating expenses" remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual or
expected expenses, which may vary. The assumed return of 5% is not a prediction
of, and does not represent, actual or expected performance of either Fund.
* Shareholders who exchange Class A (in some cases), Class B or Class C shares
of another fund into shares of either Fund are generally subject to a
Contingent Deferred Sales Charge (CDSC) imposed by the original fund upon
their redemption of Fund shares depending on the date of purchase of shares
of the original fund. These examples take into account the CDSC generally
applicable to Class B shares of an original fund. These examples assume the
applicable CDSC although if you have held shares of the original fund for
more than one year, the CDSC will be lower. In other words, the "one year,
three year, five year, and ten year" expense examples above assume that the
applicable CDSC is the CDSC applicable to an investor who redeems shares of
Special Money Fund after having held shares of the original Fund for one
year, three years, five years, or ten years. Investors should refer to the
prospectus of the original fund for further details about the applicable
CDSC. For further information, see "How to Buy, Sell and Exchange Shares of
the Fund - How to Sell Your Shares."
** Class B/C shareholders who were formerly Class B shareholders of another
JennisonDryden Mutual Fund or Strategic Partners Fund before exchanging into
Special Money Fund will receive Class B shares of MoneyMart. Class B/C
shareholders who were formerly Class C shareholders of another JennisonDryden
Mutual Fund or Strategic Partners Fund before exchanging into Special Money
Fund will receive Class C shares of MoneyMart.
9
<Page>
PRO FORMA CAPITALIZATION
The following table shows the capitalization of Special Money Fund and
MoneyMart as of December 31, 2003. The table below also shows the pro forma
Combined MoneyMart capitalization WHICH REFLECTS THE IMPACT OF THE
ANTICIPATED REDEMPTION OF SWEEP ASSETS BY WACHOVIA.
<Table>
<Caption>
*
PRO FORMA
COMBINED
SPECIAL MONEY FUND MONEYMART MONEYMART
------------------ ------------- -------------
Net Assets (000s)
Class A $ 2,805 $ 1,017,881 $ 1,020,686
Class B* $ 4,656 -- 4,656
Class B/C** 151,878 -- 151,878
Class C* 1,083 -- 1,083
Class Z 2,943 37,544 40,487
Net Asset Value Per Share
Class A $ 1.00 $ 1.00 $ 1.00
Class B* $ 1.00 -- $ 1.00
Class B/C** $ 1.00 -- $ --
Class C* $ 1.00 -- $ 1.00
Class Z $ 1.00 $ 1.00 $ 1.00
Shares Outstanding (000s)
Class A 2,805 1,017,881 1,020,686
Class B* 4,656 -- 4,656
Class B/C** 151,878 -- 151,878
Class C* 1,083 -- 1,083
Class Z 2,943 37,544 40,487
</Table>
* Class B and Class C shares of MoneyMart were not offered as of December 31,
2003.
** Class B/C shareholders who were formerly Class B shareholders of another
JennisonDryden or Strategic Partners Mutual Fund before exchanging into
Special Money Fund will receive Class B shares of MoneyMart. Class B/C
shareholders who were formerly Class C shareholders of another
JennisonDryden or Strategic Partners Mutual Fund before exchanging into
Special Money Fund will receive Class C shares of MoneyMart.
ANTICIPATED IMPACT OF THE WACHOVIA REDEMPTIONS
Historically, a significant portion of the assets invested in MoneyMart
have been "sweep" cash assets maintained in customer brokerage accounts
offered by Prudential Securities Incorporated (PSI). "Sweep" assets represent
cash balances held in customer brokerage accounts that are "swept" out of
each customer's brokerage account, typically daily, and invested in a
designated investment option. In 2003, PSI was effectively acquired by
Wachovia, and PSI became a division of Wachovia. Wachovia determined that it
would no longer offer MoneyMart as an investment option for "sweep" cash
assets maintained in the former PSI customer brokerage accounts, and instead
"sweep" assets would be deposited into the bank accounts offered through
Wachovia. Accordingly, effective as of November 10, 2003, no new "sweep" cash
assets are being invested in MoneyMart. Existing cash assets maintained in
the Wachovia (former-PSI) brokerage accounts that are invested in MoneyMart
will continue to be depleted over the next few months, as Wachovia brokerage
customers redeem MoneyMart shares. It is expected that by September 2004,
virtually all of the "sweep" cash assets will have been redeemed.
Because a significant portion of the assets invested in MoneyMart are
these "sweep" cash assets (approximately 80% as of December 31, 2003), the
decision by Wachovia to discontinue offering MoneyMart as an investment
option is expected to significantly reduce the size of MoneyMart, which is
expected to result in a significant increase in the historic expense ratios
of MoneyMart, because fixed costs would be spread across fewer assets.
10
<Page>
As a result of the Wachovia redemptions and the reduction in assets
invested in the money market funds that it manages, PI, the investment adviser
of both Special Money Fund and MoneyMart, has determined that it would no
longer be viable to offer all of the money market mutual funds currently part
of the JennisonDryden Mutual Funds or Strategic Partners Funds fund family.
Accordingly, PI recommended to the Board of Directors of both Special Money
Fund and MoneyMart that Special Money Fund be reorganized into MoneyMart, the
larger of the two funds.
Because Special Money Fund has not been offered as an investment option for
sweep cash assets, Wachovia's decision to discontinue offering MoneyMart as an
investment option for sweep cash assets is not expected to materially impact the
asset levels, expenses, or operations of Special Money Fund. However, the
transaction, if approved, is expected to benefit Special Money Fund
shareholders, because the operating expense ratio of MoneyMart following
consummation of the transaction is expected to be lower than the current
operating expense ratio of Special Money Fund. SINCE THE OPERATING EXPENSES OF
SPECIAL MONEY FUND HAVE HISTORICALLY BEEN CONSIDERABLY HIGHER THAN THE OPERATING
EXPENSE RATIOS OF MONEYMART, SHAREHOLDERS OF SPECIAL MONEY FUND ARE EXPECTED TO
BENEFIT FROM A REDUCTION IN EXPENSE RATIOS IF THE TRANSACTION IS APPROVED,
BECAUSE MONEYMART'S EXPENSE RATIOS, EVEN AFTER ACCOUNTING FOR THE IMPACT OF THE
WACHOVIA REDEMPTIONS, ARE STILL ANTICIPATED TO BE LOWER THAN THE CURRENT EXPENSE
RATIOS OF SPECIAL MONEY FUND.
PERFORMANCE COMPARISONS OF THE FUNDS
The following tables compare each Fund's annual returns and average annual
total returns and yield for the periods set forth below. Average annual total
returns and yield are based on past results and are not an indication of future
performance.
SPECIAL MONEY FUND
[CHART]
ANNUAL RETURNS(1) (CLASS A SHARES) (as of 12/31/03)
<Table>
2002 1.13%
2003 0.30%
</Table>
BEST QUARTER: 1.06% (2nd quarter of 2001) WORST QUARTER: 0.04% (3rd quarter of
2003)
(1) THE FUND'S RETURNS ARE AFTER DEDUCTION OF EXPENSES. CLASS A SHARES WERE
FIRST OFFERED EFFECTIVE JANUARY 26, 2001.
11
<Page>
AVERAGE ANNUAL RETURNS(1) (as of 12/31/03)
<Table>
<Caption>
1 YR 5 YR 10 YR SINCE INCEPTION
Class A Shares 0.30% N/A N/A 1.60% (since 1-26-01)
Class B Shares N/A N/A N/A N/A (since 9-9-02)
Class C Shares N/A N/A N/A N/A (since 9-9-02)
Class B/C Shares 0.43% 3.23% 4.06% 4.33% (since 1-22-90)
Class Z Shares 0.43% N/A N/A 0.96% (since 1-26-01)
Lipper Average(2) 0.44% 3.01% 3.94% N/A
7-DAY YIELD(1) (AS OF 12/31/03)
Class A Shares .19 N/A N/A N/A
Class B Shares .32 N/A N/A N/A
Class C Shares .32 N/A N/A N/A
Class B/C Shares .32 N/A N/A N/A
Class Z Shares .32 N/A N/A N/A
iMoneyNet Taxable
Prime Retail Average(3) .39 N/A N/A N/A
</Table>
(1) THE FUND'S RETURNS AND YIELD ARE AFTER DEDUCTION OF EXPENSES.
(2) THE LIPPER AVERAGE IS BASED UPON THE AVERAGE RETURN OF ALL MUTUAL FUNDS
IN THE U.S. TAXABLE MONEY MARKET FUNDS CATEGORY. LIPPER RETURNS SINCE
INCEPTION ARE 1.52% FOR CLASS A, .55% FOR CLASS B, .55% FOR
CLASS C, 4.19% FOR CLASS B/C, AND 1.14% FOR CLASS Z. THESE RETURNS
WOULD BE LOWER IF THEY INCLUDED THE EFFECT OF SALES CHARGES AND TAXES.
SOURCE: LIPPER, INC.
(3) iMONEYNET, INC. REPORTS A SEVEN-DAY CURRENT YIELD, NET ASSET VALUE
(NAV) AND WEIGHTED AVERAGE MATURITY (WAM) ON TUESDAYS. THIS IS THE
DATA OF ALL FUNDS IN THE iMONEYNET TAXABLE PRIME RETAIL AVERAGE (FORMERLY
CALLED THE iMONEYNET GENERAL PURPOSE AVERAGE) CATEGORY AS OF DECEMBER
31, 2003. THE YIELD WOULD BE LOWER IF IT INCLUDED THE EFFECT OF SALES
CHARGES AND TAXES.
MONEYMART
[CHART]
ANNUAL RETURNS(1) (CLASS A SHARES) (as of 12/31/03)
<Table>
1994 3.72%
1995 5.51%
1996 4.97%
1997 5.09%
1998 5.06%
1999 4.69%
2000 5.94%
2001 3.85%
2002 1.35%
2003 0.65%
</Table>
BEST QUARTER: 1.59% (4th quarter of 2000) WORST QUARTER: 0.14% (3rd quarter of
2003)
12
<Page>
AVERAGE ANNUAL RETURNS(1) (as of 12/31/03)
<Table>
<Caption>
1 YR 5 YR 10 YR SINCE INCEPTION
Class A Shares 0.65% 3.28% 4.08% 6.70% (since 6-1-76)
Class Z Shares 0.77% 3.41% N/A 4.03% (since 3-1-96)
Lipper Average(2) 0.44% 3.01% 3.94% N/A
7-Day Yield1 (as of 12/31/03)
Class A Shares 0.49% N/A N/A N/A
Class Z Shares 0.62% N/A N/A N/A
iMoneyNet, Inc. Taxable Prime Retail Average(3) 0.38% N/A N/A N/A
</Table>
(1) THE FUND'S RETURNS AND YIELD ARE AFTER DEDUCTION OF EXPENSES.
(2) THE LIPPER AVERAGE IS BASED UPON THE AVERAGE RETURN OF ALL MUTUAL FUNDS IN
THE U.S. TAXABLE MONEY MARKET FUNDS CATEGORY. LIPPER RETURNS SINCE INCEPTION
ARE 6.61% FOR CLASS A AND 4.16% FOR CLASS Z SHARES. THESE RETURNS WOULD BE
LOWER IF THEY INCLUDED THE EFFECT OF SALES CHARGES AND TAXES. SOURCE: LIPPER
INC.
(3) iMONEYNET, INC. REPORTS A SEVEN-DAY CURRENT YIELD, NET ASSET VALUE (NAV),
AND WEIGHTED AVERAGE MATURITY (WAM) ON TUESDAYS. THIS IS THE DATA OF ALL
FUNDS IN THE iMONEYNET, INC. TAXABLE PRIME RETAIL AVERAGE (FORMERLY CALLED
THE iMONEYNET GENERAL PURPOSE AVERAGE) CATEGORY AS OF DECEMBER 31, 2003.
THE YIELD WOULD BE LOWER IF IT INCLUDED THE EFFECT OF SALES CHARGES AND
TAXES.
Class B shares and Class C shares are new, and therefore, no performance
information is available for these share classes.
INVESTMENT OBJECTIVES AND POLICIES
If the transaction is approved, the shareholders of Special Money Fund will
become shareholders of MoneyMart. The following information compares the
investment objectives and policies of the Funds.
INVESTMENT OBJECTIVES
The investment objective of Special Money Fund is high current income
consistent with the preservation of principal and liquidity. The investment
objective of MoneyMart is maximum current income consistent with stability of
capital and the maintenance of liquidity.
The investment objective of each Fund is a fundamental policy. This means
that the objective cannot be changed without the approval of shareholders of the
relevant Fund. There can be no assurance that either Fund will achieve its
objective. With the exception of fundamental policies, investment policies
(other than specified investment restrictions) of the Funds can be changed
without shareholder approval.
PRINCIPAL INVESTMENT STRATEGIES
Both Special Money Fund and MoneyMart are money market funds with
substantially similar investment objectives, and they seek to achieve their
investment objectives through substantially similar investment strategies.
To achieve its objective, Special Money Fund invests principally in
commercial paper, asset-backed securities, funding agreements, bank notes,
bills, notes, puts and obligations issued by foreign banks, foreign companies
or foreign governments. To achieve its objective, MoneyMart invests in
short-term money market instruments such as obligations issued by the U.S.
government, its agencies and instrumentalities, commercial paper,
asset-backed securities, funding agreements, variable rate demand notes,
bills, notes and other obligations issued by banks, corporations and other
companies (including trust structures), and obligations issued by foreign
banks, companies or foreign governments, and municipal notes. Both Special
Money Fund and MoneyMart Assets invest only in instruments with remaining
maturities of thirteen months or less and which are denominated in U.S.
dollars; however, both Special Money Fund and MoneyMart may invest in
longer-term securities that are accompanied by demand
13
<Page>
features which will shorten the effective maturity of the securities to
thirteen months or less. Each Fund is managed to comply with the
diversification, quality and other requirements of Rule 2a-7 under the 1940
Act. This means, generally, that the instruments each Fund purchases present
"minimal credit risk" and are of "eligible quality." "Eligible quality" for
this purpose means a security: (1) rated in one of the two highest short-term
rating categories by at least two nationally recognized statistical rating
organizations (NRSROs), or, if only one NRSRO has rated that security, so
rated by that NRSRO; (2) rated in one of the three highest long-term rating
categories by at least two NRSROs, or, if only one NRSRO has rated the
security, so rated by that NRSRO; or (3) if unrated, of comparable quality as
determined by each Fund's investment adviser. All securities that the Funds
purchase will be denominated in U.S. dollars but may be issued by a foreign
issuer.
COMPARISON OF OTHER POLICIES OF THE FUNDS
INVESTMENT RESTRICTIONS
Special Money Fund and MoneyMart have similar fundamental investment
restrictions, except that Special Money Fund's fundamental investment
restrictions were recently amended, by shareholders, to provide (among other
things) additional flexibility to pursue the Fund's investment objective and
to eliminate restrictions that are no longer required but were imposed years
ago. MoneyMart's fundamental investment restrictions are generally more
restrictive than those of Special Money Fund. For example, with respect to
diversification, borrowing and lending, Special Money Fund's restrictions are
tied to compliance with 1940 Act Laws, Interpretations and Exemptions
(meaning the 1940 Act and the rules and regulations promulgated thereunder,
as each may be amended from time to time, and the exemptive orders, SEC
releases, no-action letters or similar relief or interpretations related
thereto). MoneyMart's restrictions, on the other hand, are explicitly tied to
actual current requirements. The restrictions are thus similar, but to the
extent there is a future change in the 1940 Act Laws, Interpretations and
Exemptions, Special Money Fund's restrictions are more capable of
accommodating such a change. Special Money Fund does not have a restriction
prohibiting the purchase of securities on margin or prohibiting short sales
of securities, whereas MoneyMart prohibits the purchase of securities on
margin, except for the use of short-term credit necessary for clearance of
purchases or sales of portfolio securities, as well as short sales of
securities or maintaining a short position. MoneyMart also prohibits the
purchase of oil and gas interests and the purchase of commodities or
commodity contracts; Special Money Fund only prohibits the buying or selling
of physical commodities or contracts involving physical commodities. In
addition, MoneyMart has fundamental restrictions prohibiting (1) making
investments for the purpose of exercising control or management; (2)
purchasing common stock or other voting securities, preferred stock, warrants
or other equity securities; and (3) purchasing securities of other investment
companies, except in connection with a merger, consolidation, acquisition or
reorganization, while such restrictions are non-fundamental policies for
Special Money Fund. Non-fundamental policies may be changed with the approval
of the Board of Directors of a fund while fundamental policies cannot be
changed without the approval of shareholders.
COMPARISON OF PRINCIPAL RISK FACTORS
Both Funds are money market funds, which are intended to provide investors
with a lower risk, highly liquid investment option. Although each Fund attempts
to maintain a net asset value of $1 per share, there can be no guarantee that
either Fund will always be able to do so. It is possible that a shareholder
investing in either Fund could lose money.
The money market securities in which each Fund invests are subject to the
risk that the obligations could lose value if interest rates rise or there is a
lack of investor confidence in the borrower. In addition, certain securities in
which each Fund may invest may be subject to the risk that the issuer may be
unable to make principal and interest payments when they are due.
Each Fund's investments in foreign securities involve additional risks.
For example, foreign banks and companies generally are not subject to
regulatory requirements comparable to those applicable to U.S. banks and
companies, and laws and accounting standards typically are not as strict in
foreign countries as they are in the United States. Foreign fixed income and
currency markets may be less stable than U.S. markets. In addition, political
14
<Page>
developments and changes in currency rates may adversely affect the value of
foreign securities. In all cases, however, the Funds invest only in U.S.
dollar-denominated securities.
Each Fund may also hold up to 10% of the Fund's net assets in illiquid
securities, including securities with legal or contractual restrictions on
resale, those without a readily available market and repurchase agreements with
maturities longer than seven days. Illiquid securities are subject to the risks
that they may be difficult to value precisely and may be difficult to sell at
the time or price desired.
As described above, each Fund has similar investment objectives, policies
and permissible investments.
Like any mutual fund, an investment in either Special Money Fund or
MoneyMart could lose value. For a more complete discussion of the risks
associated with either of these Funds, please refer to the "Risk/Return Summary"
or the section entitled "Investment Risks" in each Fund's Prospectus.
OPERATIONS OF MONEYMART
FOLLOWING THE TRANSACTION
Neither PI nor PIM expects MoneyMart to revise its investment policies as a
result of the transaction. Neither PI nor PIM anticipate any significant changes
to MoneyMart's management or general investment approach. The agents that
provide Special Money Fund with services, such as its Custodian and Transfer
Agent, which also provide these services to MoneyMart, are not expected to
change.
All of the current investments of Special Money Fund are permissible
investments for MoneyMart. Nevertheless, PI may sell securities held by
Special Money Fund or PIM may sell securities held by MoneyMart between
shareholder approval and the Effective Time of the transaction as may be
necessary or desirable in the ongoing management of each Fund and the
adjustment of each Fund's portfolio in anticipation of the transaction.
Transaction costs associated with such adjustments will be borne by the Fund
that incurred them. Transaction costs associated with such adjustments that
occur after the Effective Time will be borne by MoneyMart.
PURCHASES, REDEMPTIONS, EXCHANGES AND DISTRIBUTIONS
PURCHASING SHARES
The price to buy one share of a class of each Fund is that class's net
asset value, or NAV. Each Fund offers Class A, Class B, Class C, and Class Z
shares. Special Money Fund also offers Class B/C shares, but MoneyMart does not
offer Class B/C shares. For each Fund, Class B shares, Class C shares and Class
B/C shares (Special Money Fund only) are available primarily pursuant to an
exchange of shares from another eligible JennisonDryden or Strategic Partners
mutual fund. For each Fund, the minimum initial investment amount is $1,000 for
Class A shares. There is no minimum initial investment amount for Class Z
shares, although Class Z shares are available only to a limited group of
investors. Class B/C shareholders who were formerly Class B shareholders of
another JennisonDryden Mutual Fund or Strategic Partners Fund before exchanging
into Special Money Fund will receive Class B shares of MoneyMart. Class B/C
shareholders who were formerly Class C shareholders of another JennisonDryden
Mutual Fund or Strategic Partners Fund before exchanging into Special Money Fund
will receive Class C shares of MoneyMart. Class B/C shares of Special Money Fund
are essentially identical (other than the name) to Class B and Class C shares of
MoneyMart.
Shares in the Funds are purchased at the next NAV calculated after your
investment is received and accepted, plus any applicable sales charge. Each
Fund's NAV is normally calculated once each business day as of the close of
regular trading on the New York Stock Exchange (usually, 4:00 p.m., New York
time). Refer to each Fund's Prospectus for more information regarding how to buy
shares.
REDEEMING SHARES
Your shares will be sold at the next NAV determined after your order to
sell is received. Refer to each Fund's Prospectus for more information regarding
how to sell shares.
15
<Page>
PURCHASES AND REDEMPTIONS OF SPECIAL MONEY FUND
At the close of business on November 19, 2003, Special Money Fund closed to
new accounts pending the transaction with MoneyMart. Shareholders of Special
Money Fund may redeem shares through the Effective Time of the transaction. If
the transaction is approved, the purchase and redemption policies will be the
same as the applicable policies of Special Money Fund.
EXCHANGES OF FUND SHARES
The exchange privilege currently offered by Special Money Fund is
substantially the same as for MoneyMart and is not expected to change after the
transaction. Shareholders of the Funds may exchange their shares for shares of
any other JennisonDryden or Strategic Partners mutual fund. Refer to each Fund's
Prospectus for restrictions governing exchanges.
DIVIDENDS AND OTHER DISTRIBUTIONS
Both Funds distribute substantially all of their net investment income and
net capital gains to shareholders each year. Both Funds declare dividends, if
any, annually. At or before the Effective Time, Special Money Fund shall declare
additional dividends or other distributions in order to distribute substantially
all of its investment income and realized capital gains for its taxable year
ending upon completion of the transaction.
THE PROPOSED TRANSACTION
AGREEMENT AND PLAN OF REORGANIZATION
The Agreement and Plan of Reorganization (the Plan) describes the terms and
conditions under which the proposed transaction may be completed. Significant
provisions of the Plan are summarized below; however, this summary is qualified
in its entirety by reference to the Plan, the form of which is attached as
Attachment A to this Proxy Statement.
The Plan contemplates that Special Money Fund will transfer all of its
assets to, and all of its liabilities will be assumed by, MoneyMart at the
Effective Time and MoneyMart will be the surviving fund. Each whole and
fractional Class A, Class B, Class C, Class B/C or Class Z share of Special
Money Fund will be exchanged for whole and fractional Class A, Class B, Class
C or Class Z shares as applicable, of equal net asset value of MoneyMart.
Class B/C shareholders who were formerly Class B shareholders of another
JennisonDryden or Strategic Partners Mutual Fund before exchanging into
Special Money Fund will receive Class B shares of MoneyMart. Class B/C
shareholders who were formerly Class C shareholders of another JennisonDryden
Mutual Fund or Strategic Partners Fund before exchanging into Special Money
Fund will receive Class C shares of MoneyMart. If requested, MoneyMart will
issue certificates representing its shares, but only upon surrender of
certificates for shares of Special Money Fund.
Immediately after the closing of the transaction, each former Special Money
Fund shareholder will own shares of MoneyMart equal to the aggregate net asset
value of that shareholder's shares of Special Money Fund immediately prior to
the closing of the transaction. The net asset value per share of MoneyMart will
not be affected by the transaction. Thus, the transaction will not result in a
dilution of the pecuniary interests of shareholders of either Fund. However, the
transaction will reduce the percentage ownership of each Fund's shareholders
below such shareholder's current percentage of ownership in either Fund.
All assets, rights, privileges, powers and franchises of Special Money
Fund, and all debts due on whatever account to it, shall be taken and deemed
to be transferred to and vested in MoneyMart without further act or deed, and
all such assets, rights, privileges, powers and franchises, and all and every
other interest of Special Money Fund, shall be thereafter effectively the
property of MoneyMart as they were of Special Money Fund. MoneyMart generally
will be responsible for all of the liabilities and obligations of Special
Money Fund. The value of the assets and liabilities of Special Money Fund
will be determined at the Effective Time, using the valuation procedures set
forth in the Prospectus and Statement of Additional Information for Special
Money Fund. The net asset value of a share
16
<Page>
of MoneyMart will be determined as of the same time using the valuation
procedures set forth in its Prospectus and Statement of Additional
Information.
Any transfer taxes payable upon issuance of shares of MoneyMart in a name
other than that of the registered holder of the shares on the books of Special
Money Fund as of that time, will be payable by the person to whom such shares
are to be issued as a condition of such transfer.
The completion of the transaction is subject to a number of conditions set
forth in the Plan. In addition, the Plan may be amended, except that no
amendment that may have a materially adverse effect on the shareholders'
interests may be made subsequent to the Meeting.
REASONS FOR THE TRANSACTION
The Board of Directors of Special Money Fund has determined that the
transaction is in the best interests of the shareholders of Special Money Fund
and that the transaction will not result in a dilution of the pecuniary
interests of shareholders of Special Money Fund.
In considering the transaction, the Board considered a number of factors
that it believes benefits the shareholders of Special Money Fund. The Board
considered that, following the transaction, the shareholders of Special Money
Fund will remain invested in a money market mutual fund which has a similar
investment objective, policies and restrictions, and similar investment
techniques. The Board also considered the fact that the performance histories of
the two Funds are substantially similar.
The Board also considered that the proposed transaction is expected to
benefit shareholders of Special Money Fund because the expense ratios of
MoneyMart are expected to be lower than those of Special Money Fund, even after
considering the effect of the Wachovia redemptions. The Board considered that
the exchange of shares pursuant to the transaction will not result in taxable
gain or loss for U.S. federal income tax purposes for its shareholders. The
Board also considered the fact that the Funds have identical or similar policies
with respect to purchases, redemptions, exchanges and distributions.
The Board of Directors of MoneyMart has also determined that the
transaction is in the best interests of shareholders of MoneyMart and that the
transaction will not result in a dilution of the pecuniary interests of
shareholders of MoneyMart.
PI recommended the transaction to the Board of each Fund at meetings held
on November 18, 2003. In recommending the transaction, PI advised the Boards
that the Funds have similar investment objectives, policies and investment
portfolios. PI also noted that, because of the Wachovia redemptions, it did not
believe that it would be viable to continue to offer all of the Money Market
Mutual Funds currently part of the JennisonDryden Mutual Funds or Strategic
Partners Funds complex.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
MoneyMart was organized under the laws of Maryland on December 22, 1975 as
a corporation. MoneyMart is registered with the United States Securities and
Exchange Commission as an open-end management investment company.
The Articles of Incorporation of MoneyMart authorize MoneyMart to issue a
total of 20 billion shares. The shares of MoneyMart are currently divided into
four classes, designated as Class A, Class B, Class C, and Class Z. Each class
of common stock represents an interest in the same assets of MoneyMart and is
identical in all respects except that:
- Class A is subject to different expenses than Class B, Class C or Class
Z, which may affect performance;
- each class has exclusive voting rights on any matter submitted to
shareholders that relates solely to its arrangement and has separate
voting rights on any matter submitted to shareholders in which the
interests of that class differ from the interests of any other class;
17
<Page>
- each class has a different exchange privilege; and
- Class Z shares are offered exclusively for sale to a limited group of
investors.
Shares of MoneyMart, when issued and paid for are fully paid and
nonassessable. The voting and dividend rights, the right of redemption and the
privilege of exchange are described in MoneyMart's Prospectus and Statement of
Additional Information.
MoneyMart does not intend to hold annual meetings of shareholders. There
will normally be no meetings of shareholders for the purpose of electing
Directors unless, pursuant to the Investment Company Act, less than a majority
of the Directors holding office have been elected by shareholders, at which time
the Directors then in office will call a shareholder meeting for the election of
Directors. Shareholders of record of two-thirds of the outstanding shares of
MoneyMart may remove a Director by declaration in writing filed with the Fund's
secretary or by votes cast in person or by proxy at a meeting called for that
purpose. The Directors are required to call a meeting of shareholders for the
purpose of voting upon the question of removal of any Director, or to transact
any other business, when the secretary has received a request in writing signed
by the shareholders of record holding not less than 10% of MoneyMart's
outstanding shares, and such request shall state the purpose of the proposed
meeting.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The transaction is intended to qualify for U.S. federal income tax purposes
as a reorganization under the Internal Revenue Code of 1986, as amended (the
Code). Special Money Fund will receive an opinion from Sullivan & Cromwell LLP,
counsel to Special Money Fund, substantially to the effect that:
1. The acquisition by MoneyMart of the assets of Special Money Fund in
exchange solely for voting shares of MoneyMart and the assumption by
MoneyMart of the liabilities of Special Money Fund, if any, followed
by the liquidating distribution of the MoneyMart shares acquired by
Special Money Fund pro rata to its shareholders, will constitute a
"reorganization" within the meaning of Section 368(a)(1) of the Code,
and Special Money Fund and MoneyMart each will be "a party to a
reorganization" within the meaning of Section 368(b) of the Code;
2. The shareholders of Special Money Fund will not recognize gain or loss
upon the exchange of all of their shares of Special Money Fund solely
for shares of MoneyMart, as described above and in the Agreement;
3. No gain or loss will be recognized by Special Money Fund upon the
transfer of its assets to MoneyMart in exchange solely for Class A,
Class B, Class C and Class Z shares of MoneyMart and the assumption by
MoneyMart of the liabilities of Special Money Fund, if any. In
addition, no gain or loss will be recognized by Special Money Fund on
the liquidating distribution of such shares to the shareholders of
Special Money Fund;
4. No gain or loss will be recognized by MoneyMart upon the acquisition
of the assets of Special Money Fund in exchange solely for shares of
MoneyMart and the assumption of the liabilities of Special Money Fund,
if any;
5. MoneyMart's tax basis for the assets acquired from Special Money Fund
will be the same as the tax basis of these assets when held by Special
Money Fund immediately before the transfer, and the holding period of
such assets acquired by MoneyMart will include the holding period of
these assets when held by Special Money Fund;
6. Special Money Fund's shareholders' tax basis for the shares of
MoneyMart to be received by them pursuant to the reorganization will
be the same as their tax basis in Special Money Fund shares exchanged
therefor; and
7. The holding period of MoneyMart shares to be received by the
shareholders of Special Money Fund will include the holding period of
their Special Money Fund shares exchanged provided such Special Money
Fund shares were held as capital assets on the date of the exchange.
18
<Page>
An opinion of counsel does not have the effect of a private letter
ruling from the Internal Revenue Service (the "IRS") and is not binding on
the IRS or any court. If the transaction is consummated but fails to qualify
as a "reorganization" within the meaning of section 368 of the Code, the
transaction would be treated as a taxable sale of assets by Special Money
Fund to MoneyMart followed by a taxable liquidation of Special Money Fund,
and the shareholders of Special Money Fund would recognize a taxable gain or
tax loss equal to the difference between their adjusted tax basis in the
shares of Special Money Fund and the fair market value of the shares of
MoneyMart received in exchange therefor.
Shareholders of Special Money Fund should consult their tax advisers
regarding the tax consequences to them of the transaction in light of their
individual circumstances. In addition, because the foregoing discussion relates
only to the U.S. federal income tax consequences of the transaction,
shareholders also should consult their tax advisers as to state, local and
foreign tax consequences to them, if any, of the transaction.
CONCLUSION
The Plan was approved by the Boards of Directors of Special Money Fund
and MoneyMart, at meetings held on November 18, 2003. The Boards determined
that the transaction is in the best interests of shareholders of their
respective Funds and that the interests of existing shareholders of Special
Money Fund and MoneyMart, as the case may be, would not be diluted as a
result of the transaction. If the shareholders of Special Money Fund do not
approve the transaction, or if the transaction is not completed, Special
Money Fund will continue to engage in business as a registered investment
company and the Board of Directors of Special Money Fund will consider other
proposals for Special Money Fund, including proposals for the reorganization
or liquidation of the Fund.
ADDITIONAL INFORMATION ABOUT MONEYMART
MoneyMart's Prospectus, dated February 27, 2004, is enclosed with this
Proxy Statement and is incorporated into this Proxy Statement by reference. The
Prospectus contains additional information about MoneyMart, including its
investment objective and policies, manager, investment adviser, advisory fees
and expenses, organization and procedures for purchasing and redeeming shares.
The Prospectus also contains MoneyMart's financial highlights for the fiscal
period ended December 31, 2003, which are incorporated into this Proxy Statement
by reference. The audited financial statements of MoneyMart are included in
MoneyMart's Annual Report dated December 31, 2003, which is also enclosed with
this Proxy Statement.
MISCELLANEOUS
LEGAL MATTERS
The validity of shares of MoneyMart to be issued pursuant to the Plan will
be passed upon by Piper Rudnick LLP, Maryland counsel to MoneyMart.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audited financial statements of Special Money Fund and MoneyMart,
incorporated by reference into the Statement of Additional Information, have
been audited by PricewaterhouseCoopers LLP, independent registered public
accounting firm, whose reports thereon are included in the Annual Reports to
Shareholders for the fiscal year ended June 30, 2003 for Special Money Fund,
and for the fiscal year ended December 31, 2003 for MoneyMart. These
financial statements have been so incorporated by reference in reliance on
the reports of "PricewaterhouseCoopers LLP" given on the authority of said
firm as experts in auditing and accounting.
AVAILABLE INFORMATION
Special Money Fund and MoneyMart are each subject to the 1940 Act and in
accordance with these laws, they each file reports, proxy material and other
information with the Commission. Such reports, proxy and information
statements, proxy material and other information can be inspected and copied
at the Public Reference Room in
19
<Page>
Washington D.C. Information on the operation of the Public Reference Room may
be obtained by calling the Commission at 1-202-942-8090. Reports and other
information about the Funds are available on the EDGAR Database on the
Commission's Internet site at http://www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: publicinfo@sec.gov, or by writing to
the Commission's Public Reference Section, Washington, D.C. 20549-0102.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise Special Money Fund, care of Prudential Investment Management
Services LLC, Gateway Center Three, 100 Mulberry Street, 14th Floor, Newark, New
Jersey 07102, whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of this Proxy
Statement you wish to receive in order to supply copies to the beneficial owners
of the shares.
SHAREHOLDER PROPOSALS
Neither Special Money Fund nor MoneyMart is required to hold regular annual
meetings and, in order to minimize costs, do not intend to hold meetings of
shareholders unless so required by applicable law, regulatory policy or if
otherwise deemed advisable by its Board of Directors. Therefore, it is not
practicable to specify a date by which shareholder proposals must be received in
order to be incorporated in an upcoming proxy statement for an annual meeting.
If the proposal is approved at the Meeting, there will likely not be any future
shareholder meetings of Special Money Fund.
Any shareholder who wishes to submit a proposal to be considered at a
Fund's next meeting of shareholders should send the proposal to that Fund at
Gateway Center Three, 100 Mulberry Street, 4th Floor, Newark, New Jersey
07102, so as to be received within a reasonable time before the Board makes
the solicitation relating to such meeting, in order to be included in the
proxy statement and form of proxy relating to such meeting 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 Fund's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
It is the present intention of the Board of Directors of MoneyMart not to
hold annual meetings of shareholders unless required to do so by the 1940 Act.
OTHER BUSINESS
Management of Special Money Fund knows of no business to be presented at
the Meeting other than the proposal described in this Proxy Statement. However,
if any other matter requiring a shareholder vote should be properly brought
before the Meeting, the proxies will vote according to their best judgment in
the interest of Special Money Fund, taking into account all relevant
circumstances.
By order of the Board of Directors of
Special Money Fund
/s/ Jonathan D. Shain
JONATHAN D. SHAIN
SECRETARY
June 23, 2004
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
20
<Page>
ATTACHMENT A
AGREEMENT AND PLAN OF REORGANIZATION
Agreement and Plan of Reorganization (Agreement) made as of the ____th day
of ______, 2004 by and between Special Money Market Fund, Inc. (Acquired Fund)
and MoneyMart Assets, Inc. (Acquiring Fund) (Acquired Fund and Acquiring Fund,
collectively, are referred to as the Funds and each individually, a Fund).
Acquired Fund and Acquiring Fund are both corporations organized under the laws
of the State of Maryland. Acquired Fund and Acquiring Fund each maintains its
principal place of business at Gateway Center Three, 100 Mulberry Street,
Newark, New Jersey 07102-4077. Shares of each Fund are divided into four
classes, designated Class A, Class B, Class C and Class Z, and the Acquired Fund
has a fifth class, designated Class B/C.
This Agreement is intended to be, and is adopted as, a plan of
reorganization pursuant to Section 368 of the Internal Revenue Code of 1986, as
amended (Internal Revenue Code). Upon receipt of such representations from each
of the Funds as Sullivan & Cromwell LLP may require, Sullivan & Cromwell LLP
will deliver the opinion referenced in paragraph 8.6 herein. The reorganization
will comprise the transfer of all of the assets of Acquired Fund, in exchange
solely for shares of common stock of Acquiring Fund, and Acquiring Fund's
assumption of Acquired Fund's liabilities, if any, and the constructive
distribution, after the Closing Date hereinafter referred to, of such shares of
Acquiring Fund to the shareholders of Acquired Fund, in termination of Acquired
Fund as provided herein, all upon the terms and conditions as hereinafter set
forth.
In consideration of the premises and of the covenants and agreements set
forth herein, the parties covenant and agree as follows:
1. TRANSFER OF ASSETS OF ACQUIRED FUND IN EXCHANGE FOR SHARES OF
ACQUIRING FUND AND ASSUMPTION OF LIABILITIES, IF ANY, AND TERMINATION OF
ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, Acquired Fund
agrees to sell, assign, transfer and deliver its assets, as set forth in
paragraph 1.2, to Acquiring Fund, and Acquiring Fund agrees (a) (i) to issue and
deliver to Acquired Fund in exchange therefor the number of shares in Acquiring
Fund determined by dividing the net asset value of Acquired Fund allocable to
Class A, Class B, Class C and Class Z shares of Acquired Fund's common stock
(computed in the manner and as of the time and date set forth in paragraph 2.1)
by the net asset value allocable to a Class A, Class B, Class C and Class Z
share, respectively, of Acquiring Fund (rounded to the third decimal place)
(computed in the manner and as of the time and date set forth in paragraph 2.2);
(ii) to issue and deliver to Acquired Fund in exchange therefor the number of
Class B shares in Acquiring Fund determined by dividing the net asset value of
Class B/C shares of Acquired Fund attributable to shareholders who were formerly
Class B shareholders prior to exchanging into Class B/C of the Acquired Fund
(computed in the manner and as of the time and date set forth in paragraph 2.1)
by the net asset value allocable to a Class B share of Acquiring Fund (rounded
to the third decimal place) (computed in a manner and as of the time and date
set forth in paragraph 2.2.); and (iii) to issue and deliver to Acquired Fund in
exchange therefor the number of Class C shares in Acquiring Fund determined by
dividing the net asset value of Class B/C shares of Acquired Fund attributable
to shareholders who were formerly Class C shareholders prior to exchanging into
Class B/C of the Acquired Fund (computed in the manner and as of the time and
date set forth in paragraph 2.1) by the net asset value allocable to a Class C
share of Acquiring Fund (rounded to the third decimal place) (computed in a
manner and as of the time and date set forth in paragraph 2.2.); and (b) to
assume all of Acquired Fund's liabilities, if any, as set forth in paragraph
1.3. Such transactions shall take place at the closing provided for in paragraph
3 (Closing).
1.2 The assets of Acquired Fund to be acquired by Acquiring Fund shall
include without limitation all cash, cash equivalents, securities, receivables
(including interest and dividends receivable) and other property of any kind
owned by Acquired Fund and any deferred or prepaid expenses shown as assets on
the books of Acquired Fund on the closing date provided in paragraph 3 (Closing
Date). Acquiring Fund has no plan or intent to sell or otherwise dispose of any
assets of Acquired Fund, other than in the ordinary course of business.
A-1
<Page>
1.3 Except as otherwise provided herein, Acquiring Fund will assume
from Acquired Fund all debts, liabilities, obligations and duties of Acquired
Fund of whatever kind or nature, whether absolute, accrued, contingent or
otherwise, whether or not determinable as of the Closing Date and whether or not
specifically referred to in this Agreement; provided, however, that Acquired
Fund agrees to utilize its best efforts to discharge all of its known debts,
liabilities, obligations and duties prior to the Closing Date.
1.4 On or immediately prior to the Closing Date, Acquired Fund will
declare and pay to its shareholders of record dividends and/or other
distributions so that it will have distributed substantially all (and in any
event not less than ninety-eight percent) of its investment company taxable
income (computed without regard to any deduction for dividends paid), and
realized net capital gains, if any, for all taxable years through the Closing
Date so as to retain its qualification as a regulated investment company
pursuant to Section 851 of the Internal Revenue Code.
1.5 On the Closing Date or as soon thereafter as is conveniently
practicable, Acquired Fund will distribute PRO RATA to its Class A, Class B,
Class C, Class B/C and Class Z shareholders of record, determined as of the
close of business on the Closing Date, the Class A, Class B, Class C and Class Z
shares, as applicable, of Acquiring Fund received by Acquired Fund pursuant to
paragraph 1.1 in exchange for their interest in Acquired Fund. Such distribution
will be accomplished by opening accounts on the books of Acquiring Fund in the
names of Acquired Fund shareholders and transferring thereto the shares credited
to the account of Acquired Fund on the books of Acquiring Fund. Each account
opened shall be credited with the PRO RATA number of Acquiring Fund Class A,
Class B, Class C and Class Z shares due Acquired Fund's Class A, Class B, Class
C, Class B/C and Class Z shareholders, as applicable. Fractional shares of
Acquiring Fund shall be rounded to the third decimal place. All issued and
outstanding shares of Acquired Fund will simultaneously be cancelled on the
books of Acquired Fund. On or about the Closing Date, if appropriate, Acquired
Fund will file Articles of Transfer with the State Department of Assessments and
Taxation of the State of Maryland. As soon as practicable after the receipt of
an order from the Securities and Exchange Commission (SEC) indicating acceptance
of the Form N-8F that Acquired Fund must file pursuant to the Investment Company
Act of 1940, as amended (Investment Company Act) to deregister as an investment
company, Acquired Fund will file with the State of Maryland such documents as
may be required to dissolve and terminate its corporate existence, but in any
event such dissolution will be completed within twelve months following the
Closing Date (the Termination Date).
1.6 Acquiring Fund shall not issue certificates representing its shares
in connection with such exchange. With respect to any Acquired Fund shareholder
holding Acquired Fund share certificates as of the Closing Date, until Acquiring
Fund is notified by Acquired Fund's transfer agent that such shareholder has
surrendered his or her outstanding Acquired Fund share certificates or, in the
event of lost, stolen or destroyed share certificates, posted adequate bond or
submitted a lost certificate form, as the case may be, Acquiring Fund will not
permit such shareholder to (1) receive dividends or other distributions on
Acquiring Fund shares in cash (although such dividends and distributions shall
be credited to the account of such shareholder established on Acquiring Fund's
books pursuant to paragraph 1.5, as provided in the next sentence), (2) exchange
Acquiring Fund shares credited to such shareholder's account for shares of other
Prudential Mutual Funds, or (3) pledge or redeem such shares. In the event that
a shareholder is not permitted to receive dividends or other distributions on
Acquiring Fund shares in cash as provided in the preceding sentence, Acquiring
Fund shall pay such dividends or other distributions in additional Acquiring
Fund shares, notwithstanding any election such shareholder shall have made
previously with respect to the payment of dividends or other distributions on
shares of Acquired Fund. Acquired Fund will, at its expense, request its
shareholders to surrender their outstanding Acquired Fund share certificates,
post adequate bond or submit a lost certificate form, as the case may be.
1.7 Ownership of Acquiring Fund shares will be shown on the books of
Acquiring Fund's transfer agent. Shares of Acquiring Fund will be issued in the
manner described in Acquiring Fund's Charter and Acquiring Fund's then-current
prospectus and statement of additional information.
1.8 Any transfer taxes payable upon issuance of shares of Acquiring
Fund in a name other than the registered holder of the shares being exchanged on
the books of Acquired Fund as of that time shall be paid by the person to whom
such shares are to be issued as a condition to the registration of such
transfer.
A-2
<Page>
1.9 Any reporting responsibility with the SEC or any state securities
commission of Acquired Fund is, and shall remain, the responsibility of Acquired
Fund up to and including the Termination Date.
1.10 All books and records of Acquired Fund, including all books and
records required to be maintained under the Investment Company Act and the rules
and regulations thereunder, shall be available to Acquiring Fund from and after
the Closing Date and shall be turned over to Acquiring Fund on or prior to the
Termination Date.
2. VALUATION
2.1 The value of Acquired Fund's assets and liabilities to be acquired
and assumed, respectively, by Acquiring Fund shall be the net asset value
computed as of the close of regular trading on the New York Stock Exchange
(generally, 4:00 p.m., New York time, on the Closing Date (such time and date
being hereinafter called the Valuation Time), using the valuation procedures set
forth in Acquired Fund's then-current Charter, prospectus and statement of
additional information.
2.2 The net asset value of Class A, Class B, Class C and Class Z shares
of Acquiring Fund shall be the net asset value for Class A, Class B, Class C and
Class Z shares computed as of the Valuation Time, using the valuation procedures
set forth in Acquiring Fund's then-current prospectus and statement of
additional information, and the Acquiring Fund's then-current Charter.
2.3 The number of Acquiring Fund shares to be issued (including
fractional shares, if any) in exchange for Acquired Fund's net assets shall be
calculated as set forth in paragraph 1.1.
2.4 All computations of net asset value shall be made by or under the
direction of Prudential Investments LLC (PI) in accordance with its regular
practice as manager of the Funds and pursuant to the applicable Charter.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be or such later date as the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously as of the close of business on the Closing Date unless
otherwise provided. The Closing shall be at the office of the Acquiring Fund or
at such other place as the parties may agree.
3.2 State Street Bank and Trust Company (State Street), as custodian
for Acquired Fund, shall deliver to Acquiring Fund at the Closing a certificate
of an authorized officer of State Street stating that (a) Acquired Fund's
portfolio securities, cash and any other assets have been transferred in proper
form to Acquiring Fund on the Closing Date and (b) all necessary taxes, if any,
have been paid, or provision for payment has been made, in conjunction with the
transfer of portfolio securities.
3.3 In the event that immediately prior to the Valuation Time (a) the
New York Stock Exchange (NYSE) or other primary exchange is closed to trading or
trading thereon is restricted or (b) trading or the reporting of trading on the
NYSE or other primary exchange or elsewhere is disrupted so that accurate
appraisal of the value of the net assets of Acquired Fund and of the net asset
value per share of Acquiring Fund is impracticable, the Closing Date shall be
postponed until the first business day after the date when such trading shall
have been fully resumed and such reporting shall have been restored.
3.4 Acquired Fund shall deliver to Acquiring Fund on the Closing Date
or as soon thereafter as is conveniently practicable the names and addresses of
its shareholders and the number of outstanding shares owned by each such
shareholder, all as of the close of business on the Closing Date, certified by
the Transfer Agent of Acquired Fund. Acquiring Fund shall issue and deliver to
Acquired Fund at the Closing a confirmation or other evidence satisfactory to
Acquired Fund that shares of Acquiring Fund have been or will be credited to
Acquired Fund's account on the books of the Acquiring Fund. At the Closing each
party shall deliver to the other such bills of sale, checks, assignments, share
certificates, receipts and other documents as such other party or its counsel
may reasonably request to effect the transactions contemplated by this
Agreement.
A-3
<Page>
4. REPRESENTATIONS AND WARRANTIES
4.1 Acquired Fund represents and warrants as follows:
4.1.1 Acquired Fund is a corporation duly organized and validly existing
under the laws of the State of Maryland with the power to own all of its
properties and assets and to carry on its business as it is now being conducted;
4.1.2 Acquired Fund is an open-end management investment company duly
registered under the Investment Company Act, and such registration is in full
force and effect;
4.1.3 Acquired Fund is not, and the execution, delivery and performance
of this Agreement will not result, in violation of any provision of the Charter
or By-Laws of Acquired Fund or of any material agreement, indenture, instrument,
contract, lease or other undertaking to which Acquired Fund is a party or by
which Acquired Fund is bound;
4.1.4 All material contracts or other commitments to which Acquired Fund,
or the properties or assets of Acquired Fund, is subject, or by which Acquired
Fund is bound, except this Agreement, will be terminated on or prior to the
Closing Date without Acquired Fund or Acquiring Fund incurring any liability or
penalty with respect thereto;
4.1.5 No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against Acquired Fund or any of its properties or
assets. Acquired Fund knows of no facts that might form the basis for the
institution of such proceedings, and Acquired Fund is not a party to or subject
to the provisions of any order, decree or judgment of any court or governmental
body that materially and adversely affects its business or its ability to
consummate the transactions herein contemplated;
4.1.6 The Portfolio of Investments, Statement of Assets and
Liabilities, Statement of Operations, Statement of Cash Flows, Statement of
Changes in Net Assets, and Financial Highlights of Acquired Fund at June 30,
2003 and for the year then ended (copies of which have been furnished to
Acquiring Fund) have been audited by PricewaterhouseCoopers LLP, independent
registered public accounting firm, in accordance with generally accepted
auditing standards. Such financial statements are prepared in accordance with
generally accepted accounting principles and present fairly, in all material
respects, the financial condition, results of operations, cash flows, changes
in net assets and financial highlights of Acquired Fund as of and for the
period ended on such date, and there are no material known liabilities of
Acquired Fund (contingent or otherwise) not disclosed therein;
4.1.7 Since June 30, 2003, there has not been any material adverse change
in Acquired Fund's financial condition, assets, liabilities or business other
than changes occurring in the ordinary course of business, or any incurrence by
Acquired Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by
Acquiring Fund. For the purposes of this paragraph 4.1.7, a decline in net asset
value, net asset value per share or change in the number of shares outstanding
shall not constitute a material adverse change;
4.1.8 At the date hereof and at the Closing Date, all federal and other
tax returns and reports of Acquired Fund required by law to have been filed on
or before such dates shall have been timely filed, and all federal and other
taxes shown as due on said returns and reports shall have been paid insofar as
due, or provision shall have been made for the payment thereof, and, to the best
of Acquired Fund's knowledge, all federal or other taxes required to be shown on
any such return or report have been shown on such return or report, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
4.1.9 For each past taxable year since it commenced operations, Acquired
Fund has met the requirements of Subchapter M of the Internal Revenue Code for
qualification and treatment as a regulated investment company and intends to
meet those requirements for the current taxable year; and, for each past
calendar year since it commenced operations, Acquired Fund has made such
distributions as are necessary to avoid the imposition of federal excise tax or
has paid or provided for the payment of any excise tax imposed;
A-4
<Page>
4.1.10 All issued and outstanding shares of Acquired Fund are, and at the
Closing Date will be, duly and validly authorized, issued and outstanding, fully
paid and non-assessable. All issued and outstanding shares of Acquired Fund
will, at the time of the Closing, be held in the name of the persons and in the
amounts set forth in the list of shareholders submitted to Acquiring Fund in
accordance with the provisions of paragraph 3.4. Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any of its shares, nor is there outstanding any security convertible into any of
its shares;
4.1.11 At the Closing Date, Acquired Fund will have good and marketable
title to its assets to be transferred to Acquiring Fund pursuant to paragraph
1.1, and full right, power and authority to sell, assign, transfer and deliver
such assets hereunder free of any liens, claims, charges or other encumbrances,
and, upon delivery and payment for such assets, Acquiring Fund will acquire good
and marketable title thereto;
4.1.12 The execution, delivery and performance of this Agreement have been
duly authorized by the Board of Directors of Acquired Fund and by all necessary
corporate action, other than shareholder approval, on the part of Acquired Fund,
and subject to shareholder approval, this Agreement constitutes a valid and
binding obligation of Acquired Fund, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
4.1.13 The information furnished and to be furnished by Acquired Fund for
use in applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the transactions
contemplated hereby is and shall be accurate and complete in all material
respects and is in compliance and shall comply in all material respects with
applicable federal securities and other laws and regulations; and
4.1.14 On the effective date of the registration statement filed with the
SEC by Acquiring Fund on Form N-14 relating to the shares of Acquiring Fund
issuable thereunder, and any supplement or amendment thereto (Registration
Statement), at the time of the meeting of the shareholders of Acquired Fund and
on the Closing Date, the Proxy Statement of Acquired Fund, the Prospectus of
Acquiring Fund and the Statements of Additional Information of both Funds to be
included in the Registration Statement (collectively, Proxy Statement) (i) will
comply in all material respects with the applicable provisions and regulations
of the Securities Act of 1933, as amended (1933 Act), the Securities Exchange
Act of 1934 (1934 Act) and the Investment Company Act and (ii) will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, in light of the circumstances under which they
were made, or necessary to make the statements therein not misleading; provided,
however, that the representations and warranties in this paragraph 4.1.14 shall
not apply to statements in or omissions from the Proxy Statement and
Registration Statement made in reliance upon and in conformity with information
furnished by Acquiring Fund for use therein.
4.2 Acquiring Fund represents and warrants as follows:
4.2.1 Acquiring Fund is a corporation duly organized and validly existing
under the laws of the State of Maryland with the power to own all of its
properties and assets and to carry on its business as it is now being conducted;
4.2.2 Acquiring Fund is an open-end management investment company duly
registered under the Investment Company Act, and such registration, and the
registration of its shares under the 1933 Act, is in full force and effect;
4.2.3 Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not result, in violation of any provision of the Charter
or By-Laws of Acquiring Fund or of any material agreement, indenture,
instrument, contract, lease or other undertaking to which Acquiring Fund is a
party or by which Acquiring Fund is bound;
4.2.4 No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against Acquiring Fund or any of its properties
or assets, except as previously disclosed in writing to Acquired Fund. Acquiring
Fund knows of no facts that might form the basis for the institution of such
proceedings, and Acquiring Fund is not a party to or subject to
A-5
<Page>
the provisions of any order, decree or judgment of any court or governmental
body that materially and adversely affects its business or its ability to
consummate the transactions herein contemplated;
4.2.5 The Portfolio of Investments, Statement of Assets and Liabilities,
Statement of Operations, Statement of Cash Flows, Statement of Changes in Net
Assets, and Financial Highlights of Acquiring Fund at December 31, 2003 (copies
of which have been furnished to Acquired Fund) have been audited by
PricewaterhouseCoopers LLP, independent auditors, in accordance with generally
accepted auditing standards. Such financial statements are prepared in
accordance with generally accepted accounting principles and present fairly, in
all material respects, the financial position, results of operations, cash
flows, changes in net assets and financial highlights of Acquiring Fund as of
and for the period ended on such date, and there are no known material
liabilities of Acquiring Fund (contingent or otherwise) not disclosed therein;
4.2.6 Since December 31, 2003, there has not been any material adverse
change in Acquiring Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by Acquiring Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as otherwise disclosed to and
accepted by Acquired Fund. For the purposes of this paragraph, a decline in net
asset value, net asset value per share or a decrease in the number of shares
outstanding shall not constitute a material adverse change;
4.2.7 At the date hereof and at the Closing Date, all federal and other
tax returns and reports of Acquiring Fund required by law to have been filed on
or before such dates shall have been filed, and all federal and other taxes
shown as due on said returns and reports shall have been paid insofar as due, or
provision shall have been made for the payment thereof, and, to the best of
Acquiring Fund's knowledge, all federal or other taxes required to be shown on
any such return or report are shown on such return or report, no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
4.2.8 For each past taxable year since it commenced operations, Acquiring
Fund have met the requirements of Subchapter M of the Internal Revenue Code for
qualification and treatment as a regulated investment company and intends to
meet those requirements for the current taxable year; and, for each past
calendar year since it commenced operations, Acquiring Fund has made such
distributions as are necessary to avoid the imposition of federal excise tax or
has paid or provided for the payment of any excise tax imposed;
4.2.9 All issued and outstanding shares of Acquiring Fund are, and at the
Closing Date will be, duly and validly authorized, issued and outstanding, fully
paid and non-assessable. Except as contemplated by this Agreement, Acquiring
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares nor is there outstanding any
security convertible into any of its shares;
4.2.10 The execution, delivery and performance of this Agreement have been
duly authorized by the Board of Directors of Acquiring Fund and by all necessary
corporate action on the part of Acquiring Fund, and this Agreement constitutes a
valid and binding obligation of Acquiring Fund, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
4.2.11 The shares of Acquiring Fund to be issued and delivered to Acquired
Fund pursuant to this Agreement will, at the Closing Date, have been duly
authorized and, when issued and delivered as provided in this Agreement, will be
duly and validly issued and outstanding shares of Acquiring Fund, fully paid and
non-assessable;
4.2.12 The information furnished and to be furnished by Acquiring Fund for
use in applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby is and shall be accurate and complete in all material
respects and is and shall comply in all material respects with applicable
federal securities and other laws and regulations; and
4.2.13 On the effective date of the Registration Statement, at the time of
the meeting of the shareholders of Acquired Fund and on the Closing Date, the
Proxy Statement and the Registration Statement (i) will comply in all material
respects with the applicable provisions and regulations of the 1933 Act, the
1934 Act and the Investment Company Act, (ii) with respect to the Registration
Statement, at the time it becomes effective, will not contain any
A-6
<Page>
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein not misleading
and (iii) it will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this paragraph 4.2.13 shall not apply
to statements in or omissions from the Proxy Statement and the Registration
Statement made in reliance upon and in conformity with information furnished by
Acquired Fund for use therein.
5. COVENANTS OF ACQUIRED FUND AND ACQUIRING FUND
5.1 Acquired Fund and Acquiring Fund each covenants to operate its
respective business in the ordinary course between the date hereof and the
Closing Date, it being understood that the ordinary course of business will
include declaring and paying customary dividends and other distributions and
such changes in operations as are contemplated by the normal operations of the
Funds, except as may otherwise be required by paragraph 1.3, 1.4 or 4.1.4
hereof.
5.2 Acquired Fund covenants to call a shareholders' meeting to consider
and act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated hereby (including the determinations
of its Board of Directors as set forth in Rule 17a-8(a) under the Investment
Company Act).
5.3 Acquired Fund covenants that Acquiring Fund shares to be received
by Acquired Fund in accordance herewith are not being acquired for the purpose
of making any distribution thereof other than in accordance with the terms of
this Agreement.
5.4 Acquired Fund covenants that it will assist Acquiring Fund in
obtaining such information as Acquired Fund reasonably requests concerning the
beneficial ownership of Acquired Fund's shares.
5.5 Subject to the provisions of this Agreement, each Fund will take,
or cause to be taken, all action, and will do, or cause to be done, all things
reasonably necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
5.6 Acquired Fund covenants to prepare the Proxy Statement in
compliance with the 1934 Act, the Investment Company Act and the rules and
regulations under each such Act.
5.7 Acquired Fund covenants that it will, from time to time, as and
when requested by Acquiring Fund, execute and deliver or cause to be executed
and delivered all such assignments and other instruments, and will take or cause
to be taken such further action, as Acquiring Fund may deem necessary or
desirable in order to vest in and confirm to Acquiring Fund title to and
possession of all the assets of Acquired Fund to be sold, assigned, transferred
and delivered hereunder and otherwise to carry out the intent and purpose of
this Agreement.
5.8 As soon as is reasonably practicable after the Closing Date,
Acquired Fund will make a distribution to its shareholders consisting of the
shares of Acquiring Fund received at the Closing.
5.9 Acquiring Fund covenants to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the Investment
Company Act (including the determinations of Acquiring Fund's Board of Directors
as set forth in Rule 17a-8(a) thereunder) and such of the state Blue Sky or
securities laws as it may deem appropriate in order to continue its operations
after the Closing Date.
5.10 Acquiring Fund covenants that it will, from time to time, as and
when requested by Acquired Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take and cause to
be taken such further action, as Acquired Fund may deem necessary or desirable
in order to (i) vest in and confirm to Acquired Fund title to and possession of
all the shares of Acquiring Fund to be transferred to Acquired Fund pursuant to
this Agreement and (ii) assume all of Acquired Fund's liabilities in accordance
with this Agreement.
A-7
<Page>
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED FUND
The obligations of Acquired Fund to consummate the transactions provided
for herein shall be subject to the performance by Acquiring Fund of all the
obligations to be performed by it hereunder on or before the Closing Date and
the following further conditions:
6.1 All representations and warranties of Acquiring Fund contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date.
6.2 Acquiring Fund shall have delivered to Acquired Fund on the Closing
Date a certificate executed in the Acquiring Fund's name by its President or a
Vice President in form and substance satisfactory to Acquired Fund and dated as
of the Closing Date, to the effect that the representations and warranties of
Acquiring Fund in this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as Acquired Fund shall reasonably
request.
6.3 Acquired Fund shall have received on the Closing Date a favorable
opinion from Piper Rudnick LLP, counsel to Acquiring Fund, dated as of the
Closing Date, to the effect that:
6.3.1 Acquiring Fund is duly incorporated and is an existing corporation
in good standing under the laws of the State of Maryland, with power under its
Charter to own all of its properties and assets and, to the knowledge of such
counsel, to carry on its business as a registered investment company;
6.3.2 This Agreement has been duly authorized, executed and delivered by
an authorized officer of Acquiring Fund and, assuming due authorization,
execution and delivery by Acquired Fund, is a valid and binding obligation of
Acquiring Fund enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles;
6.3.3 When the shares of Acquiring Fund to be distributed to Acquired
Fund shareholders under this Agreement are issued and sold as contemplated by
this Agreement for the consideration stated in this Agreement, which shall in
each event be at least equal to the net asset value and par value per share,
they will be validly issued, fully paid and non-assessable by Acquiring Fund,
and no shareholder of Acquiring Fund has any pre-emptive right under Maryland
law to subscribe for or purchase such shares;
6.3.4 The execution and delivery by Acquiring Fund of this Agreement did
not, and the consummation of the transactions contemplated hereby will not, (i)
conflict with Acquiring Fund's Charter or By-Laws or (ii) result in a default or
a breach of, (a) the Management Agreement for Acquiring Fund dated between
Acquiring Fund and Prudential Investments LLC, (b) the Custodian Contract dated
between Acquiring Fund and State Street Bank and Trust Company, (c) the
Distribution Agreement dated between Acquiring Fund and Prudential
Investment Management Services LLC, and (d) the Transfer Agency and Service
Agreement dated between Acquiring Fund and Prudential Mutual Fund Services,
Inc.; provided, however, that such counsel may state that they express no
opinion with respect to federal or state securities laws, other antifraud laws
and fraudulent transfer laws; and provided further that insofar as performance
by Acquiring Fund of its obligations under this Agreement is concerned, such
counsel may state that they express no opinion as to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equity
principles;
6.3.5 To the knowledge of such counsel and without independent inquiry
or investigation, no consent, approval, authorization, filing or order of any
court or governmental authority is required to be obtained by Acquiring Fund
under the laws of the State of Maryland for the consummation by Acquiring
Fund of the transactions contemplated herein.
A-8
<Page>
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND
The obligations of Acquiring Fund to complete the transactions provided for
herein shall be subject to the performance by Acquired Fund of all the
obligations to be performed by it hereunder on or before the Closing Date and
the following further conditions:
7.1 All representations and warranties of Acquired Fund contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date.
7.2 Acquired Fund shall have delivered to Acquiring Fund on the Closing
Date a statement of its assets and liabilities, which statement shall be
prepared in accordance with generally accepted accounting principles
consistently applied, together with a list of its portfolio securities showing
the adjusted tax bases of such securities by lot, as of the Closing Date,
certified by the Treasurer or Assistant Treasurer of Acquired Fund.
7.3 Acquired Fund shall have delivered to Acquiring Fund on the Closing
Date a certificate executed in its name by the President or a Vice President of
Acquired Fund, in form and substance satisfactory to Acquiring Fund and dated as
of the Closing Date, to the effect that (a) the representations and warranties
of Acquired Fund made in this Agreement are true and correct at and as of the
Closing Date except as they may be affected by the transactions contemplated by
this Agreement, (b) that this Agreement was approved by the requisite
shareholder vote and (c) as to such other matters as Acquiring Fund shall
reasonably request.
7.4 On or immediately prior to the Closing Date, Acquired Fund shall
have declared and paid to its shareholders of record one or more dividends
and/or other distributions so that it will have distributed substantially all
(and in any event not less than ninety-eight percent) of Acquired Fund's
investment company taxable income (computed without regard to any deduction for
dividends paid), and realized net capital gain, if any, of Acquired Fund for all
completed taxable years from the inception of Acquired Fund through the Closing
Date.
7.5 Acquiring Fund shall have received on the Closing Date a favorable
opinion from Sullivan & Cromwell LLP, counsel to Acquired Fund, dated as of the
Closing Date, to the effect that:
7.5.1 Acquired Fund is duly incorporated and is an existing corporation
in good standing under the laws of the State of Maryland with power under its
Charter to own all of its properties and assets and, to the knowledge of such
counsel, to carry on its business as a registered investment company;
7.5.2 This Agreement has been duly authorized, executed and delivered
by Acquired Fund and, assuming due authorization, execution and delivery by
Acquiring Fund, constitutes a valid and legally binding obligation of
Acquired Fund enforceable against Acquired Fund in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
7.5.3 The execution and delivery by Acquired Fund of the Agreement did
not, and the performance by Acquired Fund of its obligations hereunder will not,
(i) violate Acquired Fund's Charter or By-Laws or (ii) result in a default under
or a breach of (a) the Management Agreement, dated , between Acquired Fund
and Prudential Investments LLC, (b) the Custodian Contract, dated , between
Acquired Fund and State Street Bank and Trust Company, (c) the Distribution
Agreement dated between Acquired Fund and Prudential Investment Management
Services LLC, and (d) the Transfer Agency and Service Agreement, dated ,
between Acquired Fund and Prudential Mutual Fund Services, Inc.; provided,
however, that such counsel may state that they express no opinion with respect
to Federal or state securities laws, other antifraud laws and fraudulent
transfer laws; provided, further, that insofar as performance by Acquired Fund
of its obligations under this Agreement is concerned, such counsel may state
that they express no opinion as to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
A-9
<Page>
7.5.4 To the knowledge of such counsel and without independent inquiry or
investigation, no consent, approval, authorization, filing or order of any court
or governmental authority is required to be obtained by Acquired Fund under the
federal laws of the United States and the laws of the State of Maryland for the
consummation of the transactions contemplated by this Agreement, except such as
have been obtained under the 1933 Act, the 1934 Act, and the Investment Company
Act, and such as may be required under state securities laws;
7.5.5 Such counsel knows of no, and has not made independent inquiry or
investigation to ascertain the existence of, litigation or governmental
proceedings instituted or threatened against Acquired Fund that is required to
be disclosed in the Registration Statement and is not so disclosed; and
7.5.6 Acquired Fund has been registered with the SEC as an investment
company, and, to the knowledge of such counsel, no order has been issued or
proceeding instituted to suspend such registration.
With respect to all matters of Maryland law, such counsel shall be entitled
to state that, with the approval of Acquiring Fund, they have relied upon the
opinion of Piper Rudnick LLP, and that their opinion is subject to the same
assumptions, qualifications and limitations with respect to such matters as are
contained in the opinion of Piper Rudnick LLP.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND AND
ACQUIRED FUND
The obligations of each Fund hereunder are subject to the further
conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of (a) each of the Board of Directors of
Acquired Fund and Acquiring Fund, as to the determinations set forth in Rule
17a-8(a) under the Investment Company Act, (b) the Board of Directors of
Acquiring Fund of the liabilities of Acquired Fund and the issuance of shares of
Acquiring Fund common stock and (c) the holders of the outstanding shares of
Acquired Fund in accordance with the provisions of the Investment Company Act
and/or Acquired Fund's Charter, and certified copies of the resolutions
evidencing such approvals shall have been delivered to Acquiring Fund and
Acquired Fund, as applicable.
8.2 Any proposed change to Acquiring Fund's operations that may be
approved by its Board of Directors subsequent to the date of this Agreement but
in connection with and as a condition to implementing the transactions
contemplated by this Agreement, for which the approval of Acquiring Fund's
shareholders is required pursuant to the Investment Company Act or otherwise,
shall have been approved by the requisite vote of the holders of the outstanding
shares of Acquiring Fund in accordance with the Investment Company Act and
Maryland law, and certified copies of the resolutions evidencing such approval
shall have been delivered to Acquired Fund.
8.3 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.4 All consents of other parties and all consents, orders and permits
of federal, state and local regulatory authorities (including those of the SEC
and of state Blue Sky or securities authorities, including "no-action" positions
of such authorities) deemed necessary by Acquiring Fund or Acquired Fund to
permit consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse effect
on the assets or properties of Acquiring Fund or Acquired Fund, provided that
either party hereto may for itself waive any part of this condition.
8.5 The Registration Statement shall have become effective under the
1933 Act, and no stop orders suspending the effectiveness thereof shall have
been issued, and to the best knowledge of the parties hereto, no investigation
or proceeding under the 1933 Act for that purpose shall have been instituted or
be pending, threatened or contemplated.
8.6 Acquired Fund and Acquiring Fund, shall have received on or before
the Closing Date an opinion of Sullivan & Cromwell LLP satisfactory to Acquired
Fund and to Acquiring Fund, substantially to the effect that for federal income
tax purposes:
A-10
<Page>
8.6.1 The acquisition by Acquiring Fund of the assets of Acquired Fund in
exchange solely for voting shares of Acquiring Fund and the assumption by
Acquiring Fund of Acquired Fund's liabilities, if any, followed by the
distribution of Acquiring Fund's voting shares by Acquired Fund PRO RATA to its
shareholders, as a liquidating distribution and constructively in exchange for
their Acquired Fund shares, will constitute a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code, and Acquired Fund and Acquiring
Fund each will be "a party to a reorganization" within the meaning of Section
368(b) of the Internal Revenue Code;
8.6.2 Acquired Fund's shareholders will recognize no gain or loss upon
the receipt of Class A, Class B, Class C and Class Z shares of Acquiring Fund
solely in exchange for and in cancellation of the Acquired Fund shares as
described above and in the Agreement;
8.6.3 No gain or loss will be recognized by Acquired Fund upon the
transfer of its assets to Acquiring Fund in exchange solely for Class A,
Class B, Class C and Class Z shares of Acquiring Fund and the assumption by
Acquiring Fund of Acquired Fund's liabilities, if any. In addition, no gain
or loss will be recognized by Acquired Fund on the liquidating distribution
of such shares to the Acquired Fund shareholders on cancellation of the
shares of Acquired Fund;
8.6.4 No gain or loss will be recognized by Acquiring Fund upon the
acquisition of Acquired Fund's assets in exchange solely for Class A, Class B,
Class C and Class Z shares of Acquiring Fund and the assumption of Acquired
Fund's liabilities, if any;
8.6.5 Acquiring Fund's basis in the assets acquired from Acquired Fund
will be the same as the basis thereof when held by Acquired Fund immediately
before the transfer, and the holding period of such assets acquired by Acquiring
Fund will include the holding period thereof when held by Acquired Fund
immediately before the transfer;
8.6.6 Acquired Fund shareholders' basis in the Class A, Class B, Class
C and Class Z shares of Acquiring Fund to be received by them pursuant to the
reorganization will be the same as their basis in the Class A, Class B, Class
C, Class B/C and Class Z shares of Acquired Fund to be constructively
surrendered in exchange therefor; and
8.6.7 The holding period of Acquiring Fund shares to be received by
Acquired Fund shareholders will include the period during which Acquired Fund
shares to be constructively surrendered in exchange therefor were held; provided
such Acquired Fund shares were held as capital assets by those shareholders on
the date of the exchange.
In rendering this opinion, such counsel may rely as to certain matters,
exclusively and without independent verification, on the representations made in
this Agreement (or in separate letters addressed to such counsel) and the
certificates delivered pursuant to paragraph 3.4.
8.7 Acquired Fund and Acquiring Fund shall have agreed on the number of
full and fractional shares of Acquiring Fund to be issued in connection with
this Agreement after such number has been calculated in accordance with Section
1.1.
9. FINDER'S FEES AND EXPENSES
9.1 Each Fund represents and warrants to the other that there are no
finder's fees payable in connection with the transactions provided for herein.
9.2 The expenses incurred in connection with the entering into and
carrying out of the provisions of this Agreement shall be borne by Acquired
Fund.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement between the Funds.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
A-11
<Page>
11. TERMINATION
Either Fund may at its option terminate this Agreement at or prior to the
Closing Date because of:
11.1 A material breach by the other of any representation, warranty or
covenant contained herein to be performed at or prior to the Closing Date; or
11.2 A condition herein expressed to be precedent to the obligations of
either party not having been met and it reasonably appearing that it will not or
cannot be met; or
11.3 A mutual written agreement of Acquired Fund and Acquiring Fund.
In the event of any such termination, there shall be no liability for
damages on the part of either Fund or any Director or officer of Acquiring Fund
or Acquired Fund.
12. AMENDMENT
This Agreement may be amended, modified or supplemented only in writing by
the parties; provided, however, that following the shareholders' meeting called
by Acquired Fund pursuant to paragraph 5.2, no such amendment may have the
effect of changing the provisions for determining the number of shares of
Acquiring Fund to be distributed to Acquired Fund shareholders under this
Agreement to the detriment of such shareholders without their further approval.
13. NOTICES
Any notice, report, demand or other communication required or permitted by
any provision of this Agreement shall be in writing and shall be given by hand
delivery, or prepaid certified mail or overnight service addressed to Prudential
Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey
07102 Attention: Marguerite E. H. Morrison.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each
of which will be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
14.4 This Agreement shall bind and inure to the benefit of the parties
and their respective successors and assigns, and no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by either party
without the written consent of the other party. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm or corporation other than the parties and their respective successors and
assigns any rights or remedies under or by reason of this Agreement.
A-12
<Page>
15. NO PERSONAL LIABILITY
Under the laws of the State of Maryland, the shareholders of Acquired Fund
and Acquiring Fund have no personal liability for the debts or obligations of
Acquired Fund or Acquiring Fund, respectively, as a result of their status as
shareholders. In certain circumstances a shareholder may be liable for
contribution to the extent that the shareholder accepted knowingly a
distribution made in violation of the Charter or of Section 2-311 of the
Corporations and Associations Article of the Annotated Code of Maryland.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its President or Vice President.
SPECIAL MONEY MARKET FUND, INC.
By:
-----------------------------------
Judy A. Rice
PRESIDENT
MONEYMART ASSETS, INC.
By:
-----------------------------------
Robert F. Gunia
VICE PRESIDENT
A-13
<Page>
TABLE OF CONTENTS TO THE PROXY STATEMENT AND PROSPECTUS
<Table>
2 VOTING INFORMATION
4 Vote Required
4 APPROVAL OF THE TRANSACTION SYNOPSIS
4 Investment Objectives and Policies
5 Investment Advisory Services
5 Expense Structures
5 Purchases, Redemptions, Exchanges and Distributions
5 Tax Considerations
5 Appraisal Rights
6 Potential Benefits from Transaction
6 THE PROPOSED TRANSACTION
7 Shareholder Fees and Expenses
8 Examples of the Effect of Fund Expenses
10 Pro Forma Capitalization
10 Anticipated Impact of the Wachovia Redemptions
11 Performance Comparisons of the Funds
13 INVESTMENT OBJECTIVES AND POLICIES
13 Investment Objectives
13 Principal Investment Strategies
14 COMPARISON OF OTHER POLICIES OF THE FUNDS
14 Investment Restrictions
14 COMPARISON OF PRINCIPAL RISK FACTORS
15 OPERATIONS OF MONEYMART FOLLOWING THE TRANSACTION
15 PURCHASES, REDEMPTIONS, EXCHANGES AND DISTRIBUTIONS
15 Purchasing Shares
15 Redeeming Shares
16 Purchases and Redemptions of Special Money Fund
16 Exchanges of Fund Shares
16 Dividends and Other Distributions
16 THE PROPOSED TRANSACTION
16 Agreement and Plan of Reorganization
17 Reasons for the Transaction
17 Description of the Securities to be Issued
18 U.S. Federal Income Tax Considerations
19 Conclusion
19 ADDITIONAL INFORMATION ABOUT MONEYMART
19 MISCELLANEOUS
19 Legal Matters
19 Independent Registered Public Accounting Firm
19 Available Information
20 Notice to Banks, Broker-Dealers and Voting Trustees and Their Nominees
20 SHAREHOLDER PROPOSALS
20 OTHER BUSINESS
A-1 ATTACHMENT A: Agreement and Plan of Reorganization
ENCLOSURES: Annual Report of MoneyMart for the fiscal year ended December
31, 2003. Prospectus of MoneyMart.
</Table>
<Page>
MONEYMART ASSETS, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102
(800) 225-1852
STATEMENT OF ADDITIONAL INFORMATION
DATED JUNE 23, 2004
SPECIAL MONEY MARKET FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102
(800) 225-1852
This Statement of Additional Information specifically relates to the
proposed transaction (Transaction) between Special Money Market Fund, Inc.
(Special Money Fund) and MoneyMart Assets, Inc. (MoneyMart), under which Special
Money Fund will transfer all of its assets to, and all of its liabilities will
be assumed by, MoneyMart. MoneyMart will be the surviving fund, and each whole
and fractional share of Special Money Fund shall be exchanged for whole and
fractional shares of equal net asset value of MoneyMart to occur on August 17,
2004, or such later date as the parties may agree. This Statement of Additional
Information consists of this cover page and the following described documents,
each of which are included herein unless noted otherwise:
1. Statement of Additional Information of MoneyMart dated February 27,
2004 (incorporated by reference).
2. Annual Report of Special Money Fund for the fiscal year ended
June 30, 2003.
3. Annual Report of MoneyMart for the fiscal year ended December 31,
2003.
4. Semi-Annual Report of Special Money Fund for the six-month period
ended December 31, 2003. The Semi-Annual Report is unaudited, and
reflects all adjustments which, in the opinion of management of
Special Money Fund, are necessary to a fair statement of the results
for the six-month period ended December 31, 2003.
This Statement of Additional Information is not a prospectus and should
be read only in conjunction with the Prospectus and Proxy Statement dated
June 23, 2004, relating to the above-referenced matter. A copy of the
Prospectus and Proxy Statement may be obtained from MoneyMart without charge
by writing or calling MoneyMart at the address or phone number listed above.
FINANCIAL STATEMENTS
The Annual Reports of Special Money Fund and MoneyMart, for the fiscal
years ended June 30, 2003 and December 31, 2003, respectively, each including
audited financial statements, the notes thereto and the report of their
independent registered public accounting firm thereon, are included herein.
The Semi-Annual Report of Special Money Fund, for the six-month period ended
December 31, 2003 and the notes thereto, is also included herein. Pro forma
financial statements for MoneyMart reflecting the consummation of the
transaction have not been included because the assets of Special Money Fund
in comparison with MoneyMart are relatively small and the preparation of pro
forma financial statements is not required under the federal securities laws.
<Page>
ANNUAL REPORT
JUNE 30, 2003
Special Money Market Fund, Inc.
FUND TYPE
Money market
OBJECTIVE
High current income consistent with the preservation of principal and liquidity
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.
<Page>
Special Money Market Fund, Inc.
Performance at a Glance
FUND OBJECTIVE
The Special Money Market Fund, Inc. (the Fund) seeks high current income
consistent with the preservation of principal and liquidity. There can be no
assurance that the Fund will achieve its investment objective.
Money Market Fund Yield Comparison
<Table>
<Caption>
Special Money iMoneyNet, Inc.
Market Fund, Inc.-- Taxable Prime
Class B/C Retail Avg.
------------------- ---------------
06/25/02 1.22 1.16
07/02/02 1.26 1.16
07/09/02 1.26 1.14
07/16/02 1.23 1.14
07/23/02 1.18 1.13
07/30/02 1.18 1.12
08/06/02 1.17 1.11
08/13/02 1.16 1.10
08/20/02 1.16 1.09
08/27/02 1.15 1.08
09/03/02 1.13 1.09
09/10/02 1.19 1.07
09/17/02 1.19 1.07
09/24/02 1.19 1.07
10/01/02 1.19 1.07
10/08/02 1.15 1.04
10/15/02 1.14 1.04
10/22/02 1.15 1.03
10/29/02 1.14 1.04
11/05/02 1.15 1.03
11/12/02 1.10 0.94
11/19/02 1.03 0.88
11/26/02 0.97 0.83
12/03/02 0.93 0.81
12/10/02 0.86 0.78
12/17/02 0.82 0.77
12/24/02 0.79 0.75
12/31/02 0.77 0.74
01/07/03 0.76 0.72
01/14/03 0.76 0.70
01/21/03 0.72 0.68
01/28/03 0.70 0.66
02/04/03 0.72 0.65
02/11/03 0.74 0.64
02/18/03 0.69 0.63
02/25/03 0.69 0.62
03/04/03 0.65 0.62
03/11/03 0.62 0.60
03/18/03 0.61 0.59
03/25/03 0.56 0.58
04/01/03 0.54 0.58
04/08/03 0.55 0.57
04/15/03 0.54 0.57
04/22/03 0.53 0.56
04/29/03 0.44 0.55
05/06/03 0.37 0.55
05/13/03 0.37 0.54
05/20/03 0.36 0.54
05/27/03 0.36 0.53
06/03/03 0.33 0.54
06/10/03 0.32 0.53
06/17/03 0.29 0.51
06/24/03 0.22 0.48
</Table>
SOURCE: STATE STREET BANK FOR PRUDENTIAL FUNDS
IMONEYNET, INC. FOR UNIVERSE AVERAGES
RUN DATE: JULY 3, 2003
Past performance is not indicative of future results. The graph portrays weekly
7-day current yields for Special Money Market Fund, Inc.--Class B/C shares and
the iMoneyNet, Inc. Taxable Prime Retail Average every Tuesday from June 25,
2002 to June 24, 2003, the closest dates to the beginning and end of our
reporting period. The data portrayed at the end of the reporting period in the
graph may not match the data portrayed in the Fund Facts table as of June 30,
2003.
<Page>
Annual Report June 30, 2003
Fund Facts As of 6/30/03
<Table>
<Caption>
7-Day Net Asset Weighted Avg. Net Assets
Current Yield Value (NAV) Maturity (WAM) (Millions)
Class A 0.06% $ 1.00 66 Days $ 3
Class B* 0.18% $ 1.00 66 Days $ 6
Class C* 0.18% $ 1.00 66 Days $ 2
Class B/C* 0.18% $ 1.00 66 Days $ 193
Class Z* 0.18% $ 1.00 66 Days $ 3
iMoneyNet, Inc.
Taxable Prime Retail Avg.** 0.48% N/A 58 Days N/A
</Table>
Note: Yields will fluctuate from time to time, and past performance is not
indicative of future results. An investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
*Class B, Class C, Class B/C, and Class Z shares are not subject to distribution
and service (12b-1) fees.
**iMoneyNet, Inc. reports a 7-day current yield and WAM on Tuesdays. This is the
data of all funds in the iMoneyNet, Inc. Taxable Prime Retail Average category
as of June 24, 2003, the closest date to the end of our reporting period.
Weighted Average Maturity Comparison
<Table>
<Caption>
iMoneyNet, Inc.
Special Money Taxable Prime
Market Fund, Inc. Retail Avg.
----------------- ---------------
06/25/02 44 61
07/02/02 44 60
07/09/02 40 58
07/16/02 43 59
07/23/02 46 59
07/30/02 46 59
08/06/02 42 59
08/13/02 42 59
08/20/02 39 60
08/27/02 44 60
09/03/02 43 58
09/10/02 40 57
09/17/02 45 57
09/24/02 47 57
10/01/02 46 56
10/08/02 44 56
10/15/02 43 56
10/22/02 41 58
10/29/02 40 57
11/05/02 43 57
11/12/02 46 58
11/19/02 52 59
11/26/02 54 59
12/03/02 44 56
12/10/02 40 56
12/17/02 51 58
12/24/02 53 57
12/31/02 56 54
01/07/03 54 53
01/14/03 52 53
01/21/03 50 53
01/28/03 54 53
02/04/03 52 52
02/11/03 45 54
02/18/03 44 53
02/25/03 49 54
03/04/03 45 53
03/11/03 46 55
03/18/03 60 57
03/25/03 61 58
04/01/03 61 57
04/08/03 59 57
04/15/03 60 57
04/22/03 61 56
04/29/03 55 57
05/06/03 56 56
05/13/03 51 56
05/20/03 46 56
05/27/03 58 55
06/03/03 39 54
06/10/03 52 56
06/17/03 58 58
06/24/03 54 58
</Table>
SOURCE: STATE STREET BANK FOR PRUDENTIAL FUNDS
IMONEYNET, INC. FOR UNIVERSE AVERAGES
RUN DATE: JULY 3, 2003
Past performance is not indicative of future results. The graph portrays weekly
WAMs for Special Money Market Fund, Inc. and the iMoneyNet, Inc. Taxable Prime
Retail Average every Tuesday from June 25, 2002 to June 24, 2003, the closest
dates to the beginning and end of our reporting period. The data portrayed at
the end of the reporting period in the graph may not match the data portrayed in
the Fund Facts table as of June 30, 2003.
1
<Page>
August 15, 2003
DEAR SHAREHOLDER,
Developments in the United States and abroad encouraged large swings in the
value of stocks and a trend toward lower interest rates that drove impressive
gains in bonds during the 12-month reporting period of the Fund. In this
volatile investment environment, money market funds remained a comparatively
safe haven for many investors, even though their yields declined toward record
low levels.
Market conditions may remain challenging, but regardless of the future direction
of stocks and bonds, it is important to remember that a wise investor plans
today for tomorrow's needs. Current market activity should have little impact on
planning for your long-term investment goals. Whether you are investing for your
retirement, your children's education, or some other purpose, a diversified
asset allocation strategy is a disciplined approach to investing that may help
you make more consistent progress toward your goals.
We recommend that you develop a personal asset allocation strategy in
consultation with a financial professional who knows you, who understands your
reasons for investing, the time you have to reach your goals, and the amount of
risk you are comfortable assuming. Your financial professional can help you
choose the appropriate funds to implement your strategy.
On the following pages the Special Money Market Fund's management team explains
conditions in the money markets and the Fund's performance. I was named
president of the Fund in March 2003. As always, thank you for your continued
confidence in our mutual funds. We look forward to serving your future
investment needs.
Sincerely,
/s/ Judy A. Rice
Judy A. Rice, President
Special Money Market Fund, Inc.
2
<Page>
Special Money Market Fund, Inc.
Annual Report June 30, 2003
INVESTMENT ADVISER'S REPORT
MARKET OVERVIEW AND PERFORMANCE SUMMARY
Interest rates generally declined during our fiscal year that began July 1, 2002
amid a climate of economic uncertainty in the United States. Early in the
reporting period, accounting scandals at certain U.S. firms pressured stock
prices and undermined consumer confidence in the economy. As the reporting
period continued, there were concerns about the United States' involvement in a
war in Iraq, high oil prices, and other geopolitical matters.
The Federal Reserve (the Fed) reduced the federal funds rate in November 2002
and June 2003 in an effort to stimulate economic growth. The Fed cut its target
for the overnight bank lending rate by a total of three-quarters of a percentage
point to 1.00%, the lowest level in many years. Meanwhile, the average seven-day
compound yield for taxable money market funds reached very low levels late in
the reporting period.
In this declining-interest-rate environment, we tried to maximize interest
income in the Fund by investing in a diversified portfolio of high-quality debt
securities. Our portfolio consisted of longer-term money market securities that
tend to offer relatively higher yields, and shorter-term securities that we
believed provided a degree of flexibility to the Fund. Proceeds of the
shorter-term securities were readily available to invest during brief intervals
when interest rates temporarily edged higher. The Fund's net asset value (NAV)
remained at $1.00 per share throughout its fiscal year.
INVESTING AMID HISTORICALLY LOW RATES
We positioned the Fund's weighted average maturity (WAM) shorter than its
competitive average early in our reporting period. (WAM, expressed in days,
takes into account the maturity and quantity of each security held in a
portfolio. It indicates a portfolio's sensitivity to changes in interest rates.)
However, we began to lengthen the WAM later in 2002 by investing in corporate
securities that mature in one year to lock in their yields.
3
<Page>
In 2003 we altered our strategy as yields continued to fall and the money market
yield curve inverted. We generally bought securities that matured in two or
three months in an effort to position the Fund's WAM more in line with its
competitive average.
IMPACT OF SECTOR SELECTION ON THE FUND
One sector that we believed had value was federal agency securities,
particularly those scheduled to mature in 13 months that could be retired early
(or called) by their issuers in three months. These callable securities featured
attractive yields to compensate investors for this early maturity option.
Although many federal agency securities were called as interest rates slid
progressively lower, they benefited the Fund by providing incremental yield
during the time they were held in the portfolio.
The Fund owns adjustable-rate securities whose rates are reset monthly or
quarterly. If economic growth eventually accelerates in 2003 and money market
yields begin to rise, we believe these securities will enhance the Fund's
interest income as their rates reset to higher levels.
Special Money Market Fund Management Team
4
<Page>
Special Money Market Fund, Inc. Money Market Series
Portfolio of Investments as of June 30, 2003
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- --------------------------------------------------------------------------------
Bank Notes 18.8%
American Express Centurion Bank
$ 4,000 1.084%, 7/29/03(a) $ 3,999,669
Bank One N.A.
10,000 1.244%, 9/26/03(a) 10,006,242
Chase Manhattan Corp.
3,000 1.269%, 9/15/03(a) 3,000,778
FleetBoston Financial Corp.
9,265 1.43%, 7/14/03(a) 9,265,431
JP Morgan Chase & Co.
5,000 1.415%, 8/5/03(a) 5,003,740
1,000 1.38%, 8/26/03(a) 1,000,313
U.S. Bancorp
1,675 5.875%, 11/1/03 1,700,054
Wachovia Corp.
4,500 6.625%, 6/15/04 4,733,145
--------------
38,709,372
- --------------------------------------------------------------------------------
Certificates of Deposit - Yankee 10.9%
Banco Bilbao Vizcaya Argentaria
4,000 1.165%, 7/16/03(a) 4,000,000
5,000 1.30%, 7/16/03 5,000,000
1,700 1.29%, 8/6/03 1,700,000
BNP Paribas Grand Cayman
3,759 1.375%, 7/1/03 3,759,000
Dresdner Bank AG
4,000 1.30%, 7/3/03(a) 4,000,000
Royal Bank of Scotland PLC
4,000 1.35%, 4/19/04 4,000,000
--------------
22,459,000
- --------------------------------------------------------------------------------
Commercial Paper 41.9%
Aventis
1,000 1.00%, 7/8/03 999,806
BASF Aktiengesellschaft
991 1.03%, 7/30/03 990,178
</Table>
See Notes to Financial Statements
5
<Page>
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- --------------------------------------------------------------------------------
Cargill, Inc.
$ 1,647 1.02%, 11/5/03 $ 1,641,073
Danske Corp.
2,400 1.25%, 7/28/03 2,397,750
Delaware Funding Corp.
1,262 1.00%, 7/22/03 1,261,264
Fleet Funding Corp.
835 1.05%, 7/23/03 834,464
Forrestal Funding Trust
4,443 1.03%, 7/21/03 4,440,458
3,000 1.26%, 7/30/03 2,996,955
Fortis Funding LLC
10,000 1.08%, 7/18/03 9,994,900
HBOS Treasury Services PLC
2,705 1.05%, 9/23/03 2,698,373
Intrepid Funding Trust
3,000 1.00%, 7/31/03 2,997,500
Market Street Funding Corp.
6,000 1.11%, 7/21/03 5,996,300
Nationwide Building Society
5,000 1.05%, 9/23/03 4,987,750
New Center Asset Trust
5,000 1.27%, 8/29/03 4,989,593
PB Finance Delaware, Inc.
3,000 1.25%, 7/31/03 2,996,875
Prudential PLC
10,000 1.21%, 8/19/03 9,983,531
San Paolo U.S. Financial Co.
2,000 1.15%, 7/14/03 1,999,169
Sony Global Treasury Services
8,000 1.20%, 8/20/03 7,986,667
Stadshypotek Delaware, Inc.
3,454 1.03%, 8/12/03 3,449,849
Swiss Re Financial Products Corp.
5,587 1.26%, 7/22/03 5,582,893
3,227 1.23%, 7/29/03 3,223,913
Toyota Motor Credit Corp.
1,010 1.04%, 11/25/03 1,005,711
</Table>
See Notes to Financial Statements
6
<Page>
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- --------------------------------------------------------------------------------
Westpac Trust Securities Ltd.
$ 1,900 1.05%, 7/29/03 $ 1,898,448
1,200 1.05%, 8/14/03 1,198,460
--------------
86,551,880
- --------------------------------------------------------------------------------
Other Corporate Obligations 29.1%
American Express Credit Corp.
2,000 1.349%, 7/7/03(a) 2,000,000
Associates Corp. of North America
1,475 5.50%, 8/15/03 1,511,839
Caterpillar Financial Services Corp.
1,000 1.46%, 8/4/03(a) 1,000,237
2,200 7.34%, 9/30/03 2,232,670
General Electric Capital Assurance Corp.
2,000 1.1375%, 7/22/03(a)(b)
(cost $2,000,000; purchased 7/22/02) 2,000,000
General Electric Capital Corp.
6,000 1.17%, 7/17/03(a) 6,000,000
Goldman Sachs Group LP
8,000 1.269%, 9/15/03(a) 8,000,000
Merrill Lynch & Co., Inc.
5,000 1.313%, 7/11/03(a) 5,000,000
3,000 5.70%, 2/6/04 3,080,673
Metropolitan Life Insurance Co.
2,000 1.388%, 7/3/03(a)(b)
(cost $2,000,000; purchased 9/26/02) 2,000,000
Morgan Stanley
5,000 1.28%, 7/15/03(a) 5,000,000
Park Granada LLC
1,286 1.05%, 7/21/03 1,285,250
7,000 1.12%, 7/25/03 6,994,773
1,147 1.31%, 7/28/03 1,145,873
Toyota Motor Credit Corp.
8,599 5.625%, 11/13/03 8,726,918
Wal Mart Stores, Inc.
1,040 7.50%, 5/15/04 1,097,453
</Table>
See Notes to Financial Statements
7
<Page>
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- --------------------------------------------------------------------------------
Wells Fargo & Co.
$ 3,000 7.25%, 7/14/03 $ 3,006,301
--------------
60,081,987
- --------------------------------------------------------------------------------
U.S. Government Agency Obligation 2.4%
Federal Home Loan Banks
4,000 1.25%, 7/2/04 4,000,000
Federal National Mortgage Assoc.
1,000 5.625%, 5/14/04 1,038,316
--------------
5,038,316
--------------
Total Investments 103.1%
(amortized cost $212,840,555)(c) 212,840,555
Liabilities in excess of other assets (3.1%) (6,431,068)
--------------
Net Assets 100% $ 206,409,487
==============
</Table>
- ----------
(a) Variable rate instrument. The maturity date presented for these instruments
is the later of the next date on which the security can be redeemed at par
or the next date on which the rate of interest is adjusted.
(b) Private placement restricted as to resale and does not have a readily
available market; the aggregate cost of such securities is $4,000,000, and
is approximately 1.9% of net assets.
(c) Federal income tax basis is the same as for financial reporting purposes.
See Notes to Financial Statements
8
<Page>
The industry classification of portfolio holdings and liabilities in excess of
other assets shown as a percentage of net assets as of June 30, 2003 was as
follows:
<Table>
Commercial Bank 39.2%
Bank Holding Companies-Domestic 16.8
Security Brokers & Dealers 10.2
Life Insurance 6.8
Asset-Backed Securities 6.3
Motor Vehicle 4.7
Fire, Marine, Casualty Insurance 4.3
Phone Records, Tape & Disk 3.9
Short-Term Business Credit 2.9
Federal Credit Agencies 2.4
Construction Machinery & Equipment 1.6
Finance Services 1.0
Grain Mills Products 0.8
Personal Credit 0.7
Chemicals & Allied Products 0.5
Pharmaceutical 0.5
Variety Stores 0.5
-----
103.1
Liabilities in excess of other assets (3.1)
-----
100.0%
=====
</Table>
See Notes to Financial Statements
9
<Page>
Special Money Market Fund, Inc. Money Market Series
Statement of Assets and Liabilities
<Table>
<Caption>
June 30, 2003
- --------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market
value $ 212,840,555
Cash 3,154
Receivable for Series shares sold 874,210
Interest receivable 486,460
Prepaid expenses 4,316
-------------
Total assets 214,208,695
-------------
LIABILITIES
Payable for investments purchased 7,020,332
Payable for Series shares reacquired 530,459
Accrued expenses 154,243
Management fee payable 86,782
Dividends payable 7,121
Distribution fee payable 271
-------------
Total liabilities 7,799,208
-------------
NET ASSETS $ 206,409,487
=============
Net assets were comprised of:
Common stock, $0.001 par value per share $ 206,409
Paid-in capital in excess of par 206,203,078
-------------
Net assets, June 30, 2003 $ 206,409,487
=============
</Table>
See Notes to Financial Statements
10
<Page>
<Table>
<Caption>
June 30, 2003
- --------------------------------------------------------------------------------
Class A:
Net asset value, offering price and redemption price per share
($2,574,245 / 2,574,245 shares of common stock
issued and outstanding) $ 1.00
=========
Class B:
Net asset value, offering price and redemption price per share
($6,007,678 / 6,007,678 shares of common stock
issued and outstanding) $ 1.00
=========
Class C:
Net asset value, offering price and redemption price per share
($2,182,762 / 2,182,762 shares of common stock
issued and outstanding) $ 1.00
=========
Class B/C:
Net asset value, offering price and redemption price per share
($193,129,763 / 193,129,763 shares of common
stock issued and outstanding) $ 1.00
=========
Class Z:
Net asset value, offering price and redemption price per share
($2,515,039 / 2,515,039 shares of common
stock issued and outstanding) $ 1.00
=========
</Table>
See Notes to Financial Statements
11
<Page>
Statement of Operations
<Table>
<Caption>
Year
Ended
June 30, 2003
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $ 3,972,993
-------------
Expenses
Management fee 1,230,590
Distribution fee--Class A 3,093
Transfer agent's fees and expenses 331,000
Custodian's fees and expenses 97,000
Reports to shareholders 89,000
Registration fees 82,000
Legal fees and expenses 48,000
Audit fee 27,000
Directors' fees 9,000
Insurance expense 4,000
Miscellaneous 3,389
-------------
Total expenses 1,924,072
-------------
Net investment income 2,048,921
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 5,996
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,054,917
=============
</Table>
See Notes to Financial Statements
12
<Page>
Statement of Changes in Net Assets
<Table>
<Caption>
Year Ended June 30,
------------------------------
2003 2002
- ---------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 2,048,921 $ 5,240,214
Net realized gain on investment transactions 5,996 32,513
------------- -------------
Net increase in net assets resulting from
operations 2,054,917 5,272,727
------------- -------------
Dividends and distributions to shareholders
(Note 1)
Class A (16,465) (39,290)
Class B (23,153) --
Class C (9,756) --
Class B/C (1,995,994) (5,232,392)
Class Z (9,549) (1,045)
------------- -------------
(2,054,917) (5,272,727)
------------- -------------
Fund share transactions (at $1 per share)
Proceeds from shares sold 236,444,840 213,585,675
Net asset value of shares issued to
shareholders in reinvestment of dividends
and distributions 1,838,509 4,634,585
Cost of shares reacquired (257,976,620) (256,994,405)
------------- -------------
Net decrease in net assets from Series share
transactions (19,693,271) (38,774,145)
------------- -------------
Total decrease (19,693,271) (38,774,145)
NET ASSETS
Beginning of year 226,102,758 264,876,903
------------- -------------
End of year $ 206,409,487 $ 226,102,758
============= =============
</Table>
See Notes to Financial Statements
13
<Page>
Special Money Market Fund, Inc. Money Market Series
Notes to Financial Statements
Special Money Market Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company consisting of only the Money Market Series (the "Series"). Investment
operations of the Series commenced on January 22, 1990.
The investment objective of the Series is high current income consistent
with the preservation of principal and liquidity. The Series invests in a
diversified portfolio of high quality money market securities maturing in 13
months or less. The ability of issuers of securities held by the Series to meet
their obligations may be affected by economic developments in a specific
industry or region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: Portfolio securities are valued at amortized
cost, which approximates market value. The amortized cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium. If the amortized
cost method is determined not to represent fair value, the value shall be
determined by or under the direction of the Board of Directors.
The Fund may hold up to 10% of its net assets in illiquid securities,
including those which are restricted as to disposition under securities law
("restricted securities"). The restricted security held by the Fund at June 30,
2003 includes registration rights under which the Fund may demand registration
by the issuer. Restricted securities, sometimes referred to as private
placements, are valued pursuant to the valuation procedures noted above.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains (losses) on sales of
securities are calculated on the identified cost basis. The Fund amortizes
premiums and accretes discounts on purchases of portfolio securities as
adjustments to interest income. Interest income is recorded on the accrual
basis. Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income and capital gains, if any, to
its shareholders. Therefore, no federal income tax provision is required.
Dividends and Distributions: The Fund declares daily dividends from net
investment income and net realized short-term capital gains. Payment of
dividends is made monthly. Income distributions and capital gain distributions
are determined in
14
<Page>
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments LLC ("PI" or
"Manager"). Pursuant to a subadvisory agreement between PI and Prudential
Investment Management, Inc. ("PIM" or "Subadviser"), PIM furnishes investment
advisory services in connection with the management of the Fund. Under the
subadvisory agreement, PIM, subject to the supervision of PI, is responsible for
managing the assets of the Fund in accordance with its investment objective and
policies. PI pays for the services of PIM, the cost of compensation of officers
of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund.
The Fund bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly at an
annual rate of .50% of the average daily net assets of the Fund.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ("PIMS"), which acts as the distributor of the Class A,
Class B, Class C, Class B/C and Class Z shares of the Fund. The Fund compensates
PIMS for distributing and servicing the Fund's Class A shares, pursuant to a
plan of distribution (the "Class A Plan"), regardless of expenses actually
incurred by it. The distribution fees are accrued daily and payable monthly. No
distribution or service fees are paid to PIMS as distributor of the Class B,
Class C, Class B/C and Class Z shares of the Fund.
Pursuant to the Class A Plan, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .125 of 1% of the
average daily net assets of Class A for the year ended June 30, 2003.
PI, PIM and PIMS are indirect wholly-owned subsidiaries of Prudential
Financial, Inc. ("Prudential").
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ("PMFS"), an affiliate of PI and an indirect
wholly-owned subsidiary of Prudential, serves as the Fund's transfer agent.
During the year ended June 30, 2003, the Fund incurred fees of approximately
$266,800 for the services of PMFS. As of June 30, 2003, approximately $20,000 of
such fees were due to PMFS. Transfer agent fees and expenses in the Statement of
Operations include certain out-of-pocket expenses paid to non-affiliates.
The Fund pays networking fees to affiliated and unaffiliated
broker/dealers. These networking fees are payments made to broker/dealers that
clear mutual fund transactions through a national clearing system. The Fund
incurred approximately
15
<Page>
$24,700 in total networking fees, of which the amount relating to the services
of Prudential Securities, Inc. ("PSI"), an affiliate of PI and an indirect,
wholly-owned subsidiary of Prudential, was approximately $23,400 for the year
ended June 30, 2003. As of June 30, 2003, approximately $1,600 of such fees were
due to PSI. These amounts are included in transfer agent's fees and expenses in
the Statement of Operations.
Effective July 1, 2003, PSI became a division of Wachovia Securities LLC
of which Prudential holds a minority interest.
Note 4. Capital
The Series offers Class A, Class B, Class C, Class B/C and Class Z shares.
Prior to September 9, 2002 investors who held either Class B or Class C
shares in the Strategic Partners funds who wished to exchange their shares for
shares of the Fund received Class B/C shares of the Fund. Class B/C shares of
the Fund have no front-end or back-end sales charges, and carry no 12b-1 fee.
Effective September 9, 2002 investors who held Class B shares of any of the
Strategic Partners funds who wish to exchange into the Fund will receive Class B
shares of the Fund. Similarly, investors who held Class C shares of any of the
Strategic Partners funds will receive Class C shares of the Fund. Class B and
Class C shares of the Fund, like Class B/C, have no front-end or back-end
charges, and carry no 12b-1 fees.
The Strategic Partners investors who held Class B/C shares through
September 9, 2002 have been grandfathered and will continue to hold those shares
until they redeem.
The Fund has authorized two billion shares of beneficial interest at $.001
par value.
Transactions in shares of common stock (at $1 per share) were as follows:
<Table>
<Caption>
Shares and
Dollar Amount
---------------
Class A
Year ended June 30, 2003:
Shares sold $ 3,649,440
Shares issued in reinvestment of dividends and distributions 14,864
Shares reacquired (3,254,307)
---------------
Net increase (decrease) in shares outstanding $ 409,997
===============
Year ended June 30, 2002:
Shares sold $ 3,080,571
Shares issued in reinvestment of dividends and distributions 37,989
Shares reacquired (2,634,884)
---------------
Net increase (decrease) in shares outstanding $ 483,676
===============
</Table>
16
<Page>
<Table>
<Caption>
Shares and
Dollar Amount
---------------
Class B
September 9, 2002(a) through June 30, 2003:
Shares sold $ 10,155,015
Shares issued in reinvestment of dividends and distributions 18,199
Shares reacquired (4,165,536)
---------------
Net increase (decrease) in shares outstanding $ 6,007,678
===============
Class C
September 9, 2002(a) through June 30, 2003:
Shares sold $ 7,002,202
Shares issued in reinvestment of dividends and distributions 8,299
Shares reacquired (4,827,739)
---------------
Net increase (decrease) in shares outstanding $ 2,182,762
===============
Class B/C
Year ended June 30, 2003:
Shares sold $ 212,997,652
Shares issued in reinvestment of dividends and distributions 1,787,535
Shares reacquired (244,951,348)
---------------
Net increase (decrease) in shares outstanding $ (30,166,161)
===============
Year ended June 30, 2002:
Shares sold $ 209,862,639
Shares issued in reinvestment of dividends and distributions 4,595,697
Shares reacquired (254,358,693)
---------------
Net increase (decrease) in shares outstanding $ (39,900,357)
===============
Class Z
Year ended June 30, 2003:
Shares sold $ 2,640,531
Shares issued in reinvestment of dividends and distributions 9,612
Shares reacquired (777,690)
---------------
Net increase (decrease) in shares outstanding $ 1,872,453
===============
Year ended June 30, 2002:
Shares sold $ 642,465
Shares issued in reinvestment of dividends and distributions 899
Shares reacquired (828)
---------------
Net increase (decrease) in shares outstanding $ 642,536
===============
</Table>
- ----------
(a) Commencement of offering of Class B and Class C shares.
17
<Page>
Note 5. Distributions and Tax Information
For the years ended June 30, 2003 and June 30, 2002, the tax character of
dividends paid, as reflected in the Statement of Changes in Net Assets, of
$2,054,917 and $5,272,727, respectively, was ordinary income.
18
<Page>
Special Money Market Fund, Inc. Money Market Series
Financial Highlights
<Table>
<Caption>
Class A
-----------------------------------------------------
Year Ended June 30, January 26, 2001(b)
------------------------------ Through
2003 2002 June 30, 2001
- ------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00
Net investment income and net
realized gains .007 .019 .018
Dividends and distributions to
shareholders (.007) (.019) (.018)
------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
======= ======= =======
TOTAL RETURN(a): .71% 1.98% 1.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,574 $ 2,164 $ 1,681
Average net assets (000) $ 2,474 $ 2,082 $ 276
Ratios to average net assets:
Expenses, including
distribution and service
(12b-1) fees .91% .87% .83%(c)
Expenses, excluding
distribution and service
(12b-1) fees .78% .74% .70%(c)
Net investment income .66% 1.87% 4.23%(c)
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods of less than a
full year are not annualized.
(b) Commencement of offering of Class A shares.
(c) Annualized.
See Notes to Financial Statements
19
<Page>
<Table>
<Caption>
Class B
--------------------
September 9, 2002(b)
Through
June 30, 2003
- ----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00
Net investment income and net realized gains .006
Dividends and distributions to shareholders (.006)
--------
Net asset value, end of period $ 1.00
========
TOTAL RETURN(a): .64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 6,008
Average net assets (000) $ 4,394
Ratios to average net assets:(c)
Expenses, including distribution and service (12b-1) fees .78%
Expenses, excluding distribution and service (12b-1) fees .78%
Net investment income .65%
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods of less than one
full year are not annualized.
(b) Commencement of offering of Class B shares. (See Note 4).
(c) Annualized.
See Notes to Financial Statements
20
<Page>
<Table>
<Caption>
Class C
--------------------
September 9, 2002(b)
Through
June 30, 2003
- ----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00
Net investment income and net realized gains .006
Dividends and distributions to shareholders (.006)
--------
Net asset value, end of period $ 1.00
========
TOTAL RETURN(a): .64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,183
Average net assets (000) $ 1,811
Ratios to average net assets:(c)
Expenses, including distribution and service (12b-1) fees .78%
Expenses, excluding distribution and service (12b-1) fees .78%
Net investment income .67%
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods of less than one
full year are not annualized.
(b) Commencement of offering of Class C shares. (See Note 4).
(c) Annualized.
See Notes to Financial Statements
21
<Page>
<Table>
<Caption>
Class B/C
-----------------
Year Ended
June 30, 2003
- ---------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00
Net investment income and net realized gains .008
Dividends and distributions to shareholders (.008)
---------
Net asset value, end of year $ 1.00
=========
TOTAL RETURN(a): .84%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 193,130
Average net assets (000) $ 236,506
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .78%
Expenses, excluding distribution and service (12b-1) fees .78%
Net investment income .84%
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
See Notes to Financial Statements
22
<Page>
<Table>
<Caption>
Class B/C
---------------------------------------------------
Year Ended June 30,
---------------------------------------------------
2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income and net realized gains .020 .054 .052 .047
Dividends and distributions to shareholders (.020) (.054) (.052) (.047)
--------- --------- --------- ---------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= =========
TOTAL RETURN(a): 2.11% 5.63% 5.32% 4.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 223,296 $ 263,196 $ 229,247 $ 320,524
Average net assets (000) $ 246,999 $ 252,744 $ 308,237 $ 330,135
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .74% .70% .68% .65%
Expenses, excluding distribution and service (12b-1) fees .74% .70% .68% .65%
Net investment income 2.11% 5.36% 5.17% 4.71%
</Table>
See Notes to Financial Statements
23
<Page>
<Table>
<Caption>
Class Z
-----------------------------------------------------
Year Ended June 30, January 26, 2001(b)
------------------------------ Through
2003 2002 June 30, 2001
- --------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00
------- ------- -------
Net investment income and net
realized gains .008 .014 .001
Dividends and distributions to
shareholders (.008) (.014) (.001)
------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
======= ======= =======
TOTAL RETURN(a): .84% 1.43% .08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,515 $ 643 $ 50(d)
Average net assets (000) $ 1,419 $ 83 $ 50(d)
Ratios to average net assets:
Expenses, including
distribution and service
(12b-1) fees .78% .74% .70%(c)
Expenses, excluding
distribution and service
(12b-1) fees .78% .74% .70%(c)
Net investment income .67% 1.27% 2.43%(c)
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods of less than a
full year are not annualized.
(b) Commencement of offering of Class Z shares.
(c) Ratios presented above have been annualized from the date of the first
subscription which occurred on June 7, 2001.
(d) Figure is actual and not rounded to nearest thousand.
See Notes to Financial Statements
24
<Page>
Special Money Market Fund, Inc. Money Market Series
Report of Independent Auditors
To the Shareholders and Board of Directors of
Special Money Market Fund, Inc.
Money Market Series
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Special Money Market Fund,
Inc.--Money Market Series (the "Fund") at June 30, 2003, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
August 28, 2003
25
<Page>
Special Money Market Fund, Inc. Money Market Series
Important Notice for Shareholders (Unaudited)
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders. Please be advised that none of the dividends paid by
the Fund qualify for state tax exclusion.
26
<Page>
Special Money Market Fund, Inc. Money Market Series
Management of the Fund (Unaudited)
Information pertaining to the Directors of the Fund is set forth below.
Directors who are not deemed to be "interested persons" of the Fund as defined
in the 1940 Act are referred to as "Independent Directors." Directors who are
deemed to be "interested persons" of the Fund are referred to as "Interested
Directors." "Fund Complex" consists of the Fund and any other investment
companies managed by PI.
Independent Directors(2)
David E.A. Carson (69), Director since 2003(3)
Oversees 97 portfolios in Fund complex(4)
Principal occupations (last 5 years): Director (January 2000-May 2000), Chairman
(January 1999-December 1999). Chairman and Chief Executive Officer (January
1996-December 1998) and President, Chairman and Chief Executive Officer
(1983-December 1997) of People's Bank.
Other Directorships held: Director of United Illuminating and UIL Holdings
(utility company), since 1993.
Robert E. La Blanc (69), Director since 1996(3)
Oversees 107 portfolios in Fund complex(4)
Principal occupations (last 5 years): President (since 1981) of Robert E. La
Blanc Associates, Inc. (telecommunications); formerly General Partner at Salomon
Brothers and Vice-Chairman of Continental Telecom; Trustee of Manhattan
College.
Other Directorships held: Director of Storage Technology Corporation (since
1979) (technology), Chartered Semiconductor Manufacturing, Ltd. (since 1998)
(Singapore), 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.
Douglas H. McCorkindale (64), Director Since 2003(3)
Oversees 99 portfolios in Fund complex(4)
Principal occupations (last 5 years): Chairman (since February 2001), Chief
Executive Officer (since June 2000) and President (since September 1997) of
Gannett Co. Inc. (publishing and media), formerly Vice Chairman (March 1994-May
2000) of Gannett Co., Inc.
Other Directorships held: Director of Gannett 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 (61), Director since 2003(3)
Oversees 105 portfolios in Fund complex(4)
Principal occupations (last 5 years): Chairman of the Board (since 1994) and
formerly Chief Executive Officer (1988-2001) and President of Carlisle Companies
Incorporated.
Other Directorships held: Chairman of the Board (since January 1991) and
Director (since 1988) of Carlisle Companies Incorporated (manufacturer of
industrial products); Director of Gannet Co., Inc. (publishing and media).
27
<Page>
Richard A. Redeker (60), Director since 2003(3)
Oversees 100 portfolios in Fund complex(4)
Principal occupations (last 5 years): Formerly Management Consultant of
Invesmart, Inc. (August 2001-October 2001); formerly employee of Prudential
Investments (October 1996-December 1998).
Other Directorships held: None
Robin B. Smith (63), Director since 1996(3)
Oversees 107 portfolios in Fund complex(4)
Principal occupations (last 5 years): Chairman of the Board (since January 2003)
of Publishers Clearing House (direct marketing), formerly Chairman and Chief
Executive Officer (August 1996-December 2002) of Publishers Clearing House.
Other Directorships held: Director of BellSouth Corporation (since 1992).
Stephen Stoneburn (60), Director since 1989(3)
Oversees 105 portfolios in Fund complex(4)
Principal occupations (last 5 years): President and Chief Executive Officer
(since June 1996) of Quadrant Media Corp. (a publishing company); formerly
President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice
President and Managing Director (January 1993-1995) of Cowles Business Media and
Senior Vice President of Fairchild Publications, Inc. (1975-1989).
Other Directorships held: None
Clay T. Whitehead (64), Director since 1999(3)
Oversees 104 portfolios in Fund complex(4)
Principal occupations (last 5 years): President (since 1983) of National
Exchange Inc. (new business development firm).
Other Directorships held: Director (since 2000) of First Financial Fund, Inc.
and Director (since 2000) of The High Yield Plus Fund, Inc.
Interested Directors(1)
Robert F. Gunia (56), Director and Vice President since 1996(3)
Oversees 187 portfolios in Fund complex(4)
Principal occupations (last 5 years): Chief Administrative Officer (since June
1999) of PI; Executive Vice President and Treasurer (since January 1996) of PI;
President (since April 1999) of Prudential Investment Management Services LLC
(PIMS); Corporate Vice President (since September 1997) of The Prudential
Insurance Company of America; Director, Executive Vice President and Chief
Administrative Officer (since May 2003) of American Skandia Investment Services,
Inc., American Skandia Advisory Services, Inc. and American Skandia Fund
Services, Inc.; formerly Senior Vice President (March 1987-May 1999) of
Prudential Securities.
Other Directorships held: Vice President and Director (since May 1989) and
Treasurer (since 1999) of The Asia Pacific Fund, Inc.
28
<Page>
Judy A. Rice (55), Director and President since 2000(3)
Oversees 102 portfolios in Fund complex(4)
Principal occupations (last 5 years): President, Chief Executive Officer, Chief
Operating Officer and Officer-in-Charge (since 2003) of PI; Director,
Officer-in-Charge, President, Chief Executive Officer and Chief Operating
Officer (since May 2003) of American Skandia Advisory Services, Inc.; Director,
Officer-in-Charge, President, Chief Executive Officer and Chief Operating
Officer (since May 2003) of American Skandia Investment Services, Inc.;
Director, Officer-in-Charge, President, Chief Executive Officer and Chief
Operating Officer (since May 2003) of American Skandia Fund Services, Inc.;
formerly various positions to Senior Vice President (1992-1999) of Prudential
Securities; and various positions to Managing Director (1975-1992) of Salomon
Smith Barney; Member of Board of Governors of the Money Management Institute.
Other Directorships held: None
Information pertaining to the Officers of the Fund who are not also Directors is
set forth below.
Officers(2)
Marguerite E.H. Morrison (47), Chief Legal Officer and Assistant Secretary since
2003(3)
Principal occupations (last 5 years): Vice President and Chief Legal
Officer--Mutual Funds and Unit Investment Trusts (since August 2000) of
Prudential; Senior Vice President and Secretary (since April 2003) of PI; Senior
Vice President and Secretary (since May 2003) of American Skandia Investment
Services, Inc., American Skandia Advisory Services, Inc. and American Skandia
Fund Services, Inc.; Vice President and Assistant Secretary of PIMS (since
October 2001), previously Senior Vice President and Assistant Secretary
(February 2001-April 2003) of PI, Vice President and Associate General Counsel
(December 1996-February 2001) of PI.
Grace C. Torres (44), Treasurer and Principal Financial and Accounting Officer
since 1997(3)
Principal occupations (last 5 years): Senior Vice President (since January 2000)
of PI; Senior Vice President and Assistant Treasurer (since May 2003) of
American Skandia Investment Services, Inc. and American Skandia Advisory
Services, Inc.; formerly First Vice President (December 1996-January 2000) of PI
and First Vice President (March 1993-1999) of Prudential Securities.
Jonathan D. Shain (45), Secretary since 2001(3)
Principal occupations (last 5 years): Vice President and Corporate Counsel
(since August 1998) of Prudential; Vice President and Assistant Secretary (since
May 2003) of American Skandia Investment Services, Inc.; Vice President and
Assistant Secretary (since May 2003) of American Skandia Fund Services, Inc.;
formerly Attorney with Fleet Bank, N.A. (January 1997-July 1998) and Associate
Counsel (August 1994-January 1997) of New York Life Insurance Company.
29
<Page>
Maryanne Ryan (38), Anti-Money Laundering Compliance Officer since 2002(3)
Principal occupations (last 5 years): Vice President, Prudential (since November
1998), First Vice President, Prudential Securities Inc. (March 1997-May 1998);
Anti-Laundering Officer (since May 2003) of American Skandia Investment
Services, Inc., American Skandia Advisory Services, Inc. and American Skandia
Marketing, Inc.
- ----------
(1) "Interested" Director, as defined in the 1940 Act, by reason of employment
with the Manager, (Prudential Investments LLC or PI), the Subadviser
(Prudential Investment Management, Inc. or PIM) or the Distributor
(Prudential Investment Management Services LLC or PIMS).
(2) Unless otherwise noted, the address of the Directors and Officers is c/o:
Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street,
Newark, NJ 07102.
(3) There is no set term of office for Directors and Officers. The Independent
Directors have adopted a retirement policy, which calls for the retirement
of Directors on December 31 of the year in which they reach the age of 75.
The table shows the individuals length of service as Directors and/or
Officer.
(4) The Fund Complex of all investment companies managed by PI. Effective
May 1, 2003, the Funds for which PI serves as manager include JennisonDryden
Mutual Funds, Strategic Partners Funds, American Skandia Advisor Funds, Inc.
The Prudential Variable Contract Accounts 2, 10, 11, The Target Portfolio
Trust, The Prudential Series Fund, Inc., American Skandia Trust, and
Prudential's Gibraltar Fund.
Additional information about the Fund's Directors is included in the Fund's
Statement of Additional Information which is available without charge, upon
request, by calling (800) 521-7466 or (732) 482-7555 (Calling from outside the
U.S.)
30
<Page>
This Page Intentionally Left Blank
<Page>
This Page Intentionally Left Blank
<Page>
This Page Intentionally Left Blank
<Page>
This Page Intentionally Left Blank
<Page>
This Page Intentionally Left Blank
<Page>
This Page Intentionally Left Blank
<Page>
FOR MORE INFORMATION
Special Money Market Fund, Inc.
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit our websites at:
www.jennisondryden.com
www.strategicpartners.com
DIRECTORS
David E.A. Carson
Robert F. Gunia
Robert E. La Blanc
Douglas H. McCorkindale
Stephen P. Munn
Richard A. Redeker
Judy A. Rice
Robin B. Smith
Stephen D. Stoneburn
Clay T. Whitehead
Officers
Judy A. Rice, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Marguerite E.H. Morrison, Chief Legal
Officer and Assistant Secretary
Jonathan D. Shain, Secretary
Maryanne Ryan, Anti-Money Laundering
Compliance Officer
MANAGER
Prudential Investments LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
INVESTMENT ADVISER
Prudential Investment Management, Inc.
Gateway Center Two
100 Mulberry Street
Newark, NJ 07102
DISTRIBUTOR
Prudential Investment
Management Services LLC
Gateway Center Three, 14th Floor
100 Mulberry Street
Newark, NJ 07102-4077
CUSTODIAN
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
TRANSFER AGENT
Prudential Mutual Fund Services LLC
PO Box 8098
Philadelphia, PA 19101
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004-2498
Mutual Funds:
<Table>
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR
GOVERNMENT AGENCY ANY BANK AFFILIATE
</Table>
<Table>
<Caption>
Fund Symbols Nasdaq CUSIP
- ------------ ------ -----
Class A N/A 84741P102
Class B N/A 84741P508
Class C N/A 84741P607
Class B/C PBSXX 84741P201
Class Z N/A 84741P300
</Table>
MF141E IFS-A083198
<Page>
ANNUAL REPORT
DECEMBER 31, 2003
MONEYMART ASSETS, INC.
FUND TYPE
Money market
OBJECTIVE
Maximum current income consistent with stability of capital and the maintenance
of liquidity
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.
<Page>
Dear Shareholder,
February 23, 2004
As you may know, the mutual fund industry recently has been the subject of much
media attention. As president of MoneyMart Assets, Inc., I'd like to provide you
with an update on the issues as they pertain to your fund.
Regulators and government authorities have requested information regarding
trading practices from many mutual fund companies across the nation. Our fund
family has been cooperating with inquiries it has received, and at the same
time, Prudential Financial, Inc. has been conducting its own internal review.
This review encompasses the policies, systems, and procedures of our fund
family, Prudential Financial's investment units and its proprietary distribution
channels. The review also includes mutual fund trading activity by investment
professionals who manage our funds.
MARKET TIMING
The frequent trading of shares in response to short-term fluctuations in the
market is known as "market timing". When market timing occurs in violation of a
fund's prospectus, in certain circumstances, a fund may have to sell portfolio
securities to have the cash necessary to redeem the market timer's shares. The
redemption may happen when it is not advantageous to sell securities and result
in harming the fund's performance and/or subject the fund to additional
transaction costs.
Prudential Investments LLC, the Fund's investment manager, has actively
discouraged market timing and for years our mutual fund prospectuses have
identified and addressed this issue. Prudential Investments has established
operating policies and procedures that are designed to detect and deter frequent
trading activities that would be disruptive to the management of our mutual fund
portfolios, and has rejected numerous orders placed by market timers in the
past.
<Page>
LATE TRADING
The Securities and Exchange Commission requires that orders to purchase or
redeem mutual fund shares be received either by the fund or by an intermediary
(such as a broker, financial adviser, or 401(k) record keeper) before the time
at which the fund calculates its net asset value (normally 4:00 p.m., Eastern
time) if they are to receive that day's price. The policies of our mutual funds
do not make and have not made allowances for the practice known as "late
trading".
For more than 40 years we have offered investors quality investment products,
financial guidance, and responsive customer service. Today we remain committed
to this heritage and to the highest ethical principles in our investment
practices.
Sincerely,
/s/ Judy A. Rice
Judy A. Rice, President
MoneyMart Assets, Inc.
1
<Page>
YOUR FUND'S PERFORMANCE
FUND OBJECTIVE
The investment objective of MONEYMART ASSETS, INC. (the Fund) is to seek maximum
current income consistent with stability of capital and the maintenance of
liquidity. There can be no assurance that the Fund will achieve its investment
objective.
The Fund is a diversified portfolio of high-quality, U.S. dollar-denominated
money market securities issued by the U.S. government and its agencies, and
major corporations and commercial banks of the United States and foreign
countries. Maturities can range from one day to 13 months. We only purchase
securities rated in one of the two highest rating categories by at least two
major rating agencies, or if not rated, deemed to be of equivalent quality by
our credit research staff.
<Table>
<Caption>
7-DAY NET ASSET WEIGHTED AVG. NET ASSETS
FUND FACTS as of 12/31/03 CURRENT YIELD VALUE (NAV) MATURITY (WAM) (MILLIONS)
Class A 0.49% $ 1.00 48 Days $ 5,089.4
Class Z* 0.62% $ 1.00 48 Days $ 187.7
iMoneyNet, Inc.
Taxable Prime Retail Avg.** 0.39% N/A 58 Days N/A
</Table>
Note: Yields will fluctuate from time to time, and past performance is not
indicative of future results. An investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
*Class Z shares are not subject to distribution and service (12b-1) fees.
**iMoneyNet, Inc. regularly reports a 7-day current yield and WAM on Tuesdays.
For purposes of this report, iMoneyNet, Inc. reported the 7-day current yield
and WAM on the last Monday of the reporting period. This is the data of all
funds in the iMoneyNet, Inc. Taxable Prime Retail Average category as of
December 29, 2003, the closest date to the end of our reporting period.
2
<Page>
[CHART]
MONEY MARKET FUND YIELD COMPARISON
<Table>
<Caption>
iMoneyNet, Inc.
MoneyMart Assets, Inc. Taxable Prime
(Class A shares) Retail Avg.
---------------------- ---------------
12/31/02 0.95 0.76
01/07/03 0.87 0.73
01/14/03 0.86 0.71
01/21/03 0.84 0.69
01/28/03 0.79 0.67
02/04/03 0.76 0.66
02/11/03 0.75 0.65
02/18/03 0.73 0.64
02/25/03 0.73 0.63
03/04/03 0.72 0.63
03/11/03 0.72 0.61
03/18/03 0.71 0.60
03/25/03 0.70 0.58
04/01/03 0.69 0.59
04/08/03 0.69 0.58
04/15/03 0.69 0.57
04/22/03 0.69 0.56
04/29/03 0.69 0.56
05/06/03 0.68 0.56
05/13/03 0.68 0.55
05/20/03 0.68 0.55
05/27/03 0.68 0.54
06/03/03 0.68 0.55
06/10/03 0.67 0.53
06/17/03 0.64 0.52
06/24/03 0.61 0.49
07/01/03 0.57 0.45
07/08/03 0.56 0.43
07/15/03 0.54 0.42
07/22/03 0.53 0.41
07/29/03 0.53 0.40
08/05/03 0.53 0.40
08/12/03 0.53 0.39
08/19/03 0.54 0.40
08/26/03 0.57 0.38
09/02/03 0.57 0.39
09/09/03 0.57 0.39
09/16/03 0.57 0.39
09/23/03 0.57 0.38
09/30/03 0.57 0.39
10/07/03 0.58 0.39
10/14/03 0.58 0.39
10/21/03 0.58 0.39
10/28/03 0.57 0.39
11/04/03 0.56 0.39
11/11/03 0.53 0.39
11/18/03 0.53 0.39
11/25/03 0.52 0.39
12/02/03 0.50 0.40
12/09/03 0.50 0.39
12/16/03 0.51 0.39
12/22/03 0.51 0.40
12/29/03 0.49 0.39
</Table>
[CHART]
WEIGHTED AVERAGE MATURITY COMPARISON
<Table>
<Caption>
iMoneyNet, Inc.
Taxable Prime
MoneyMart Assets, Inc. Retail Avg.
---------------------- ---------------
12/31/02 56 54
01/07/03 53 53
01/14/03 50 53
01/21/03 51 53
01/28/03 50 53
02/04/03 50 52
02/11/03 49 54
02/18/03 46 53
02/25/03 48 54
03/04/03 54 53
03/11/03 57 55
03/18/03 66 57
03/25/03 71 58
04/01/03 71 57
04/08/03 71 57
04/15/03 68 57
04/22/03 65 56
04/29/03 61 57
05/06/03 61 56
05/13/03 60 56
05/20/03 57 56
05/27/03 52 55
06/03/03 55 54
06/10/03 67 56
06/17/03 76 58
06/24/03 70 58
07/01/03 69 59
07/08/03 71 58
07/15/03 70 58
07/22/03 68 60
07/29/03 65 58
08/05/03 79 60
08/12/03 72 59
08/19/03 75 59
08/26/03 77 60
09/02/03 74 59
09/09/03 75 59
09/16/03 77 60
09/23/03 73 59
09/30/03 70 58
10/07/03 69 59
10/14/03 66 57
10/21/03 62 60
10/28/03 60 60
11/04/03 34 59
11/11/03 34 59
11/18/03 32 60
11/25/03 33 61
12/02/03 28 59
12/09/03 30 60
12/16/03 39 61
12/22/03 45 60
12/29/03 45 58
</Table>
Past performance is not indicative of future results. The graphs portray weekly
7-day current yields and weekly WAMs for MoneyMart Assets, Inc. (Class A shares
- - yields only) and the iMoneyNet, Inc. Taxable Prime Retail Average every
Tuesday from December 31, 2002 to December 29, 2003, the closest dates to the
beginning and end of our reporting period. Note: iMoneyNet, Inc. regularly
reports a 7-day current yield and WAM on Tuesdays. For purposes of this report,
iMoneyNet, Inc. reported the final 7-day current yield and WAM on the last
Monday of the reporting period. The data portrayed at the end of the reporting
period in the graph may not match the data portrayed in the Fund Facts table as
of December 31, 2003.
3
<Page>
INVESTMENT ADVISER'S REPORT
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
MEETING THE CHALLENGE POSED BY LOW INTEREST RATES IN 2003
Money market yields were volatile at low levels in 2003. This investment
environment reflected changing economic conditions in the United States, an
uncertain outlook for monetary policy, and geopolitical risks. Our approach to
security selection and interest-rate risk aimed to enhance the Fund's yields and
allow its shareholders easy access to their money. Throughout 2003, the Fund
provided competitive yields, and its NAV remained at $1.00 per share.
As an essential component of our investment strategy, we maintained a
diversified portfolio of high-quality, short-term debt securities of federal
agencies, banks, and corporations that spanned the range of money market
maturities. By altering this mix of securities, we adjusted the Fund's weighted
average maturity (WAM), which is expressed in days and takes into account the
maturity and quantity of each security held in the portfolio. WAM indicates the
portfolio's sensitivity to changes in interest rates.
For much of the first two months of 2003, the Fund's WAM was shorter than that
of its competitors as measured by the iMoneyNet, Inc. Taxable Prime Retail
Average. During this time, money market yields declined as financial markets
speculated that the Federal Reserve (the Fed) might cut short-term interest
rates later in the year in an effort to promote growth in the sluggish U.S.
economy.
In retrospect, at the beginning of the year, a longer-than-average WAM would
have better insulated the Fund's interest income from the impact of declining
yields. We repositioned the Fund's WAM significantly longer than average in
March and early April by investing in longer-term money market securities when
we believed it advantageous to do so. Our purchases were made as yields rose
temporarily due to the hope that a recently begun war in Iraq would end quickly.
This strategy benefited the Fund when the decline in money market yields resumed
in earnest during the spring amid renewed speculation that the Fed would lower
rates.
While some market participants expected rates to be reduced by half a percentage
point, we did not anticipate such an aggressive move. Therefore we avoided
significantly purchasing longer-term money market securities in May and early
June as yields continued to fall. Instead, our patience was rewarded when yields
rose amid disappointment that the Fed cut the interbank overnight lending rate
by only a quarter of a percentage point to 1% in late June. Yields also turned
higher in the summer of 2003 as signs of brisk economic growth led financial
markets to conclude that the Fed had finished its 2 1/2-year rate-cutting
campaign.
4
<Page>
FINDING ATTRACTIVE VALUE IN FEDERAL AGENCY SECURITIES
In late summer, we took advantage of what we believed to be an attractive
investment opportunity. The Federal Home Loan Mortgage Corporation (Freddie
Mac), a U.S. government-sponsored enterprise that buys mortgages and packages
them into mortgage-backed securities sold to investors, restated its earnings
higher because of accounting irregularities. As a result of this news, yield
spreads on Freddie Mac notes became generally tighter relative to corporate debt
issues with comparable maturities. This partly reflected uncertainty about how
Freddie Mac and the Federal National Mortgage Association (Fannie Mae) would be
regulated in the future to prevent such problems from recurring. We capitalized
on this window of opportunity by purchasing unsecured Freddie Mac and Fannie Mae
notes, which provided incremental yield that benefited the Fund.
In the autumn of 2003, we adjusted our strategy by selling longer-term money
market securities and focusing our purchases on securities with shorter maturity
dates. This reduced the Fund's interest-rate sensitivity and prepared the Fund
to accommodate an outflow of assets in late 2003 associated with a joint venture
between Prudential Securities Inc. and Wachovia Securities LLC. As the year drew
to a close, we took advantage of attractive investment opportunities that
typically emerge at year-end.
5
<Page>
This Page Intentionally Left Blank
<Page>
FINANCIAL STATEMENTS
DECEMBER 31, 2003 ANNUAL REPORT
MONEYMART ASSETS
<Page>
This Page Intentionally Left Blank
<Page>
PORTFOLIO OF INVESTMENTS
as of December 31, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
BANK NOTE 0.8%
American Express Centurion Bank
$ 40,000 1.09%, 1/26/04 $ 40,000,000
CERTIFICATES OF DEPOSIT--CANADIAN 3.5%
Canadian Imperial Bank of Commerce
184,000 1.09%, 1/8/04 184,000,000
CERTIFICATES OF DEPOSIT--DOMESTIC 7.7%
First Tennessee Bank NA
50,000 1.08%, 2/10/04 49,999,440
KBC Bank NV
110,000 1.09%, 2/23/04 109,999,192
Wells Fargo Bank NA
78,000 1.08%, 1/12/04 77,999,881
170,000 1.05%, 1/30/04 169,999,316
---------------
407,997,829
CERTIFICATES OF DEPOSIT--EURODOLLAR 1.9%
HBOS Treasury Services PLC
100,000 1.105%, 3/23/04 100,001,136
CERTIFICATES OF DEPOSIT--YANKEE 5.7%
Landesbank Hessen-Thuringren
67,000 1.075%, 1/5/04 66,999,798
Natexis Banque Populaires
85,000 1.10%, 3/17/04 85,001,789
Societe Generale NY
100,000 1.33%, 3/31/04 100,000,000
25,000 1.16%, 4/12/04 24,999,650
UBS AG
25,000 1.245%, 3/17/04 24,999,740
---------------
302,000,977
COMMERCIAL PAPER 57.0%
Aegon Funding Corp.
13,000 1.10%, 1/7/04 12,997,617
21,153 1.095%, 1/8/04 21,148,496
79,547 1.095%, 1/13/04 79,517,965
Alianz Finance Corp.
40,000 1.06%, 3/9/04 39,919,911
100,000 1.09%, 3/17/04 99,769,889
</Table>
See Notes to Financial Statements.
9
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
Alliance & Leicester PLC
$ 20,000 1.09%, 3/5/04 $ 19,961,244
Amsterdam Funding Corp.
34,879 1.09%, 1/15/04 34,864,215
50,000 1.10%, 1/20/04 49,970,972
40,000 1.09%, 1/21/04 39,975,778
17,843 1.09%, 1/22/04 17,831,655
20,499 1.09%, 1/26/04 20,483,483
Bear Stearns Co., Inc.
100,000 1.09%, 1/30/04 99,912,194
Bradford & Bingley Building PLC
45,000 1.10%, 1/8/04 44,990,375
Caisse Nationale Des Caisses
25,000 1.09%, 3/12/04 24,946,257
Citigroup Global Markets Holdings, Inc.
158,000 1.09%, 1/7/04 157,971,297
85,000 1.085%, 3/25/04 84,784,808
Den Norske Bank ASA
45,000 1.09%, 2/13/04 44,941,413
70,000 1.09%, 3/15/04 69,843,161
Edison Asset Securitization LLC
100,000 1.09%, 2/13/04 99,869,805
150,000 1.09%, 2/23/04 149,759,292
Falcon Asset Securitization Corp.
89,000 1.09%, 1/28/04 88,927,243
GE Capital International Funding
50,000 1.09%, 1/26/04 49,962,153
50,000 1.10%, 1/28/04 49,958,750
35,000 1.10%, 2/9/04 34,958,291
HBOS Treasury Services PLC
51,000 1.09%, 3/16/04 50,884,188
90,000 1.09%, 3/22/04 89,779,275
Independence Funding LLC
50,000 1.095%, 1/15/04 49,978,708
73,386 1.095%, 1/20/04 73,343,589
Long Lane Master Trust IV
25,049 1.10%, 1/30/04 25,026,804
3,315 1.12%, 2/17/04 3,310,153
Market Street Funding Corp.
58,000 1.10%, 1/29/04 57,950,378
Morgan Stanley Dean Witter Co.
150,000 1.09%, 1/26/04 149,886,458
</Table>
See Notes to Financial Statements.
10
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
Natexis Banques Populaires
$ 50,000 1.09%, 3/11/04 $ 49,894,028
New Center Asset Trust
26,000 1.10%, 2/25/04 25,956,306
Nordeutsche Landesbank Luxembourg
21,000 1.09%, 1/16/04 20,990,462
54,196 1.10%, 1/21/04 54,162,880
28,000 1.095%, 2/5/04 27,970,192
Preferred Receivables Funding Corp.
27,000 1.09%, 1/26/04 26,979,563
Prudential PLC
142,000 1.09%, 2/3/04 141,858,119
29,000 1.10%, 2/23/04 28,953,036
Schlumberger Technology Corp.
9,288 1.10%, 3/1/04 9,270,972
42,000 1.09%, 3/8/04 41,914,798
Sheffield Receivables Corp.
100,000 1.11%, 1/6/04 99,984,583
95,000 1.10%, 1/8/04 94,979,681
23,980 1.11%, 1/9/04 23,974,085
Stadshypotek Delaware, Inc.
100,000 1.09%, 3/23/04 99,751,722
50,000 1.10%, 3/23/04 49,874,722
Svenska Handelsbank, Inc.
53,000 1.09%, 2/10/04 52,935,811
Swiss RE Financial Products Corp.
61,000 1.10%, 1/29/04 60,947,811
Tulip Funding Corp.
35,009 1.09%, 1/12/04 34,997,340
8,573 1.10%, 1/20/04 8,568,023
Westpac Capital Corp.
55,000 1.115%, 5/27/04 54,749,590
Westpac Trust Securities New Zealand
60,175 1.14%, 6/4/04 59,879,641
---------------
3,006,019,182
LOAN PARTICIPATION 0.8%
Countrywide Home Loan, Inc.
42,000 1.15%, 1/23/04 42,000,000
</Table>
See Notes to Financial Statements.
11
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
MUNICIPAL BONDS 4.5%
Gulf Coast Wste. Disp. Auth. Texas Environ. Facs. Rev.,
ExxonMobil Proj.
$ 24,100 1.27%, 1/2/04(b) $ 24,100,000
Harris Cnty. Texas Hlth. Facs. Dev. Corp. Rev., St.
Lukes Episcopal Hosp., Ser. B
20,000 1.39%, 1/2/04(b) 20,000,000
New York City Transitional Fin. Auth., NYC Recov.,
Ser. 3-Subser. 3B
65,950 1.34%, 1/2/04(b) 65,950,000
NYC Recov., Ser. 3-Subser. 3H
10,900 1.28%, 1/2/04(b) 10,900,000
Port Auth. NY & NJ Spec. Oblig. Rev., Versatile Structure Oblig.,
Ser. 2
25,095 1.27%, 1/2/04(b) 25,095,000
Rhode Island St. Hlth. & Edl. Bldg. Corp. Rev., Hosp. Fin. Care New
England, Ser. A
16,400 1.33%, 1/4/04(b) 16,400,000
Sevier Cnty. Tennessee Pub. Bldg. Auth., Adj.-Loc.
Govt. Pub. Impvt., Ser. IV-1
14,115 1.34%, 1/2/04(b) 14,115,000
South Dakota St. Hlth. & Edl. Facs. Auth. Rev., Rapid City Reg.
Hosp.
14,900 1.32%, 1/2/04(b) 14,900,000
Valdez Alaska Marine Term. Rev.,
15,350 Exxon Pipeline Co., Proj. A 1.20%, 1/2/04(b) 15,350,000
Exxon Pipeline Co., Proj. B
33,250 1.20%, 1/2/04(b) 33,250,000
---------------
240,060,000
OTHER CORPORATE OBLIGATIONS 7.1%
American Express Credit Corp.
45,000 1.20%, 1/5/04(d) 45,000,000
General Electric Capital Assurance Co.
1.22875%, 7/22/04(c)(d)
49,000 (cost of $49,000,000, date purchased 7/17/03) 49,000,000
Goldman Sachs Group, Inc.
40,000 1.31%, 3/15/04(d) 40,000,000
Merrill Lynch & Co., Inc.
50,000 1.294%, 1/12/04(d) 50,000,000
</Table>
See Notes to Financial Statements.
12
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
Metropolitan Life Insurance Co.
1.2425%, 2/9/04(c)(d)
$ 23,000 (cost of $23,000,000, date purchased 2/5/03) $ 23,000,000
1.27%, 10/4/04(b)
53,000 (cost of $53,000,000, date purchased 9/26/02) 53,000,000
Morgan Stanley Dean Witter Co.
43,000 1.2825%, 1/15/04(b) 43,000,000
Pacific Life Insurance
1.29%, 10/15/04(c)(d)
38,000 (cost of $38,000,000, date purchased 7/1/03) 38,000,000
Travelers Insurance Co.
1.23%, 7/8/04(c)(d)
34,000 (cost of $34,000,000, date purchased 6/30/03) 34,000,000
---------------
375,000,000
U.S. GOVERNMENT AGENCY OBLIGATION 12.1%
Federal Home Loan Bank
66,145 3.75%, 4/15/04 66,614,419
125,000 1.23%, 7/6/04 125,000,000
Federal National Mortgage Assoc.
82,000 1.13%, 2/11/04 81,894,471
150,000 1.12%, 2/18/04 149,776,000
43,185 3.625%, 4/15/04 43,476,158
15,000 3.00%, 6/15/04 15,120,330
64,710 0.00%, 6/23/04 64,362,831
90,779 1.11%, 6/23/04 90,291,971
---------------
636,536,180
JOINT REPURCHASE AGREEMENT 0.1%
4,209 Joint Repurchase Agreement Account,
1.00%, dated 12/31/03 due 1/2/04 in the amount of $4,209,234
value of collateral including accrued interest was $4,292,957
(cost $4,209,000; Note 5) 4,209,000
---------------
TOTAL INVESTMENTS 101.2%
(AMORTIZED COST $5,337,824,304(a)) 5,337,824,304
Liabilities in excess of other assets (1.2%) (60,701,441)
---------------
NET ASSETS 100% $ 5,277,122,863
===============
</Table>
- ----------
(a) The cost of securities for federal income tax purposes is substantially the
same as for financial reporting purposes.
(b) Variable rate instrument. The maturity date presented for these instruments
is the later of the next date on which the security can be redeemed at par
or the next date on which the rate of interest is adjusted.
(c) Private placement restricted as to resale and does not have a readily
available market; the aggregate cost and value of such securities is
$197,000,000 and is approximately 3.7% of net assets.
(d) Floating Rate Security. The interest rate shown reflects the rate in effect
at December 31, 2003.
See Notes to Financial Statements.
13
<Page>
The industry classification of portfolio holdings and liabilites in excess of
other assets shown as a percentage of net assets as of December 31, 2003 was as
follows:
<Table>
Commercial Banks 37.4%
Asset Backed Securities 17.1
Federal Credit Agencies 12.1
Life Insurance 11.8
Security Brokers & Dealers 7.2
Fire, Marine, Casualty Insurance 5.8
Municipality 4.5
Short-Term Business Credit 2.5
Oil & Gas Field Service 1.0
Finance Services 0.9
Mortgage Bankers 0.8
Joint Repurchase Agreement Participant 0.1
Liabilities in excess of other assets (1.2)
-----
100.0%
=====
</Table>
See Notes to Financial Statements.
14
<Page>
STATEMENT OF ASSETS AND LIABILITIES
as of December 31, 2003
<Table>
ASSETS
Investments, at amortized cost which approximates market value $ 5,337,824,304
Cash 129,446
Receivable for Fund shares sold 29,605,663
Interest receivable 3,695,936
Prepaid expenses 168,056
------------------
TOTAL ASSETS 5,371,423,405
------------------
LIABILITIES
Payable for Fund shares reacquired 89,658,678
Accrued expenses 2,531,799
Management fee payable 1,455,273
Distribution fee payable 583,034
Dividends payable 71,758
------------------
TOTAL LIABILITIES 94,300,542
------------------
NET ASSETS $ 5,277,122,863
==================
Net assets were comprised of:
Common stock, at par ($.001 par value; 15 billion shares
authorized for issuance) $ 5,277,123
Paid-in capital in excess of par 5,271,845,740
------------------
NET ASSETS DECEMBER 31, 2003 $ 5,277,122,863
==================
CLASS A:
Net asset value, offering price and redemption price per share
($5,089,405,268 DIVIDED BY 5,089,405,268 shares of common stock
issued and outstanding) $ 1.00
==================
CLASS Z:
Net asset value, offering price and redemption price per share
($187,717,595 DIVIDED BY 187,717,595 shares of common stock issued
and outstanding) $ 1.00
==================
</Table>
See Notes to Financial Statements.
15
<Page>
STATEMENT OF OPERATIONS
Year Ended December 31, 2003
<Table>
NET INVESTMENT INCOME
Income
Interest $ 83,997,990
==================
Expenses
Management fee 20,301,632
Distribution fee--Class A 8,169,668
Transfer agent's fees and expenses 11,582,000
Custodian's fees and expenses 414,000
Registration fees 221,000
Reports to shareholders 180,000
Insurance 150,000
Legal fees and expenses 72,000
Director's fees and expenses 53,000
Audit fees 38,000
Miscellaneous 24,561
------------------
TOTAL EXPENSES 41,205,861
------------------
Net investment income 42,792,129
------------------
NET REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 1,064,877
------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 43,857,006
==================
</Table>
See Notes to Financial Statements.
16
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
--------------------------------------
INCREASE (DECREASE) IN NET ASSETS 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 42,792,129 $ 97,338,104
Net realized gain on investment transactions 1,064,877 6,719
----------------- -----------------
Net increase in net assets resulting from operations 43,857,006 97,344,823
----------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
Class A (42,332,082) (93,026,987)
Class Z (1,524,924) (4,317,836)
----------------- -----------------
(43,857,006) (97,344,823)
----------------- -----------------
FUND SHARE TRANSACTIONS (NOTE 4) (AT $1.00 PER SHARE)
Proceeds from shares sold 22,027,286,713 24,452,898,431
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions 40,036,556 94,275,800
Cost of shares reacquired (23,921,012,672) (24,129,854,631)
----------------- -----------------
Net increase (decrease) in net assets from Fund share transactions (1,853,689,403) 417,319,600
----------------- -----------------
Total increase (decrease) (1,853,689,403) 417,319,600
NET ASSETS
Beginning of year 7,130,812,266 6,713,492,666
----------------- -----------------
End of year $ 5,277,122,863 $ 7,130,812,266
================= =================
</Table>
See Notes to Financial Statements.
17
<Page>
NOTES TO FINANCIAL STATEMENTS
MoneyMart Assets, Inc. (the "Fund"), formerly Prudential MoneyMart Assets, Inc.
is registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The Fund invests primarily in a
portfolio of money market instruments maturing in thirteen months or less whose
ratings are within the two highest rating categories by a nationally recognized
statistical rating organization or, if not rated, are of comparable quality. The
ability of the issuers of the securities held by the Fund to meet their
obligations may be affected by economic developments in a specific industry or
region.
NOTE 1. ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITIES VALUATIONS: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium. If the amortized cost
method is determined not to represent fair value, the fair value shall be
determined by or under the direction of the Board of Directors.
SECURITIES TRANSACTIONS AND NET INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains (losses) on sales of securities are
calculated on the identified cost basis. Interest income, including amortization
of premium and accretion of discount on debt securities, as required, is
recorded on the accrual basis.
Net investment income (loss) (other than distribution fees, which are charged
directly to the respective class) and realized gains (losses) are allocated
daily to each class of shares based upon the relative proportion of net assets
of each class at the beginning of the day.
REPURCHASE AGREEMENTS: In connection with transactions in repurchase agreements
with United States financial institutions, it is the Fund's policy that its
custodian or designated subcustodians under triparty repurchase agreements, as
the case may be, take possession of the underlying collateral securities, the
value of which exceeds the principal amount of the repurchase transactions,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked to market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Fund may be delayed or limited.
18
<Page>
LOAN PARTICIPATIONS: The Fund may invest in loan participations. When the Fund
purchases a loan participation, the Fund typically enters into a contractual
relationship with the lender or third party selling such participations
("Selling Participant"), but not the borrower. As a result, the Fund assumes the
credit risk of the borrower, the selling participant and any other persons
interpositioned between the Fund and the borrower ("intermediate participants").
The Fund may not directly benefit from the collateral supporting the senior loan
in which it has purchased the loan participation.
FEDERAL INCOME TAXES: For federal income tax purposes, it is the Fund's policy
to continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its taxable net income
and capital gains, if any, to shareholders. Therefore, no federal income tax
provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Fund declares daily dividends from net
investment income and net realized short-term capital gains. Payment of
dividends is made monthly. Income distributions and capital gain distributions
are determined in accordance with federal income tax regulations which differ
from generally accepted accounting principles.
ESTIMATES: The preparation of the financial statements requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS
The Fund has a management agreement with Prudential Investments LLC ("PI").
Pursuant to this agreement, PI has responsibility for all investment advisory
services and supervises the subadvisor's performance of such services. PI has
entered into a subadvisory agreement with Prudential Investment Management, Inc.
("PIM"). The subadvisory agreement provides that PIM will furnish investment
advisory services in connection with the management of the Fund. In connection
therewith, PIM is obligated to keep certain books and records of the Fund. PI
pays for the services of PIM, the cost of compensation of officers of the Fund,
occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears
all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly, at an
annual rate of .50 of 1% of the Fund's average daily net assets up to $50
million and .30 of 1% of the Fund's average daily net assets in excess of $50
million.
The Fund has a distribution agreement with Prudential Investment Management
Services LLC ("PIMS"), which acts as the distributor of the Class A and Z shares
of the
19
<Page>
Fund. The Fund compensates PIMS for distributing and servicing the Fund's Class
A shares pursuant to the plan of distribution at an annual rate of .125 of 1% of
the average daily net assets of the Class A shares. The Class A distribution fee
is accrued daily and payable monthly. No distribution or service fees are paid
to PIMS as distributor of the Class Z shares of the Fund.
PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential
Financial, Inc. ("Prudential").
NOTE 3. OTHER TRANSACTIONS WITH AFFILIATES
Prudential Mutual Fund Services LLC ("PMFS"), an affiliate of PI and an
indirect, wholly-owned subsidiary of Prudential, serves as the Fund's transfer
agent. During the year ended December 31, 2003 the Fund incurred fees of
approximately $11,514,340 for the services of PMFS. As of December 31, 2003,
approximately $847,900 of such fees were due to PFMS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket and
sub-transfer agent expenses paid to non-affiliates, where applicable.
NOTE 4. CAPITAL
The Fund offers Class A and Class Z shares. Class Z shares are not subject to
any distribution and/or service fees and are offered exclusively for sale to a
limited group of investors.
There are 15 billion authorized shares of $.001 par value common stock divided
into two classes, which consist of 13 billion Class A and 2 billion Class Z
shares.
Transactions in shares of common stock (at $1 net asset value per share) were as
follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
--------------------------------------
2003 2002
----------------- -----------------
CLASS A
Shares sold $ 21,933,775,126 $ 23,911,022,067
Shares issued in reinvestment of dividends and distributions 38,512,438 89,950,769
Shared reacquired (23,813,111,496) (23,511,503,799)
----------------- -----------------
Net increase (decrease) in shares outstanding $ (1,840,823,932) $ 489,469,037
================= =================
CLASS Z
Shares sold $ 93,511,587 $ 541,876,364
Shares issued in reinvestment of dividends and distributions 1,524,118 4,325,031
Shared reacquired (107,901,176) (618,350,832)
----------------- -----------------
Net increase (decrease) in shares outstanding $ (12,865,471) $ (72,149,437)
================= =================
</Table>
20
<Page>
NOTE 5. JOINT REPURCHASE AGREEMENT ACCOUNT
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. As of December 31, 2003, the
Fund had a 1.75% undivided interest in the joint account. The undivided interest
for the Fund represents $4,209,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefore were as
follows:
Bank of America Securities LLC, 0.98%, in the principal amount of $25,634,000,
repurchase price $25,635,396, dated 12/31/03 due 1/2/04. The value of the
collateral including accrued interest was $26,146,680.
Greenwich Capital Market, 1.01%, in the principal amount of $75,000,000,
repurchase price $75,004,208, dated 12/31/03 due 1/2/04. The value of the
collateral including accrued interest was $76,501,470.
JP Morgan Chase Securities, Inc., 1.00%, in the principal amount of $65,000,000,
repurchase price $65,003,611, dated 12/31/03 due 1/2/04. The value of the
collateral including accrued interest was $66,300,359.
UBS Securities, 1.00%, in the principal amount of $75,000,000, repurchase price
$75,004,167, dated 12/31/03 due 1/2/04. The value of the collateral including
accrued interest was $76,503,568.
NOTE 6. DISTRIBUTIONS AND TAX INFORMATION
Distributions to shareholders, which are determined in accordance with federal
income tax regulations and which may differ from generally accepted accounting
principles, are recorded on the ex-dividend date. In order to present
undistributed net investment income, accumulated net realized capital gains
(losses) and paid-in capital on the Statement of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, undistributed net investment income and accumulated net
realized gains on investments. For the year ended December 31, 2003, the
adjustment was to decrease accumulated net realized gains and increase
undistributed net investment income by $1,064,877 for distribution of realized
gains.
For the years ended December 31, 2003 and December 31, 2002, the tax character
of dividends paid, $43,857,006 and $97,344,823, respectively, as reflected in
the Statement of Changes in Net Assets, was ordinary income.
21
<Page>
NOTE 7. REORGANIZATION
The Fund has historically served as a mechanism for investing excess cash
balances from Prudential Securities, Inc. customer accounts. During fiscal 2003,
the Fund was notified that it would no longer be utilized in such a manner. As a
result, it is expected that net assets will decline significantly. Even after
the reorganization described below, it is expected that the Fund's combined net
assets will be significantly lower than the current level.
On November 18, 2003, the Board of Directors of the Fund approved an Agreement
and Plan of Reorganization which provided for the transfer of all assets and
assumption of all liabilities of Class A, B, C, and Z shares of the Special
Money Market Fund, Inc. for Class A, B, C and Z shares of the Fund,
respectively. As part of the reorganization, the Fund will commence offering
Class B and C shares.
22
<Page>
FINANCIAL STATEMENTS
DECEMBER 31, 2003 ANNUAL REPORT
MONEYMART ASSETS
<Page>
<Table>
<Caption>
CLASS A
------------------
YEAR ENDED
DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income and net realized gains 0.006
Dividends and distributions to shareholders (0.006)
------------------
Net asset value, end of year $ 1.000
==================
TOTAL RETURN(a): .65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 5,089,405
Average net assets (000) $ 6,535,734
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .62%
Expenses, excluding distribution and service (12b-1) fees .49%
Net investment income .63%
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
See Notes to Financial Statements.
24
<Page>
<Table>
<Caption>
CLASS A
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income and net realized gains 0.013 0.037 0.058 0.046
Dividends and distributions to shareholders (0.013) (0.037) (0.058) (0.046)
------------ ------------ ------------ ------------
Net asset value, end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============
TOTAL RETURN(a): 1.35% 3.85% 5.94% 4.69%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 6,930,229 $ 6,440,760 $ 6,529,282 $ 6,393,586
Average net assets (000) $ 6,947,463 $ 6,846,656 $ 6,538,256 $ 6,292,031
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .61% .65% .67% .68%
Expenses, excluding distribution and service (12b-1) fees .48% .52% .54% .55%
Net investment income 1.34% 3.76% 5.81% 4.60%
</Table>
See Notes to Financial Statements.
25
<Page>
<Table>
<Caption>
CLASS Z
------------------
YEAR ENDED
DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income and net realized gains 0.008
Dividends and distributions to shareholders (0.008)
------------------
Net asset value, end of year $ 1.000
==================
TOTAL RETURN(a): .77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 187,718
Average net assets (000) $ 198,143
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .49%
Expenses, excluding distribution and service (12b-1) fees .49%
Net investment income .75%
</Table>
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
See Notes to Financial Statements.
26
<Page>
<Table>
<Caption>
CLASS Z
---------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2003
---------------------------------------------------------------
2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income and net realized gains 0.015 0.039 0.059 0.047
Dividends and distributions to shareholders (0.015) (0.039) (0.059) (0.047)
------------ ------------ ------------ ------------
Net asset value, end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============
TOTAL RETURN(a): 1.48% 3.98% 6.07% 4.82%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 200,583 $ 272,733 $ 253,173 $ 259,529
Average net assets (000) $ 291,473 $ 283,850 $ 267,611 $ 227,112
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .48% .52% .54% .55%
Expenses, excluding distribution and service (12b-1) fees .48% .52% .54% .55%
Net investment income 1.48% 3.84% 5.95% 4.74%
</Table>
See Notes to Financial Statements.
27
<Page>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of MoneyMart Assets, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of MoneyMart Assets, Inc., formerly
Prudential MoneyMart Assets, Inc., (the "Fund") at December 31, 2003, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2003 by correspondence with the
custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP New York, New York February 20, 2004
28
<Page>
FEDERAL INCOME TAX INFORMATION
(Unaudited)
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders. Please be advised that 2.79% of the dividends paid from
ordinary income in the fiscal year ended December 31, 2003 qualify for each of
these states' tax exclusion.
In addition, the fund utilized redemptions as distributions in the amount of
$0.000016 per share of ordinary income and $0.000106 per share of long-term
capital gains.
In January 2004, you will be advised on IRS Form 1099 DIV or substitute 1099 DIV
as to the federal tax status of the distributions received by you in calendar
year 2003.
29
<Page>
MANAGEMENT OF THE FUND
(Unaudited)
Information pertaining to the Trustees of the Fund is set forth below. Trustees
who are not deemed to be "interested persons" of the Fund as defined in the
Investment Company Act of 1940, as amended (the 1940 Act) are referred to as
"Independent Trustees." Trustees who are deemed to be "interested persons" of
the Fund are referred to as "Interested Trustees." "Fund Complex" consists of
the Fund and any other investment companies managed by Prudential Investments
LLC (PI).
INDEPENDENT DIRECTORS**
DELAYNE DEDRICK GOLD (65), Director since 1983*** Oversees 88 portfolios in Fund
complex
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): Marketing Consultant (1982-present);
formerly Senior Vice President and member of the Board of Directors, Prudential
Bache Securities, Inc.
ROBERT E. LA BLANC (69), Director since 1996*** Oversees 77 portfolios in Fund
complex
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): President (since 1981) of Robert E. La
Blanc Associates, Inc. (telecommunications); formerly General Partner at Salomon
Brothers and Vice-Chairman of Continental Telecom; Trustee of Manhattan College.
OTHER DIRECTORSHIPS HELD:**** Director of Storage Technology Corporation
(technology) (since 1979); Chartered Semiconductor Ltd. (Singapore) (since
1998); Titan Corporation (electronics) (since 1995); Computer Associates
International, Inc. (since 2002) (Software Company); FiberNet Telecom Group,
Inc. (since 2003) (telecom company); Director (since 1999) of First Financial
Fund, Inc. and Director (since April 1999) of The High Yield Plus Fund, Inc.
ROBIN B. SMITH (64), Director since 1996*** Oversees 69 portfolios in Fund
complex
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): Chairman of the Board (since
January 2003) of Publishers Clearing House (Direct Marketing), formerly Chairman
and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing
House.
OTHER DIRECTORSHIPS HELD:**** Director of BellSouth Corporation (since 1992).
STEPHEN STONEBURN (60), Director since 1996*** Oversees 75 portfolios in Fund
complex
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): President and Chief Executive Officer
(since June 1996) of Quadrant Media Corp. (a publishing company); formerly
President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice
President and Managing Director (January 1993-1995) of Cowles Business Media and
Senior Vice President of Fairchild Publications, Inc. (1975-1989).
CLAY T. WHITEHEAD (65), Director since 1999*** Oversees 94 Portfolios in Fund
complex
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): President (since 1983) of National
Exchange Inc. (new business development firm).
OTHER DIRECTORSHIPS HELD:**** Director (since 2000) of The High Yield Plus Fund,
Inc.
30
<Page>
INTERESTED DIRECTORS**
ROBERT F. GUNIA* (57), Vice President and Director since 1996*** Oversees 179
Portfolios in Fund complex
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): Executive Vice President and Chief
Administrative Officer (since June 1999) of PI; Executive Vice President and
Treasurer (since January 1996) of PI; President (since April 1999) of Prudential
Investment Management Services LLC (PIMS); Corporate Vice President (since
September 1997) of the Prudential Insurance Company of America (Prudential);
Executive Vice President and Chief Administrative Officer (since May 2003) of
American Skandia Investment Services, Inc. and American Skandia Advisory
Services, Inc.; Executive Vice President (since March 1999) and Treasurer (since
May 2000) of Prudential Mutual Fund Services LLC; formally Senior Vice President
(March 1987-May 1999) of Prudential Securities Incorporated (Prudential
Securities).
OTHER DIRECTORSHIPS HELD:**** Vice President and Director (since May 1989) and
Treasurer (since 1989) of The Asia Pacific Fund, Inc.
Information pertaining to the officers of the Company who are not Directors is
set forth below.
OFFICERS**
JUDY A. RICE (56), President since 2003*** Oversees 95 Portfolios in Fund
complex.
PRINCIPAL OCCUPATIONS (DURING PAST 5 YEARS): President, Chief Executive Officer,
Chief Operating Officer and Officer-In-Charge (since 2003) of PI; Director,
Officer-In-Charge, President, Chief Executive Officer and Chief Operating
Officer (since May 2003) of American Skandia Advisory Services, Inc. and
American Skandia Investment Services, Inc.; Director, Officer-In-Charge,
President, Chief Executive Officer (since May 2003) of American Skandia Fund
Services, Inc.; Vice President (since February 1999) of Prudential Investment
Management Services LLC; President, Chief Executive Officer and
Officer-In-Charge (since April 2003) of Prudential Mutual Fund Services LLC;
formerly various positions to Senior Vice President (1992-1999) of Prudential
Securities; and various positions to Managing Director (1975-1992) of Solomon
Smith Barney; Member of Board of Governors of the Money Management Institute.
GRACE C. TORRES (44), Treasurer and Principal Financial and Accounting Officer
since 1996***
PRINCIPAL OCCUPATIONS (DURING PAST 5 YEARS): Senior Vice President (since
January 2000) of PI; Senior Vice President and Assistant Treasurer (since May
2003) of American Skandia Investment Services, Inc. and American Skandia
Advisory Services, Inc. formerly First Vice President (December 1996-January
2000) of PI; and First Vice President (March 1993-1999) of Prudential
Securities.
JONATHAN D. SHAIN (45), Secretary since 2001***
Vice President and Corporate Counsel (since August 1996) of Prudential; Vice
President and Assistant Secretary (since May 2003) of American Skandia
Investment Services, Inc. and American Skandia Fund Services, Inc. formerly
Attorney with Fleet Bank, N.A. (January 1997-July 1998).
See Notes to Financial Statements
31
<Page>
MARGUERITE E.H. MORRISON (47), Chief Legal Officer since 2003 and Assistant
Secretary since 2002.***
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): Vice President and Chief Legal
Officer--Mutual Funds and Unit Investment Trusts (since August 2000) of
Prudential; Senior Vice President, and Assistant Secretary (since February 2001)
of PI; Senior Vice President and Secretary (since May 2003) of American Skandia
Investment Services, Inc., American Skandia Advisory Services, Inc., and
American Skandia Fund Services, Inc.; 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 Prudential Securities.
MARYANNE RYAN (39), Anti-Money Laundering Compliance Officer since 2002.***
PRINCIPAL OCCUPATIONS (LAST 5 YEARS): Vice President, Prudential (since November
1998), First Vice President, Prudential Securities (March 1997-May 1998);
Anti-Money Laundering Compliance Officer (since 2003) of American Skandia
Investment Services, Inc., American Skandia Advisory Services, Inc. and American
Skandia Marketing, Inc.
* "Interested" Director, as defined in the 1940 Act, by reason of employment
with the Manager (Prudential Investments LLC), the Subadviser (Prudential
Investment Management, Inc.) or the Distributor (Prudential Investment
Management Services LLC).
** Unless otherwise noted, the address of the Directors and officers is c/o:
Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street,
Newark, NJ 07102.
*** There is no set term of office for Directors and officers. The Independent
Directors have adopted a retirement policy, which calls for the retirement
of Directors on December 31 of the year in which they reach the age of 75.
The table shows the number of years for which they have served as Director
and/or officer.
**** This row includes only directorships of companies required to register, or
file reports with the SEC under the Securities and Exchange Act of 1934
(that is, "public companies") or other investment companies registered
under the 1940 Act.
Additional information about the Fund's Directors is included in the Fund's
Statement of Additional Information which is available without charge, upon
request, by calling (800) 225-1852 or (732) 482-7555 (Calling from outside the
U.S.)
32
<Page>
- - MAIL - TELEPHONE - WEBSITE
Gateway Center Three (800) 225-1852 www.jennisondryden.com
100 Mulberry Street
Newark, NJ 07102
DIRECTORS
Delayne Dedrick Gold-Robert F. Gunia-Robert E. La Blanc-Robin B. Smith-Stephen
D. Stoneburn- Clay T. Whitehead
OFFICERS
Judy A. Rice, PRESIDENT-Robert F. Gunia, VICE PRESIDENT-Grace C. Torres,
TREASURER AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER-Marguerite E.H.
Morrison, CHIEF LEGAL OFFICER AND ASSISTANT SECRETARY Jonathan D. Shain,
SECRETARY-Maryanne Ryan, ANTI-MONEY LAUNDERING COMPLIANCE OFFICER
<Table>
MANAGER Prudential Investments LLC Gateway Center
Three
100 Mulberry Street
Newark, NJ 07102
INVESTMENT ADVISER Prudential Investment Gateway Center Two
Management, Inc.
100 Mulberry Street
Newark, NJ 07102
DISTRIBUTOR Prudential Investment Gateway Center
Management Services LLC Three
14th Floor
100 Mulberry
Street
Newark, NJ 07102
CUSTODIAN State Street Bank One Heritage Drive
and Trust Company North Quincy, MA
02171
TRANSFER AGENT Prudential Mutual Fund PO Box 8098
Services LLC Philadelphia, PA
19101
INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 1177 Avenue of the
Americas
New York, NY 10036
FUND COUNSEL Sullivan & Cromwell LLP 125 Broad Street
New York, NY 10004
</Table>
MoneyMart Assets, Inc.
<Table>
<Caption>
SHARE CLASS A Z
NASDAQ PBMXX PMZXX
CUSIP 60936A308 60936A407
</Table>
MUTUAL FUNDS:
<Table>
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED
GOVERNMENT AGENCY BY ANY BANK OR ANY BANK AFFILIATE
</Table>
<Page>
MoneyMart Assets, Inc.
<Table>
<Caption>
SHARE CLASS A Z
NASDAQ PBMXX PMZXX
CUSIP 60936A308 60936A407
</Table>
MF108E IFS-A087701
<Page>
SEMIANNUAL REPORT
DECEMBER 31, 2003
SPECIAL MONEY MARKET FUND, INC.
FUND TYPE
Money market
OBJECTIVE
High current income consistent with the preservation of principal and liquidity
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.
<Page>
Dear Shareholder,
February 23, 2004
As you may know, the mutual fund industry recently has been the subject of much
media attention. As president of Special Money Market Fund, Inc., I'd like to
provide you with an update on the issues as they pertain to your fund.
Regulators and government authorities have requested information regarding
trading practices from many mutual fund companies across the nation. Our fund
family has been cooperating with inquiries it has received, and at the same
time, Prudential Financial, Inc. has been conducting its own internal review.
This review encompasses the policies, systems, and procedures of our fund
family, Prudential Financial's investment units and its proprietary distribution
channels. The review also includes mutual fund trading activity by investment
professionals who manage our funds.
MARKET TIMING
The frequent trading of shares in response to short-term fluctuations in the
market is known as "market timing". When market timing occurs in violation of a
fund's prospectus, in certain circumstances, a fund may have to sell portfolio
securities to have the cash necessary to redeem the market timer's shares. The
redemption may happen when it is not advantageous to sell securities and result
in harming the fund's performance and/or subject the fund to additional
transaction costs.
Prudential Investments LLC, the Fund's investment manager, has actively
discouraged market timing and for years our mutual fund prospectuses have
identified and addressed this issue. Prudential Investments has established
operating policies and procedures that are designed to detect and deter frequent
trading activities that would be disruptive to the management of our mutual fund
portfolios, and has rejected numerous orders placed by market timers in the
past.
<Page>
LATE TRADING
The Securities and Exchange Commission requires that orders to purchase or
redeem mutual fund shares be received either by the fund or by an intermediary
(such as a broker, financial adviser, or 401(k) record keeper) before the time
at which the fund calculates its net asset value (normally 4:00 p.m., Eastern
time) if they are to receive that day's price. The policies of our mutual funds
do not make and have not made allowances for the practice known as "late
trading".
For more than 40 years we have offered investors quality investment products,
financial guidance, and responsive customer service. Today we remain committed
to this heritage and to the highest ethical principles in our investment
practices.
Sincerely,
/s/ Judy Rice
Judy A. Rice, President
Special Money Market Fund, Inc.
1
<Page>
Your Fund's Performance
FUND OBJECTIVE
The investment objective of SPECIAL MONEY MARKET FUND, INC. (the Fund) is high
current income consistent with the preservation of principal and liquidity.
There can be no assurance that the Fund will achieve its investment objective.
<Table>
<Caption>
7-DAY NET ASSET WEIGHTED AVG. NET ASSETS
FUND FACTS AS OF 12/31/03 CURRENT YIELD VALUE (NAV) MATURITY (WAM) (MILLIONS)
Class A 0.19% $ 1.00 82 Days $ 3
Class B* 0.32% $ 1.00 82 Days $ 5
Class C* 0.32% $ 1.00 82 Days $ 1
Class B/C* 0.32% $ 1.00 82 Days $ 152
Class Z* 0.32% $ 1.00 82 Days $ 3
iMoneyNet, Inc.
Taxable Prime Retail Avg.** 0.39% N/A 58 Days N/A
</Table>
Note: Yields will fluctuate from time to time, and past performance is not
indicative of future results. An investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
* Class B, C, B/C, and Z shares are not subject to distribution and service
(12b-1) fees.
** iMoneyNet, Inc. regularly reports a 7-day current yield and WAM on
Tuesdays. For purposes of this report, iMoneyNet, Inc. reported the final
7-day current yield and WAM on the last Monday of the reporting period.
This is the data of all funds in the iMoneyNet, Inc. Taxable Prime Retail
Average category as of December 29, 2003, the closest date to the end of
our reporting period.
2
<Page>
[CHART]
MONEY MARKET FUND YIELD COMPARISON
<Table>
<Caption>
Special Money iMoneyNet, Inc.
Market Fund, Inc. - Taxable Prime
Class B/C Retail Avg.
------------------- ---------------
06/24/03 0.22 0.49
07/01/03 0.19 0.45
07/08/03 0.28 0.43
07/15/03 0.27 0.42
07/22/03 0.23 0.41
07/29/03 0.22 0.40
08/05/03 0.22 0.40
08/12/03 0.31 0.39
08/19/03 0.35 0.40
08/26/03 0.33 0.38
09/02/03 0.34 0.39
09/09/03 0.37 0.39
09/16/03 0.36 0.39
09/23/03 0.35 0.38
09/30/03 0.37 0.39
10/07/03 0.33 0.39
10/14/03 0.33 0.39
10/21/03 0.32 0.39
10/28/03 0.33 0.39
11/04/03 0.35 0.39
11/11/03 0.36 0.39
11/18/03 0.37 0.39
11/25/03 0.35 0.39
12/02/03 0.35 0.40
12/09/03 0.32 0.39
12/16/03 0.32 0.39
12/22/03 0.33 0.40
12/29/03 0.33 0.39
</Table>
[CHART]
WEIGHTED AVERAGE MATURITY COMPARISON
<Table>
<Caption>
iMoneyNet, Inc.
Special Money Taxable Prime
Market Fund, Inc. Retail Avg.
----------------- ---------------
06/24/03 54 58
07/01/03 66 59
07/08/03 63 58
07/15/03 61 58
07/22/03 69 60
07/29/03 70 58
08/05/03 78 60
08/12/03 74 59
08/19/03 74 59
08/26/03 79 60
09/02/03 80 59
09/09/03 76 59
09/16/03 78 60
09/23/03 80 59
09/30/03 82 58
10/07/03 80 59
10/14/03 80 57
10/21/03 82 60
10/28/03 81 60
11/04/03 80 59
11/11/03 80 59
11/18/03 80 60
11/25/03 77 61
12/02/03 75 59
12/09/03 72 60
12/16/03 80 61
12/22/03 83 60
12/29/03 80 58
</Table>
Past performance is not indicative of future results. The graphs portray weekly
7-day current yields and weekly WAMs for Special Money Market Fund, Inc. (Class
B/C shares - yields only), and the iMoneyNet, Inc. Taxable Prime Retail Average
every Tuesday from June 24, 2003 to December 29, 2003, the closest dates to the
beginning and end of our reporting period. Note: iMoneyNet, Inc. regularly
reports a 7-day current yield and WAM on Tuesdays. For purposes of this report,
iMoneyNet, Inc. reported the final 7-day current yield and WAM on the last
Monday of the reporting period. The data portrayed at the end of the reporting
period in the graphs may not match the data portrayed in the Fund Facts table as
of December 31, 2003.
3
<Page>
This Page Intentionally Left Blank
<Page>
PORTFOLIO OF INVESTMENTS
as of December 31, 2003 (Unaudited)
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
BANK NOTES 5.5%
American Express Centurion Bank
$ 4,000 1.111%, 1/29/04(a) $ 3,999,870
JP Morgan Chase & Co.
5,000 1.285%, 2/5/04(a) 5,000,598
---------------
9,000,468
CERTIFICATES OF DEPOSIT - YANKEE 12.3%
BNP Paribas
2,000 1.15%, 7/22/04 1,999,889
Danske Bank
2,000 1.29%, 10/18/04 1,999,840
Nordea Bank of Finland PLC
7,000 1.08%, 2/4/04 6,999,841
Royal Bank of Scotland PLC
4,000 1.35%, 4/19/04 4,000,000
Unicredito Italiano SpA
5,000 1.08%, 4/5/04 5,000,000
---------------
19,999,570
COMMERCIAL PAPER 29.8%
Alliance & Leicester PLC
3,500 1.09%, 3/12/04 3,492,476
Amsterdam Funding Corp.
1,020 1.09%, 1/15/04 1,019,568
Anz (Delaware), Inc.
2,500 1.10%, 1/12/04 2,499,160
Cargill Global Fund PLC
5,000 1.09%, 2/13/04 4,993,490
Danske Corp.
1,100 1.10%, 2/24/04 1,098,185
1,000 1.13%, 2/25/04 998,319
Falcon Asset Securitization Corp.
2,754 1.10%, 2/3/04 2,751,223
HBOS Treasury Services PLC
4,100 1.10%, 3/19/04 4,090,228
Long Lane Master Trust IV
6,125 1.10%, 1/30/04 6,119,573
Nationwide Building Society
3,400 1.11%, 3/9/04 3,392,936
</Table>
See Notes to Financial Statements
5
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
New Center Asset Trust
$ 1,000 1.10%, 2/25/04 $ 998,319
Nyala Funding LLC
1,000 1.16%, 2/18/04 998,453
Preferred Receivables Funding Corp.
1,000 1.09%, 1/26/04 999,243
Thunder Bay Funding, Inc.
1,225 1.07%, 1/15/04 1,224,490
4,000 1.10%, 2/12/04 3,994,867
Triple A One Funding Corp.
1,026 1.13%, 1/13/04 1,025,614
Volkswagen of America
4,045 1.10%, 1/22/04 4,042,404
Windmill Funding Corp.
5,000 1.08%, 2/6/04 4,994,599
---------------
48,733,147
LOAN PARTICIPATION 0.6%
Countrywide Home Loan, Inc.
1,000 1.15%, 1/30/04 1,000,000
OTHER CORPORATE OBLIGATIONS 27.0%
American Express Credit Corp.
2,000 1.20%, 1/5/04(a) 2,000,000
Associates Corp. of North America
1,475 5.50%, 2/15/04 1,482,239
Caterpillar Financial Services Corp.
1,000 1.33%, 2/4/04(a) 1,000,037
First Union Corp.
4,500 6.625%, 6/15/04 4,610,577
General Electric Capital Assurance Corp.
1.229%, 1/22/04(a)(b)
2,000 (cost $2,000,000; purchased 7/17/03) 2,000,000
General Electric Capital Corp.
6,000 1.23%, 1/19/05(a) 6,000,000
Goldman Sachs Group, Inc.
8,000 1.313%, 3/15/04(a) 8,000,000
Merrill Lynch & Co., Inc.
3,000 5.70%, 2/6/04 3,013,201
5,000 1.294%, 1/12/04(a) 5,000,000
</Table>
See Notes to Financial Statements
6
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT (000) DESCRIPTION VALUE (NOTE 1)
Metropolitan Life Insurance Co.
1.27%, 1/2/04(a)(b)
$ 2,000 (cost $2,000,000; purchased 10/01/03) $ 2,000,000
Morgan Stanley Dean Witter Co.
5,000 1.283%, 1/15/04(a) 5,000,000
National City Bank
2,000 1.269%, 1/12/04(a) 2,001,196
Pacific Life Insurance Co.
1,000 1.288%, 3/15/04(a) 1,000,000
Wal Mart Stores, Inc.
1,040 7.50%, 5/15/04 1,064,314
---------------
44,171,564
U.S. GOVERNMENT AGENCY OBLIGATION 19.6%
Federal Home Loan Banks
4,000 1.25%, 7/2/04 4,000,000
Federal Home Loan Mortgage Corp.
3,000 1.43%, 9/3/04 3,000,000
Federal National Mortgage Assoc.
4,000 1.01%, 2/4/04 3,996,184
1,000 5.625%, 5/14/04 1,016,146
1,405 0.00%, 5/28/04 1,397,953
1,000 6.50%, 8/15/04 1,032,568
3,000 1.30%, 8/30/04 2,997,022
3,500 1.47%, 9/22/04 3,500,000
3,000 1.50%, 9/24/04 2,999,794
4,000 1.35%, 10/22/04 4,000,000
4,000 1.43%, 11/15/04 4,000,000
---------------
31,939,667
REPURCHASE AGREEMENT 8.1%
Joint Repurchase Agreement Account
1.00%, dated 12/31/03 due 1/2/04
in the amount of $13,269,737 value
of collateral including accrued
interest $13,269,000
13,269 (cost $13,269,000; Note 5) 13,269,000
---------------
TOTAL INVESTMENTS 102.9%
(AMORTIZED COST $168,113,416)(c) 168,113,416
Liabilities in excess of other assets (2.9%) (4,748,013)
---------------
NET ASSETS 100% $ 163,365,403
===============
</Table>
See Notes to Financial Statements
7
<Page>
- ----------
(a) Variable rate instrument. The maturity date presented for these instruments
is the later of the next date on which the security can be redeemed at par
or the next date on which the rate of interest is adjusted.
(b) Private placement restricted as to resale and does not have a readily
available market; the aggregate cost of such securities is $4,000,000, and
is approximately 2.4% of net assets.
(c) The cost basis for federal income tax purposes is substantially the same as
that used for financial statement purposes.
The industry classification of portfolio holdings and liabilities in excess of
other assets shown as a percentage of net assets as of December 31, 2003 was as
follows:
<Table>
<Caption>
Commercial Bank 25.4%
Federal Credit Agencies 19.5
Asset-Backed Securities 14.8
Security Brokers & Dealers 12.8
Joint Repurchase Agreement Participant 8.1
Bank Holding Companies--Domestic 5.9
Short-Term Business Credit 3.7
Grain Mills Products 3.1
Life Insurance 3.1
Motor Vehicle 2.5
Finance Services 1.2
Personal Credit 0.9
Variety Stores 0.7
Construction Machinery & Equipment 0.6
Mortgage Bankers 0.6
-----
102.9
Liabilities in excess of other assets (2.9)
-----
100.0%
=====
</Table>
See Notes to Financial Statements
8
<Page>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2003 SEMI-ANNUAL REPORT
SPECIAL MONEY MARKET FUND, INC.
MONEY MARKET SERIES
<Page>
STATEMENT OF ASSETS AND LIABILITIES
as of December 31, 2003 (Unaudited)
<Table>
ASSETS
Investments, at amortized cost which approximates market value $ 168,113,416
Cash 20,017
Receivable for Series shares sold 482,901
Interest receivable 375,478
Prepaid expenses 6,253
------------------
TOTAL ASSETS 168,998,065
------------------
LIABILITIES
Payable for investments purchased 5,000,000
Payable for Series shares reacquired 455,550
Accrued expenses 105,286
Management fee payable 70,878
Dividends payable 676
Distribution fee payable 272
------------------
TOTAL LIABILITIES 5,632,662
------------------
NET ASSETS $ 163,365,403
==================
Net assets were comprised of:
Common stock, $0.001 par value per share $ 163,365
Paid-in capital in excess of par 163,202,038
------------------
NET ASSETS, DECEMBER 31, 2003 $ 163,365,403
==================
</Table>
See Notes to Financial Statements
10
<Page>
<Table>
CLASS A
Net asset value, offering price and redemption price per share ($2,804,844
DIVIDED BY 2,804,844 shares of common stock issued and outstanding) $ 1.00
==========
CLASS B
Net asset value, offering price and redemption price per share ($4,656,447
DIVIDED BY 4,656,447 shares of common stock issued and outstanding) $ 1.00
==========
CLASS C
Net asset value, offering price and redemption price per share ($1,083,261
DIVIDED BY 1,083,261 shares of common stock issued and outstanding) $ 1.00
==========
CLASS B/C
Net asset value, offering price and redemption price per share ($151,877,827
DIVIDED BY 151,877,827 shares of common stock issued and outstanding) $ 1.00
==========
CLASS Z
Net asset value, offering price and redemption price per share ($2,943,024
DIVIDED BY 2,943,024 shares of common stock issued and outstanding) $ 1.00
==========
</Table>
See Notes to Financial Statements
11
<Page>
STATEMENT OF OPERATIONS
Six Months Ended December 31, 2003 (Unaudited)
<Table>
NET INVESTMENT INCOME
Income
Interest and discount earned $ 1,121,082
--------------
Expenses
Management fee 473,230
Distribution fee 1,797
Transfer agent's fees and expenses 159,000
Reports to shareholders 51,000
Custodian's fees and expenses 49,000
Registration fees 45,000
Legal fees and expenses 20,000
Audit fee 11,000
Directors' fees 5,000
Insurance expense 2,000
Miscellaneous 1,876
--------------
TOTAL EXPENSES 818,903
--------------
Net investment income 302,179
--------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 454
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 302,633
==============
</Table>
See Notes to Financial Statements
12
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS YEAR
ENDED ENDED
DECEMBER 31, 2003 JUNE 30, 2003
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income $ 302,179 $ 2,048,921
Net realized gain on investment transactions 454 5,996
----------------- -----------------
Net increase in net assets resulting from operations 302,633 2,054,917
----------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
Class A (2,807) (16,465)
Class B (8,680) (23,153)
Class C (3,491) (9,756)
Class B/C (283,167) (1,995,994)
Class Z (4,488) (9,549)
----------------- -----------------
(302,633) (2,054,917)
----------------- -----------------
FUND SHARE TRANSACTIONS (AT $1.00 PER SHARE) (NOTE 4)
Proceeds from shares sold 46,096,535 236,444,840
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions 271,791 1,838,509
Cost of shares reacquired (89,412,410) (257,976,620)
----------------- -----------------
Net decrease in net assets from Series share transactions (43,044,084) (19,693,271)
----------------- -----------------
Total decrease (43,044,084) (19,693,271)
NET ASSETS
Beginning of period 206,409,487 226,102,758
----------------- -----------------
End of period $ 163,365,403 $ 206,409,487
================= =================
</Table>
See Notes to Financial Statements
13
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Special Money Market Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company
consisting of only the Money Market Series (the "Series"). Investment operations
of the Series commenced on January 22, 1990.
The investment objective of the Series is high current income consistent with
the preservation of principal and liquidity. The Series invests in a diversified
portfolio of high quality money market securities maturing in 13 months or less.
The ability of issuers of securities held by the Series to meet their
obligations may be affected by economic developments in a specific industry or
region.
NOTE 1. ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITIES VALUATION: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium. If the amortized cost
method is determined not to represent fair value, the value shall be determined
by or under the direction of the Board of Directors.
The Fund may hold up to 10% of its net assets in illiquid securities, including
those which are restricted as to disposition under securities law ("restricted
securities"). The restricted security held by the Fund at December 31, 2003
includes registration rights under which the Fund may demand registration by the
issuer. Restricted securities, sometimes referred to as private placements, are
valued pursuant to the valuation procedures noted above.
SECURITIES TRANSACTIONS AND NET INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains (losses) on sales of securities are
calculated on the identified cost basis. The Fund amortizes premiums and
accretes discounts on purchases of portfolio securities as adjustments to
interest income. Interest income is recorded on the accrual basis.
14
<Page>
Net investment income (loss) (other than distribution fees, which are charged
directly to the respective class) and realized gains (losses) are allocated
daily to each class of shares based upon the relative proportion of net assets
of each class at the beginning of the day.
REPURCHASE AGREEMENTS: In connection with transactions in repurchase agreements
with United States financial institutions, it is the Fund's policy that its
custodian or designated subcustodians under triparty repurchase agreements, as
the case may be, take possession of the underlying collateral securities, the
value of which exceeds the principal amount of the repurchase transactions,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked to market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Fund may be delayed or limited.
FEDERAL INCOME TAXES: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income and capital gains, if any, to
its shareholders. Therefore, no federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Fund declares daily dividends from net
investment income and net realized short-term capital gains. Payment of
dividends is made monthly. Income distributions and capital gain distributions
are determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
ESTIMATES: The preparation of the financial statements requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS
The Fund has a management agreement with Prudential Investments LLC ("PI" or
"Manager"). Pursuant to a subadvisory agreement between PI and Prudential
Investment Management, Inc. ("PIM" or "Subadviser"), PIM furnishes investment
advisory services in connection with the management of the Fund. Under the
subadvisory agreement, PIM, subject to the supervision of PI, is responsible for
managing the assets of the Fund in accordance with its investment objective and
policies. PI pays for the services of PIM, the cost of compensation of officers
of the
15
<Page>
Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund
bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly at an
annual rate of .50% of the average daily net assets of the Fund.
The Fund has a distribution agreement with Prudential Investment Management
Services LLC ("PIMS"), which acts as the distributor of the Class A, Class B,
Class C, Class B/C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A shares, pursuant to a plan of
distribution (the "Class A Plan"), regardless of expenses actually incurred by
it. The distribution fees are accrued daily and payable monthly. No distribution
or service fees are paid to PIMS as distributor of the Class B, Class C, Class
B/C and Class Z shares of the Fund.
Pursuant to the Class A Plan, the Fund compensates PIMS for distribution-related
activities at an annual rate of up to .125 of 1% of the average daily net assets
of Class A for the year ended December 31, 2003.
PI, PIM and PIMS are indirect wholly-owned subsidiaries of Prudential Financial,
Inc. ("Prudential").
NOTE 3. OTHER TRANSACTIONS WITH AFFILIATES
Prudential Mutual Fund Services LLC ("PMFS"), an affiliate of PI and an indirect
wholly-owned subsidiary of Prudential, serves as the Fund's transfer agent.
During the six months ended December 31, 2003, the Fund incurred fees of
approximately $109,900 for the services of PMFS. As of December 31, 2003,
approximately $17,000 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to non-affiliates.
The Fund pays networking fees to affiliated and unaffiliated broker/dealers.
These networking fees are payments made to broker/dealers that clear mutual fund
transactions through a national clearing system. The Fund incurred approximately
$8,800 in total networking fees, of which the amount relating to the services of
Wachovia Securities LLC ("Wachovia"), was approximately $8,700 for the six
months ended December 31, 2003. These amounts are included in transfer agent's
fees and expenses in the Statement of Operations.
16
<Page>
NOTE 4. CAPITAL
The Series offers Class A, Class B, Class C, Class B/C and Class Z shares.
Prior to September 9, 2002 investors who held either Class B or Class C shares
in the Strategic Partners funds who wished to exchange their shares for shares
of the Funds received Class B/C shares of the Fund. Class B/C shares of the Fund
have no front-end or back-end sales charges, and carry no 12b-1 fee. Effective
September 9, 2002 investors who held Class B shares of any of the Strategic
Partners funds who wish to exchange into the Fund will receive Class B shares of
the Fund. Similarly, investors who held Class C shares of any of the Strategic
Partners funds will receive Class C of the Fund. Class B and Class C shares of
the Fund, like Class B/C, have no front-end or back-end charges, and carry no
12b-1 Fees.
The Strategic Partners investors who held Class B/C shares through September 9,
2002 have been grandfathered and will continue to hold those shares until they
redeem.
The Fund has authorized two billion shares of beneficial interest at $.001 par
value.
Transactions in shares of common stock (at $1 per share) were as follows:
<Table>
<Caption>
SHARES AND
DOLLAR AMOUNT
-----------------
CLASS A
Six Months ended December 31, 2003:
Shares sold $ 5,941,130
Shares issued in reinvestment of dividends and distributions 2,495
Shares reacquired (5,713,026)
-----------------
Net increase (decrease) in shares outstanding $ 230,599
=================
Year ended June 30, 2003:
Shares sold $ 3,649,440
Shares issued in reinvestment of dividends and distributions 14,864
Shares reacquired (3,254,307)
-----------------
Net increase (decrease) in shares outstanding $ 409,997
=================
</Table>
17
<Page>
<Table>
<Caption>
SHARES AND
DOLLAR
AMOUNT
-----------------
CLASS B
Six Months ended December 31, 2003:
Shares sold $ 4,567,266
Shares issued in reinvestment of dividends and distributions 8,142
Shares reacquired (5,926,639)
-----------------
Net increase (decrease) in shares outstanding $ (1,351,231)
=================
September 9, 2002(a) through June 30, 2003:
Shares sold $ 10,155,015
Shares issued in reinvestment of dividends and distributions 18,199
Shares reacquired (4,165,536)
-----------------
Net increase (decrease) in shares outstanding $ 6,007,678
=================
CLASS C
Six Months ended December 31, 2003:
Shares sold $ 2,375,888
Shares issued in reinvestment of dividends and distributions 3,275
Shares reacquired (3,478,664)
-----------------
Net increase (decrease) in shares outstanding $ (1,099,501)
=================
September 9, 2002(a) through June 30, 2003:
Shares sold $ 7,002,202
Shares issued in reinvestment of dividends and distributions 8,299
Shares reacquired (4,827,739)
-----------------
Net increase (decrease) in shares outstanding $ 2,182,762
=================
CLASS B/C
Six Months ended December 31, 2003:
Shares sold $ 32,548,812
Shares issued in reinvestment of dividends and distributions 253,348
Shares reacquired (74,054,096)
-----------------
Net increase (decrease) in shares outstanding $ (41,251,936)
=================
Year ended June 30, 2003:
Shares sold $ 212,997,652
Shares issued in reinvestment of dividends and distributions 1,787,535
Shares reacquired (244,951,348)
-----------------
Net increase (decrease) in shares outstanding $ (30,166,161)
=================
</Table>
18
<Page>
<Table>
<Caption>
SHARES AND
DOLLAR AMOUNT
-----------------
CLASS Z
Six months ended December 31, 2003:
Shares sold $ 663,439
Shares issued in reinvestment of dividends and distributions 4,531
Shares reacquired (239,985)
-----------------
Net increase (decrease) in shares outstanding $ 427,985
=================
Year ended June 30, 2002:
Shares sold $ 2,640,531
Shares issued in reinvestment of dividends and distributions 9,612
Shares reacquired (777,690)
-----------------
Net increase (decrease) in shares outstanding $ 1,872,453
=================
</Table>
- ----------
(a) Commencement of offering of Class B and Class C shares.
NOTE 5. JOINT REPURCHASE AGREEMENT ACCOUNT
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. As of December 31, 2003, the
Fund had a 6.2% undivided interest in the joint account. The undivided interest
for the Fund represents $13,269,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefor were as
follows:
JP Morgan Chase Securities, Inc., 1.00%, in the principal amount of $65,000,000,
repurchase price $65,003,611, due 1/2/04. The value of the collateral including
accrued interest was $66,300,359.
Greenwich Capital Market, 1.01%, in the principal amount of $75,000,000,
repurchase price $75,004,208, due 1/2/04. The value of the collateral including
accrued interest was $76,501,470.
UBS Securities, 1.00%, in the principal amount of $75,000,000, repurchase price
$75,004,167, due 1/2/04. The value of the collateral including accrued interest
was $76,503,568.
19
<Page>
FINANCIAL HIGHLIGHTS
(Unaudited)
<Table>
<Caption>
CLASS A
-----------------
SIX MONTHS
ENDED
DECEMBER 31, 2003
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
-----------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains .001
Dividends and distributions to shareholders (.001)
-----------------
Net asset value, end of period $ 1.00
=================
TOTAL RETURN(a): .10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,805
Average net assets (000) $ 2,859
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .99%(c)
Expenses, excluding distribution and service (12b-1) fees .86%(c)
Net investment income .20%(c)
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods of
less than a full year are not annualized.
(b) Commencement of offering of Class A shares.
(c) Annualized.
See Notes to Financial Statements
20
<Page>
<Table>
<Caption>
CLASS A
- -------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30, JANUARY 26, 2001
(b)
THROUGH
2003 2002 JUNE 30, 2001
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
---------------- ----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains .007 .019 .018
Dividends and distributions to shareholders (.007) (.019) (.018)
---------------- ----------------- -----------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
================ ================= =================
TOTAL RETURN(a): .71% 1.98% 1.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,574 $ 2,164 $ 1,681
Average net assets (000) $ 2,474 $ 2,082 $ 276
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .91% .87% .83%(c)
Expenses, excluding distribution and service (12b-1) fees .78% .74% .70%(c)
Net investment income .66% 1.87% 4.23%(c)
</Table>
See Notes to Financial Statements
21
<Page>
<Table>
<Caption>
CLASS B CLASS B
----------------- ---------------------
SIX MONTHS SEPTEMBER 9, 2002 (b)
ENDED THROUGH
DECEMBER 31, 2003 JUNE 30, 2003
- -------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
----------------- ---------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains 0.002 .006
Dividends and distributions to shareholders (0.002) (.006)
----------------- ---------------------
Net asset value, end of period $ 1.00 $ 1.000
================= =====================
TOTAL RETURN(a): .16% .64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 4,656 $ 6,008
Average net assets (000) $ 5,293 $ 4,394
Ratios to average net assets:(c)
Expenses, including distribution and service (12b-1) fees .86% .78%
Expenses, excluding distribution and service (12b-1) fees .86% .78%
Net investment income .32% .65%
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods of
less than a full year are not annualized.
(b) Commencement of offering of Class B shares. (See Note 4).
(c) Annualized.
See Notes to Financial Statements
22
<Page>
<Table>
<Caption>
CLASS C CLASS C
----------------- --------------------
SEPTEMBER 9, 2002 (b)
SIX MONTHS ENDED THROUGH
DECEMBER 31, 2003 JUNE 30, 2003
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
----------------- --------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains 0.002 .006
Dividends and distributions to shareholders (0.002) (.006)
----------------- --------------------
Net asset value, end of period $ 1.00 $ 1.00
================= ====================
TOTAL RETURN(a): .16% .64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period(000) $ 1,083 $ 2,183
Average net assets (000) $ 2,127 $ 1,811
Ratios to average net assets:(c)
Expenses, including distribution and service (12b-1) fees .86% .78%
Expenses, excluding distribution and service (12b-1) fees .86% .78%
Net investment income .32% .67%
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods of
less than a full year are not annualized.
(b) Commencement of offering of Class C shares. (See Note 4).
(c) Annualized.
See Notes to Financial Statements
23
<Page>
<Table>
<Caption>
CLASS B/C
-----------------
SIX MONTHS ENDED
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
-----------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains 0.002
Dividends and distributions to shareholders (0.002)
-----------------
Net asset value, end of period $ 1.00
=================
TOTAL RETURN(a): .16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 151,878
Average net assets (000) $ 175,231
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .86%(b)
Expenses, excluding distribution and service (12b-1) fees .86%(b)
Net investment income .32%(b)
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods of
less than a full year are not annualized.
(b) Annualized.
See Notes to Financial Statements
24
<Page>
<Table>
<Caption>
CLASS B/C
-----------------------------------------------------------------------
YEAR ENDED JUNE 30,
-----------------------------------------------------------------------
2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains .008 .020 .054 .052 .047
Dividends and distributions to shareholders (.008) (.020) (.054) (.052) (.047)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
TOTAL RETURN(a): .84% 2.11% 5.63% 5.32% 4.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 193,130 $ 223,296 $ 263,196 $ 229,247 $ 320,524
Average net assets (000) $ 236,506 $ 246,999 $ 252,744 $ 308,237 $ 330,135
Ratios to average net assets:
Expenses, including distribution and
service (12b-1) fees .78% .74% .70% .68% .65%
Expenses, excluding distribution and
service (12b-1) fees .78% .74% .70% .68% .65%
Net investment income .84% 2.11% 5.36% 5.17% 4.71%
</Table>
See Notes to Financial Statements
25
<Page>
<Table>
<Caption>
CLASS Z
-----------------
SIX MONTHS
ENDED
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
-----------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains .002
Dividends and distributions to shareholders (.002)
-----------------
Net asset value, end of period $ 1.00
=================
TOTAL RETURN(a): .16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,943
Average net assets (000) $ 2,754
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .86%(e)
Expenses, excluding distribution and service (12b-1) fees .86%(e)
Net investment income .32%(e)
</Table>
- ----------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods of less than a
full year are not annualized.
(b) Commencement of offering of Class Z shares.
(c) Ratios presented above have been annualized from the date of the first
subscription which occurred on June 7, 2001.
(d) Figure is actual and not rounded to nearest thousand.
(e) Annualized.
See Notes to Financial Statements
26
<Page>
<Table>
<Caption>
CLASS Z
------------------------------------------------
JANUARY 26, 2001
(b)
YEAR ENDED JUNE 30, THROUGH
2003 2002 JUNE 30, 2001
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
------------ ------------ ----------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income and net realized gains .008 .014 .001
Dividends and distributions to shareholders (.008) (.014) (.001)
------------ ------------ ----------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
============ ============ ================
TOTAL RETURN(a): .84% 1.43% .08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 2,515 $ 643 $ 50(d)
Average net assets (000) $ 1,419 $ 83 $ 50(d)
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .78% .74% .70%(c)
Expenses, excluding distribution and service (12b-1) fees .78% .74% .70%(c)
Net investment income .67% 1.27% 2.43%(c)
</Table>
See Notes to Financial Statements
27
<Page>
SPECIAL MONEY MARKET FUND
SUPPLEMENTAL PROXY INFORMATION
(Unaudited)
A Special Meeting of Shareholders was held on July 2, 2003, and adjourned to
July 24, 2003 and further adjourned to August 8, 2003. At such meetings the
shareholders approved the following proposals:
1)* To approve the election of ten (10) directors to the Board of
Directors, as follows:
- David E.A. Carson
- Robert E. La Blanc
- Robert F. Gunia
- Douglas H. McCorkindale
- Stephen P. Munn+
- Richard A. Redeker
- Judy A. Rice
- Robin B. Smith
- Stephen Stoneburn
- Clay T. Whitehead
The result of the proxy solicitation on the preceding matter was:
<Table>
<Caption>
VOTES VOTES VOTES
MATTER FOR AGAINST WITHHELD ABSTENTIONS
- --------------------------- ----------- ------- --------- -----------
David E.A. Carson 144,825,472 -- 7,159,290 --
Robert E. La Blanc 144,749,930 -- 7,234,832 --
Robert F. Gunia 144,790,487 -- 7,194,275 --
Douglas H. McCorkindale 144,819,993 -- 7,164,769 --
Stephen P. Munn+ 144,832,429 -- 7,152,333 --
Richard A. Redeker 144,859,533 -- 7,125,229 --
Judy A. Rice 144,681,021 -- 7,303,741 --
Robin B. Smith 144,682,716 -- 7,302,046 --
Stephen Stoneburn 144,860,552 -- 7,124,210 --
Clay T. Whitehead 144,799,973 -- 7,184,789 --
</Table>
- ----------
+ Mr. Munn ceased being a director effective November 30, 2003.
28
<Page>
2)* To Permit the Manager to Enter into, or make material changes to,
Subadvisory Agreements without shareholder approval.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
112,758,334 14,195,298 4,927,078
</Table>
3)* To Permit an amendment to the Management Contract Between PI and the
Company.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
135,770,251 10,535,148 5,679,363
</Table>
4a)* To approve changes to fundamental investment restrictions or policies,
relating to: fund diversification.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
117,619,227 9,690,288 4,571,145
</Table>
4b)* To approve changes to fundamental investment restrictions or policies,
relating to: issuing senior securities, borrowing money or pledging
assets.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
115,398,238 11,714,696 4,767,776
</Table>
4c)* To approve changes to fundamental investment restrictions or policies,
relating to: buying and selling real estate.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
117,292,938 10,026,590 4,561,182
</Table>
4d)* To approve changes to fundamental investment restrictions or policies,
relating to: buying and selling commodities and commodity contracts.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
116,630,284 10,648,297 4,602,129
</Table>
4e)* To approve changes to fundamental investment restrictions or policies,
relating to: fund concentration.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
116,634,069 10,041,164 5,205,477
</Table>
4f)* To approve changes to fundamental investment restrictions or policies,
relating to: making loans.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
115,645,095 11,385,874 4,849,741
</Table>
29
<Page>
4g)* To approve changes to fundamental investment restrictions or policies,
relating to: other investment restrictions, including investing in
securities of other investment companies.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
115,897,887 10,801,993 5,180,830
</Table>
5)** To approve amendments to the Company's Articles of Incorporation.
<Table>
<Caption>
FOR AGAINST ABSTAIN
- ---------------------- ---------------------- ----------------------
117,328,171 9,719,371 4,833,168
</Table>
* Approved at the July 2, 2003 meeting.
** Approved at the August 8, 2003 meeting.
30
<Page>
- - MAIL - TELEPHONE - WEBSITE
Gateway Center Three (800) 225-1852 www.jennisondryden.com
100 Mulberry Street www.strategicpartners.com
Newark, NJ 07102
DIRECTORS
David E.A. Carson-Robert F. Gunia-Robert E. La Blanc-Douglas H.
McCorkindale-Richard A. Redeker-Judy A. Rice-Robin B. Smith-Stephen D.
Stoneburn-Clay T. Whitehead
OFFICERS
Judy A. Rice, PRESIDENT-Robert F. Gunia, VICE PRESIDENT-Grace C. Torres,
TREASURER AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER-Marguerite E.H.
Morrison, CHIEF LEGAL OFFICER AND ASSISTANT Secretary-Jonathan D. Shain,
SECRETARY-Maryanne Ryan, ANTI-MONEY LAUNDERING COMPLIANCE OFFICER
<Table>
MANAGER Prudential Gateway Center
Investments LLC Three
100 Mulberry Street
Newark, NJ 07102
INVESTMENT ADVISER Prudential Investment Gateway Center Two
Management, Inc. 100 Mulberry Street
Newark, NJ 07102
DISTRIBUTOR Prudential Investment Gateway Center Three
Management Services LLC 14th Floor
100 Mulberry Street
Newark, NJ 07102
CUSTODIAN State Street Bank and One Heritage Drive
Trust Company North Quincy,
MA 02171
TRANSFER AGENT Prudential Mutual Fund PO Box 8098
Services LLC Philadelphia, PA 19101
INDEPENDENT AUDITORS KPMG LLP 757 Third Avenue
New York, NY 10017
FUND COUNSEL Sullivan & Cromwell LLP 125 Broad Street
New York, NY 10004
</Table>
Special Money Market Fund, Inc.
<Table>
<Caption>
SHARE CLASS A B C B/C Z
Nasdaq N/A N/A N/A PBSXX N/A
CUSIP 84741P102 84741P508 84741P607 84741P201 84741P300
</Table>
MUTUAL FUNDS:
<Table>
ARE NOT INSURED BY THE FDIC OR ANY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY
FEDERAL GOVERNMENT AGENCY ANY BANK OR ANY BANK AFFILIATE
</Table>
<Page>
Special Money Market Fund, Inc.
<Table>
<Caption>
SHARE CLASS A B C B/C Z
Nasdaq N/A N/A N/A PBSXX N/A
CUSIP 84741P102 84741P508 84741P607 84741P201 84741P300
</Table>
MF141E2 IFS-AO87913
<Page>
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
As permitted by Sections 17(h) and (i) of the Investment Company Act of
1940, as amended (the 1940 Act), and pursuant to Article VII of the Fund's
Amended By-Laws (Exhibit (b) to the Registration Statement), the Registrant
shall indemnify present and former officers, directors, employees and agents of
the Registrant against judgments, fines, settlements and expenses and may
advance expenses to such parties to the fullest extent authorized, and in the
manner permitted, by applicable federal and state law. Section 2-418 of Maryland
General Corporation Law permits indemnification of directors unless it is
established that (1) the act or omission of the director was material to the
matter and (a) was committed in bad faith or (b) was the result of active and
deliberate dishonesty; or (2) the director actually received an improper
personal benefit in money, property or services; or (3) in the case of a
criminal proceeding, the director has reasonable cause to believe that the act
or omission was unlawful. As permitted by Section 17(i) of the 1940 Act,
pursuant to Section 10 of the Distribution Agreement (Exhibit (e)(1) to the
Registration Statement), Prudential Investment Management Services LLC or the
Registrant may be indemnified against liabilities which it may incur, except
liabilities arising from bad faith, gross negligence, willful misfeasance or
reckless disregard of duties.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the Securities Act), may be permitted to directors,
officers and controlling persons of the Registrant and the principal underwriter
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission (the
Commission) such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant and the principal underwriter in connection with the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person or the principal
underwriter in connection with the shares being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Section 9 of the Management Agreement (Exhibit (d)(1) to the Registration
Statement) limits the liability of Prudential Investments LLC (PI) to losses
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36 (b)(3) of the 1940 Act) or
losses resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard by PI of its obligations
and duties under the Management Agreement. Section 4 of the Subadvisory
Agreement (Exhibit (d)(2) to the Registration Statement) limits the liability of
Prudential Investment Management, Inc. (PIM) to losses resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
from reckless disregard by PIM of its obligations and duties under the
Subadvisory Agreement.
The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Commission under the 1940 Act so long as the interpretation of Sections 17(h)
and 17(i) of such Act remains in effect and is consistently applied.
The Registrant maintains an insurance policy insuring its officers and
directors against certain liabilities and certain costs of defending claims
against such officers and directors, to the extent such officers and directors
are not found to have committed conduct constituting conflict of interest,
intentional non-compliance with statutes or regulations or dishonesty,
fraudulent or criminal acts or omissions. The insurance policy also insures the
Registrant against the costs of indemnification payments to officers and
directors under certain circumstances.
ITEM 16. EXHIBITS.
(1) (a) Articles of Restatement of Articles of Incorporation,
incorporated by reference to Exhibit 1 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(b) Articles of Amendment dated July 7, 2003 incorporated by
reference to Exhibit (a)(2) to Post-Effective Amendment No. 41 to
the Registration Statement on Form N-1A (2-55301) filed via EDGAR
on December 31, 2003.
(c) Articles Supplementary dated December 4, 2003 incorporated
by reference to Exhibit (a)(3) to Post-Effective Amendment No. 41
to the Registration Statement on Form N-1A (2-55301) filed via
EDGAR on December 31, 2003.
(2) By-Laws, as Amended and Restated November 18, 1999, incorporated
by reference to Exhibit (b) to Post-Effective Amendment No. 38 to
the Registration Statement on Form N-1A (2-55301) filed via EDGAR
on February 28, 2001.
(3) Not Applicable.
(4) Agreement and Plan of Reorganization (filed herewith as
Attachment A to the Proxy Statement and Prospectus).
C-1
<Page>
(5) (a) Form of stock certificate, incorporated by reference to
Exhibit 4(a) to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 27, 1997.
(b) Instruments defining rights of shareholders incorporated by
reference to Exhibits (1) and (2).
(6) (a) Management Agreement between the Registrant and Prudential
Mutual Fund Management, incorporated by reference to Exhibit 5(a)
to Post-Effective Amendment No. 33 to the Registration Statement
on Form N-1A (2-55301) filed via EDGAR on February 27, 1997.
(b) Subadvisory Agreement between Prudential Mutual Fund
Management and The Prudential Investment Corporation,
incorporated by reference to Exhibit 5(b) to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(c) Amendment to Subadvisory Agreement between Prudential
Investments Fund Management LLC and The Prudential Investment
Corporation, incorporated by reference to Exhibit (d)(iii) to
Post-Effective Amendment No. 37 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on February 29, 2000.
(7) (a) Distribution Agreement between the Registrant and Prudential
Investment Management Services LLC, incorporated by reference to
Exhibit (e)(ii) to Post-Effective Amendment No. 37 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 28, 2000.
(b) Form of Dealer Agreement, incorporated by reference to
Exhibit (e)(iii) to Post-Effective Amendment No. 37 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 28, 2000.
(8) Not Applicable.
(9) (a) Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit 8 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(b) Amendment to Custodian Contract dated February 22, 1999,
incorporated by reference to Exhibit (g)(ii) to Post-Effective
Amendment No. 38 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 28, 2001.
(c) Amendment to Custodian Contract dated July 17, 2001,
incorporated by reference to Exhibit (g)(3) to Post-Effective
Amendment No. 39 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 14, 2002.
(d) Amendment to Custodian Contract dated January 17, 2002,
incorporated by reference to Exhibit (g)(4) to Post-Effective
Amendment No. 39 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 14, 2002.
(10) (a) Amended and Restated Distribution and Service Plan of
Registrant, incorporated by reference to Exhibit (m)(ii) to
Post-Effective Amendment No. 37 to the Registration Statement
on Form N-1A (2-55301) filed via EDGAR on February 28, 2000.
(b) Amended and Restated Rule 18f-3 Plan dated November 19,
2003 incorporated by reference to Exhibit (n) to Post-Effective
Amendment No. 41 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on December 31, 2003.
(11) Opinion and Consent of Piper Rudnick LLP Incorporate by
reference to Exhibit 11 to Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-14 filed via EDGAR on
June 4, 2004.
(12) Opinion and Consent of Sullivan & Cromwell LLP regarding tax
matters to be filed by amendment.
(13) Not Applicable.
(14) Consent of independent registered public accountants Incorporated
by reference to Pre-Effective Amendment No. 2 to the Registration
Statement on Form N-14 filed via EDGAR on June 4, 2004.
(15) Not Applicable
(16) Powers of attorney dated May 23, 2001, incorporated by reference
to Exhibit (q) to Post-Effective Amendment No. 39 to the
Registration Statement on Form N1-A (2-53301) filed via EDGAR on
February 14, 2002.
(17) (a) Registrant's Rule 24f-2 Notice pursuant to Rule 24f-2 under
the Investment Company Act of 1940, for its fiscal year ended
November 30, 2002, incorporated by reference to Form 24f-2 filed
with the Securities and Exchange Commission on January 17, 2003.
(b) Form of Proxy (filed herewith).
C-2
<Page>
ITEM 17. UNDERTAKINGS
1. The Registrant agrees that prior to any public reoffering of the
securities registered through the use of the prospectus which is a part of this
registration statement on Form N-14 by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
the reoffering prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
2. The undersigned Registrant agrees that every prospectus that is filed
under paragraph 1 above will be filed as part of an amendment to this
registration statement on Form N-14 and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act of
1933, each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona fide offering of them.
C-3
<Page>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement
has been signed on behalf of the Registrant in the City of Newark, and State
of New Jersey, on the 17th day of June, 2004.
MONEYMART ASSETS, INC.
* JUDY A. RICE
-------------------------------------
Judy A. Rice, President
As required by the Securities Act of 1933, this Registration Statement
has been signed below by the following persons in the capacities and on the date
indicated.
<Table>
<Caption>
SIGNATURE TITLE DATE
--------- ----- ----
* DELAYNE DEDRICK GOLD Director
- -----------------------------------------------
Delayne Dedrick Gold
* ROBERT F. GUNIA Vice President and Director
- -----------------------------------------------
Robert F. Gunia
* ROBERT E. LA BLANC Director
- -----------------------------------------------
Robert E. La Blanc
* JUDY A. RICE President
- -----------------------------------------------
Judy A. Rice
* ROBIN B. SMITH Director
- -----------------------------------------------
Robin B. Smith
* STEPHEN STONEBURN Director
- -----------------------------------------------
Stephen Stoneburn
* CLAY T. WHITEHEAD Director
- -----------------------------------------------
Clay T. Whitehead
* GRACE C. TORRES Treasurer, Principal Financial and
- ----------------------------------------------- Accounting Officer
Grace C. Torres
* By: /s/ JONATHAN D. SHAIN Attorney-in-Fact
- -----------------------------------------------
Jonathan D. Shain June 17, 2004
</Table>
C-4
<Page>
EXHIBIT INDEX
(17)(b) Form of Proxy