1
For the fiscal year ended October 31, 2000.
File number: 811-08167
Prudential Tax-Managed Small-Cap Fund, Inc.
SUB-ITEM 77D
Policies With Respect to Security Investment
Prudential Mutual Funds
Supplement dated August 30, 2000
The following information supplements
the Prospectus of each of the Funds listed
below.
ANNUAL OR SPECIAL MEETING OF SHAREHOLDERS
(All Funds except Prudential Balanced Fund,
Prudential Global
Genesis Fund, Inc. and Prudential
International Bond Fund, Inc.)
On August 22, 2000, subject to
shareholder approval, the Board of
Directors/Trustees approved the proposals
summarized below. The proposals will be
submitted for approval by shareholders of the
Funds at an Annual or Special Meeting of
Shareholders scheduled to be held on December
14, 2000.
Election of Directors/Trustees
All Funds, except Prudential Diversified
Funds, Prudential Europe Growth Fund, Inc.,
Prudential Natural Resources Fund, Inc.,
Prudential Pacific Growth Fund, Inc. and
Prudential World Fund, Inc. The Board of
Directors/Trustees approved a proposal to
elect Saul F. Fenster, Delayne Dedrick Gold,
Robert F. Gunia, Douglas H. McCorkindale, W.
Scott McDonald, Thomas T. Mooney, Stephen P.
Munn, David R. Odenath, Jr., Richard A.
Redeker, Robin B. Smith, John R. Strangfeld,
Louis A. Weil, III and Clay T. Whitehead as
Directors/Trustees of each of the Funds.
Prudential Europe Growth Fund, Inc.,
Prudential Natural Resources Fund, Inc.,
Prudential Pacific Growth Fund, Inc. and
Prudential World Fund, Inc. The Board of
Directors approved a proposal to elect
Delayne Dedrick Gold, Robert F. Gunia, Robert
E. LaBlanc, David R. Odenath, Jr., Robin B.
Smith, Stephen Stoneburn, John R. Strangfeld,
Nancy H. Teeters and Clay T. Whitehead as
Directors of each of the Funds.
How the Fund is Managed - Manager
All Funds. The Board of
Directors/Trustees approved a proposal under
which the Board may authorize Prudential
Investments Fund Management LLC (PIFM or the
Manager), subject to certain conditions, to
enter into or amend subadvisory agreements
without obtaining further shareholder
approval. One of the conditions is that
shareholders must first approve the grant of
this ongoing authority to the Board of
Directors/Trustees. The implementation of
this proposal also is conditioned upon the
receipt of exemptive relief from the
Securities and Exchange Commission.
Subject to the satisfaction of these two
conditions, which cannot be assured, the
Manager would be permitted, with Board
approval, to employ new subadvisers for a
Fund (including subadvisers affiliated with
PIFM), change the terms of a Fund's
subadvisory agreements or enter into new
subadvisory agreements with existing
subadvisers. Shareholders of a Fund would
continue to have the right to terminate a
subadvisory agreement for a Fund at any time
by a vote of the majority of the outstanding
voting securities of the Fund. Shareholders
would be notified of any subadviser changes
or other material amendments to subadvisory
agreements that occur under these
arrangements.
The Board of Directors/Trustees also
approved a new investment advisory contract
with PIFM. If shareholders approves this new
contract, PIFM would be permitted to allocate
and reallocate a Fund's assets among the
Fund's subadvisers, including The Prudential
Investment Corporation (PIC), Jennison
Associates LLC (Jennison) and unaffiliated
subadvisers, without obtaining further
shareholder approval.
How the Fund is Managed - Investment
Adviser(s)
All Funds except Prudential Real Estate
Securities Fund. The Board of
Directors/Trustees approved an interim
subadvisory agreement with Jennison, a
direct, wholly-owned subsidiary of PIC, to
manage up to 100% of the total assets of each
Fund as designated by the Manager. Jennison
has served as an investment adviser to
investment companies since 1990. Its address
is 466 Lexington Avenue, New York, NY 10017.
As of June 30, 2000, Jennison managed
approximately $63.5 billion in assets. PIFM,
the Fund's Manager, has responsibility for
all investment advisory services, supervises
Jennison and pays Jennison for its services.
The Board of Directors/Trustees also
approved a new subadvisory agreement with
Jennison to manage up to 100% of the total
assets of each Fund as designated by the
Manager and subject to Board approval. This
agreement would take effect only after
shareholder approval.
Borrowing
All Funds. If approved by shareholders,
each applicable Fund's investment restriction
regarding borrowing would be modified to
allow borrowing of up to 33-1/3% of a Fund's
total assets and to delete the requirement
that such borrowing can be made only from
banks.
Investment in Securities of Other Investment
Companies
All Funds. If approved by
shareholders, each applicable Fund's
investment restriction regarding the purchase
of shares of investment companies would be
modified to permit each Fund to invest in the
shares of other registered investment
companies as permitted under applicable law
or by an order of the Commission. To the
extent that a Fund does invest in securities
of other investment companies, shareholders
may be subject to duplicate management and
advisory fees.
Securities Lending
All Funds. If approved by
shareholders, each applicable Fund's
investment restriction regarding securities
lending would be modified to permit each Fund
to make loans of portfolio securities in
amounts up to 33-1/3% of the Fund's total
assets and as permitted by an order of the
Commission.
How the Fund is Managed - Portfolio
Manager(s)
Prudential Equity Fund, Inc.
Jeffrey P. Siegel, Bradley L. Goldberg,
CFA, and David A. Kiefer, CFA, are the
portfolio managers of the Fund effective
August 24, 2000. Mr. Siegel is an Executive
Vice President of Jennison since June 1999.
Previously he was at TIAA-CREF from 1988-
1999, where he held positions as a portfolio
manager and analyst. Prior to joining TIAA-
CREF, Mr. Siegel was an analyst for Equitable
Capital Management and held positions at
Chase Manhattan Bank and First Fidelity Bank.
Mr. Siegel earned a B.A. from Rutgers
University. Mr. Goldberg, an Executive Vice
President of Jennison, joined Jennison in
1974 where he also serves as Chairman of the
Asset Allocation Committee. Prior to joining
Jennison, he served as Vice President and
Group Head in the Investment Research
Division of Bankers Trust Company. He earned
a B.S. from the University of Illinois and an
M.B.A. from New York University. Mr.
Goldberg holds a Chartered Financial Analyst
(C.F.A.) designation. Mr. Kiefer is a Senior
Vice President of Jennison since August 2000.
Previously, he was a Managing Director of PIC
and has been with Prudential since 1986. Mr.
Kiefer earned a B.S. from Princeton
University and an M.B.A. from Harvard
Business School. He holds a Chartered
Financial Analyst (C.F.A.) designation.
Prudential 20/20 Focus Fund
Bradley L. Goldberg, CFA is the
portfolio manager of the value sleeve of the
Fund effective September 2000. Mr.
Goldberg's professional background is
discussed above.
Prudential Equity Income Fund
Thomas Kolefas, CFA and Bradley L.
Goldberg, CFA, are the portfolio managers of
the Fund. Mr. Kolefas has managed the Fund
since May 2000. Mr. Kolefas is a Senior Vice
President of Jennison since September 2000.
Previously, he was a Managing Director and
Senior Portfolio Manager of PIC. He joined
Prudential in May 2000 from Loomis Sayles
Co., L.P., where he headed the Large/Mid Cap
Value Team. Prior to 1996, Mr. Kolefas was
employed by Mackay Shields Financial as a
portfolio manager for five years. Mr.
Kolefas earned a B.S. and an M.B.A. from New
York University and holds a Chartered
Financial Analyst (C.F.A.) designation. Mr.
Goldberg is expected to begin managing the
portfolio in September 2000. His
professional background is discussed above.
Prudential Sector Funds, Inc. - Prudential
Utility Fund
David A. Kiefer, CFA, Eric S. Philo,
CFA, and Shaun Hong are the portfolio
managers of the Fund effective September
2000. Mr. Kiefer has managed the Fund since
1994; his professional background is
discussed above. Eric S. Philo joined
Jennison in May 1996 after 13 years with
Goldman, Sachs & Company. At Goldman, Mr.
Philo initially followed a variety of
companies and industries, including capital
goods, retailing, specialty and industrial
chemicals, defense electronics, and printing.
During his last nine years there, he followed
publishing and media companies. While at
Goldman, he was elected to Institutional
Investor's All-Star Team every year since
1987 and was elected to The Wall Street
Journal All-Star Stock Picking Team annually
since its inception in 1993, ranking number
one in his sector in 1994 and 1995. Mr.
Philo is the primary author of a piece on
publishing and the Internet entitled
CyberPublishing: A New Frontier in Content
Liquidity (July 1995). He earned a B.A. from
George Washington University and an M.B.A
from Columbia University Graduate School of
Business. He holds a CFA designation. Shaun
Hong is a Vice President of Jennison since
September 2000. Previously he was a Vice
President and equity research analyst of PIC.
Prior to Prudential, Mr. Hong was employed as
an analyst at Equinox Capital Management
following the utility, consumer products,
commodities and technology sectors from 1994-
1999. Mr. Hong earned a B.S. from Carnegie
Mellon University. He holds a CFA
designation.
OTHER MATTERS
(Prudential Balanced fund, Prudential Global
Genesis Fund, Inc. and
Prudential International Bond Fund, Inc.)
Shareholders of Prudential Balanced
Fund, Prudential Global Genesis Fund, Inc.
and Prudential International Bond Fund, Inc.
are each expected to vote on a proposal to
reorganize or merge their Fund into another
Prudential mutual fund prior to the
shareholder meetings described above. If
shareholders of these Funds do not approve
the proposed reorganization or merger,
shareholders of each Fund will likely be
solicited to vote on the matters described
above under "ANNUAL OR SPECIAL MEETING OF
SHAREHOLDERS".
Listed below are the names of the
Prudential Mutual Funds and the dates of the
Prospectus to which this Supplement relates.
Name of the Fund
Prospectus Date
Prudential Balanced Fund
October 4, 1999
Prudential Diversified Funds
October 13, 1999
Prudential Equity Fund, Inc.
March 1, 2000
Prudential Equity Income Fund
January 20, 2000
Prudential Europe Growth Fund, Inc.
June 30, 2000
Prudential Global Total Return Fund,
Inc. March 8, 2000
Prudential Index Series Fund
November 18, 1999
Prudential Stock Index Fund
Prudential International Bond Fund, Inc.
March 8, 2000
Prudential Natural Resources Fund, Inc.
July 31, 2000
Prudential Pacific Growth Fund, Inc.
January 19, 2000
Prudential Real Estate Securities Fund
June 2, 2000
Prudential Sector Funds, Inc.
March 30, 2000
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Small Company Fund, Inc.
November 29, 1999
Prudential Tax-Managed Funds
December 30, 1999
Prudential Tax-Managed Equity Fund
Prudential Tax-Managed Small-Cap Fund,
Inc. May 31, 2000
Prudential U.S. Emerging Growth Fund,
Inc. January 20, 2000
Prudential Utility Fund (a series of
February 1, 2000
Prudential Sector Funds, Inc.)
Prudential 20/20 Focus Fund
March 31, 2000
Prudential World Fund, Inc.
Prudential Global Growth Fund
February 2, 2000
Prudential International Value Fund
February 2, 2000
Prudential Jennison International
Growth Fund January 10, 2000
The Prudential Investment Portfolios,
Inc.
Prudential Active Balanced Fund
December 2, 1999
Prudential Jennison Equity
Opportunity Fund December 2, 1999
Prudential Jennison Growth Fund
December 2, 1999
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