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EXHIBIT (o)
TARGET FUNDS
(the Trust)
PLAN PURSUANT TO RULE 18F-3
The Trust hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and expense allocation of each class of shares in each investment
portfolio (each a Fund). Any material amendment to this plan is subject to prior
approval of the Board of Trustees, including a majority of the independent
Trustees.
CLASS CHARACTERISTICS
CLASS A SHARES: Class A shares are subject to a high initial sales charge and a
distribution and/or service fee pursuant to Rule
12b-1 under the 1940 Act (Rule 12b-1 fee) not to
exceed .30 of 1% per annum of the average daily net
assets of the class. The initial sales charge is
waived or reduced for certain eligible investors.
CLASS B SHARES: Class B shares are not subject to an initial sales charge but
are subject to a high contingent deferred sales
charge (declining from 5% to zero over a six-year
period) which will be imposed on certain redemptions
and a Rule 12b-1 fee not to exceed 1% per annum of
the average daily net assets of the class. The
contingent deferred sales charge is waived for
certain eligible investors. Class B shares
automatically convert to Class A shares approximately
seven years after purchase.
CLASS C SHARES: Class C shares are subject to a low initial sales charge and a
1% contingent deferred sales charge which will be
imposed on certain redemptions within the first 18
months after purchase and a Rule 12b-1 fee not to
exceed 1% per annum of the average daily net assets
of the class.
INCOME AND EXPENSE ALLOCATIONS
Income, any realized and unrealized capital gains and losses, and
expenses not allocated to a particular class of a Fund will be
allocated to each class of such Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund.
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DIVIDENDS AND DISTRIBUTIONS
Dividends and other distributions paid by each Fund to each class of
shares, to the extent paid, will be paid on the same day and at the
same time, and will be determined in the same manner and will be in the
same amount, except that the amount of the dividends and other
distributions declared and paid by a particular class of the Fund may
be different from that paid by another class of the Fund because of
Rule 12b-1 fees and other expenses borne exclusively by that class.
EXCHANGE PRIVILEGE
Holders of Class A Shares, Class B Shares and Class C Shares shall have
such exchange privileges as set forth in the Trust's current
prospectus. Exchange privileges may vary among classes and among
holders of a Class.
CONVERSION FEATURES
Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. Conversions
will be effected at relative net asset value without the imposition of
any additional sales charge.
GENERAL
A. Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangement and
shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the
interests of any other class.
B. On an ongoing basis, the Trustees, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the
Trust for the existence of any material conflicts among the interests
of its several classes. The Trustees, including a majority of the
independent Trustees, shall take such action as is reasonably necessary
to eliminate any such conflicts that may develop. Prudential
Investments Fund Management LLC, the Trust's Manager, will be
responsible for reporting any potential or existing conflicts to the
Trustees.
Dated: August 25, 1999
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