STRATEGIC PARTNERS SERIES, N-1A, 2000-02-01

STRATEGIC PARTNERS SERIES
N-1A, 2000-02-01

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As filed with the Securities and Exchange Commission on February 1, 2000

Securities Act Registration No. 333-
Investment Company Act Registration No. 811-09805
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [_]

Post-Effective Amendment No. [_]

and/or

REGISTRATION STATEMENT UNDER THE

INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. [_]

(Check appropriate box or boxes)

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STRATEGIC PARTNERS SERIES

(Exact name of registrant as specified in charter)

GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (973) 367-1495

David F. Connor
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
(Name and Address of Agent for Service)

Approximate date of proposed public offering:
As soon as practicable after the effective
date of the Registration Statement.

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 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.

Title of Securities Being Registered . . . . Shares of beneficial interest,
par value $.001 per share.

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FUND TYPE:
_________________________________
Stock

INVESTMENT OBJECTIVE:
_________________________________
Long-term growth of capital

Strategic Partners
Focused Growth Fund

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PROSPECTUS: MARCH , 2000

As with all mutual funds, the
Securities and Exchange
Commission has not approved or
disapproved the Fund's shares,
nor has the SEC determined
that this prospectus is
complete or accurate. It is a
criminal offense to state
otherwise.
<PAGE>

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Table of Contents
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<TABLE>
<C> <S>
1 Risk/Return Summary
1 Investment Objective and Principal Strategies
1 Principal Risks
2 Evaluating Performance
3 Fees and Expenses

5 How the Fund Invests
5 Investment Objective and Policies
6 Other Investments and Strategies
10 Investment Risks

13 How the Fund is Managed
13 Board of Trustees
13 Manager
13 Sub-Manager
13 Investment Advisers
14 Portfolio Managers
14 Distributor

15 Fund Distributions and Tax Issues
15 Distributions
16 Tax Issues
17 If You Sell Your Shares

19 How to Buy and Sell Shares of the Fund
19 Initial Offering of Shares
20 How to Buy Shares
26 How to Sell Your Shares
30 Telephone Redemptions
For More Information (Back Cover)
</TABLE>

The Fund's Distributor will solicit subscriptions for the Fund's shares during
a subscription period expected to last from , 2000 to , 2000. The Fund
expects to begin a continuous offering of its shares on , 2000.

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Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
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Risk/Return Summary
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This section highlights key information about the Strategic Partners Focused
Growth Fund, which we refer to as "the Fund." The Fund is a separate series of
Strategic Partners Series ("the Company"). Additional information follows this
summary.

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Our investment objective is long-term growth of capital. This means we seek
investments whose price will increase over several years. We normally invest
at least 65% of total assets in equity-related securities of U.S. companies
that we believe have strong capital appreciation potential. Each investment
adviser to the Fund utilizes a growth style to select approximately 20
securities that they believe will allow the Fund to meet its objective. The
Fund's strategy is to combine the efforts of two investment advisers and to
invest in the favorite stock selection ideas of three portfolio managers (two
of whom invest as a team). The portfolio managers build a portfolio with
stocks in which they have the highest confidence.
Equity-related securities in which the Fund primarily invests are common
stocks, nonconvertible preferred stocks and convertible securities. We also
may use derivatives. Generally, each investment adviser will consider selling
or reducing a stock position when, in their opinion, the stock has experienced
a fundamental disappointment in earnings; it has reached an intermediate-term
price objective and its outlook no longer seems sufficiently promising; a
relatively more attractive stock emerges; or the stock has experienced adverse
price movement. While we make every effort to achieve our objective, we can't
guarantee success.

PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. Since the Fund
invests primarily in equity-related securities, there is the risk that the
price of a particular stock we own could go down, or the value of the equity
markets or a sector of them could go down. Stock markets are volatile. The
Fund's holdings can vary significantly from broad market indexes, and
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We're Growth Investors
In deciding which stocks to buy, each investment adviser uses what is known as
a growth investment style. This means that each adviser will invest in stocks
they believe could experience superior sales or earnings growth.

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1
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Risk/Return Summary
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performance of the Fund can deviate from the performance of such indexes.
Since the Fund invests in foreign securities, there are additional risks.
Foreign markets are often more volatile than U.S. markets and are generally not
subject to regulatory requirements comparable to those of U.S. issuers. Changes
in currency exchange rates can reduce or increase market performance.
The Fund is nondiversified, meaning we can invest more than 5% of our assets
in the securities of any one issuer. Investing in a nondiversified mutual fund,
particularly a fund investing in approximately 40 equity-related securities,
involves greater risk than investing in a diversified fund because a loss
resulting from the decline in the value of one security may represent a greater
portion of the total assets of a nondiversified fund.
Some of our investment strategies--such as using derivatives--involve above-
average risk. The Fund may use risk management techniques to try to preserve
assets or enhance return. Derivatives may not fully offset the underlying
positions and this could result in losses to the Fund that would not otherwise
have occurred.
Like any mutual fund, an investment in the Fund could lose value and you
could lose money. For more detailed information about the risks associated with
the Fund, see "How the Fund Invests--Investment Risks."
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

EVALUATING PERFORMANCE
Because the Fund is new, no performance history is included in this prospectus.

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2 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
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Risk/Return Summary
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FEES AND EXPENSES
These tables show the sales charges, fees and expenses that you may pay if you
buy and hold shares of each share class of the Fund--Class A, B, C and Z. Each
share class has different sales charges--known as loads--and expenses, but
represents an investment in the same fund. Class Z shares are available only to
a limited group of investors. For more information about which share class may
be right for you, see "How to Buy, Sell and Exchange Shares of the Fund."

Shareholder Fees/1/ (paid directly from your investment)
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<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Z
<S> <C> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases (as a percentage of offering
price) 5% None 1% None

Maximum deferred sales charge (load) (as a
percentage of the lower of original
purchase price or sale proceeds) None 5%/2/ 1%/3/ None

Maximum sales charge (load) imposed on
reinvested dividends and other
distributions None None None None

Redemption fees None None None None

Exchange fee None None None None
</TABLE>

Annual Fund Operating Expenses (deducted from Fund assets)
<TABLE>
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<CAPTION>
CLASS A CLASS B CLASS C CLASS Z
<S> <C> <C> <C> <C>
Management fees .90% .90% .90% .90%
+ Distribution and service (12b-1) fees .30%/4/ 1.00% 1.00% None
+ Other expenses/5/ . % . % . % . %
= Total annual Fund operating expenses % % % %
- Fee waiver or expense reimbursement .05% None None None
= Net annual Fund operating expenses %/4/ % % %
</TABLE>
1 Your broker may charge you a separate or additional fee for purchases and
sales of shares.
2 The contingent deferred sales charge (CDSC) for Class B shares decreases by
1% annually to 1% in the fifth and sixth years and 0% in the seventh year.
Class B shares convert to Class A shares approximately seven years after
purchase.
3 The CDSC for Class C shares is 1% for shares redeemed within 18 months of
purchase.
4 For the fiscal year ending , 2001, the Distributor of the Fund has
contractually agreed to reduce its distribution and service (12b-1) fees for
Class A shares to .25 of 1% of the average daily net assets of the Class A
shares.
5 Other expenses are estimated, since this is a new fund

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3
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Risk/Return Summary
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EXAMPLE
This example will help you compare the fees and expenses of the Fund's
different share classes and the cost of investing in the Fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same, except for the Distributor's
reduction of distribution and service (12b-1) fees for Class A shares during
the first year. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:

<TABLE>
- ----------------------------
<CAPTION>
1 YR 3 YRS
<S> <C> <C>
Class A shares $ $
Class B shares $ $
Class C shares $ $
Class Z shares $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares:

<TABLE>
- ----------------------------
<CAPTION>
1 YR 3 YRS
<S> <C> <C>
Class A shares $ $
Class B shares $ $
Class C shares $ $
Class Z shares $ $
</TABLE>

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4 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852

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How the Fund Invests
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INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is long-term growth of capital. This means we
seek investments whose price will increase over several years. While we make
every effort to achieve our objective, we can't guarantee success.
In pursuing our objective, we normally invest at least 65% of the Fund's
total assets in equity-related securities of U.S. companies that we believe
have strong capital appreciation potential. The Fund's strategy is to combine
the efforts of three portfolio managers (two of whom operate as a team), each
utilizing their own growth-oriented investment style, and to invest in the
favorite stock selection ideas of each. The portfolio managers build a
portfolio with stocks in which they have the highest confidence. Each
investment adviser will select approximately 20 securities for their half of
the Fund's portfolio.
In addition to common stocks, nonconvertible preferred stocks and
convertible securities, equity-related securities include American Depositary
Receipts (ADRs); warrants and rights that can be exercised to obtain stock;
investments in various types of business ventures, including partnerships and
joint ventures; real estate investment trusts (REITs) and similar securities.
Convertible securities are securities--like bonds, corporate notes and
preferred stocks--that we can convert into the company's common stock or some
other equity security. We may buy common stocks of companies of every size--
small-, medium- and large-capitalization--although our investments are mostly
in medium- and large-capitalization stocks. The Fund intends to be fully
invested, holding less than 5% of its total assets in cash under normal market
conditions.

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OUR GROWTH STYLE
Alliance Capital Management's portfolio manager, Alfred Harrison, utilizes the
fundamental analysis and research of Alliance's large internal research staff.
In selecting stocks for the Fund, he emphasizes stock selection and investment
in a limited number of companies that have strong management, superior industry
positions, excellent balance sheets and the ability to demonstrate superior
earnings growth.
Jennison Associates' portfolio managers, Spiros Segalas and Kathleen
McCarragher, invest in mid-size and large companies experiencing some or all of
the following: high sales growth, high unit growth, high or improving returns
on assets and equity and a strong balance sheet. Such companies generally trade
at high prices relative to their current earnings.

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5
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How the Fund Invests
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DIVISION OF ASSETS
Because each investment adviser selects portfolio securities independently, it
is possible that a security held by one portfolio segment may also be held by
the other portfolio segment of the Fund or that the two advisers may
simultaneously favor the same industry segment. The Manager will monitor the
overall portfolio to ensure that any such overlaps do not create an unintended
industry concentration.
In order to maintain an approximately equal division of all of the Fund's
assets between the two investment advisers, the Manager will divide all daily
cash inflows (that is, purchases and reinvested distributions) and outflows
(that is, redemptions and expense items) between the two advisers. Each
segment's assets will be rebalanced periodically to take account of market
fluctuations in order to maintain an approximately equal allocation. As a
consequence, each segment will allocate assets from the adviser managing more
assets to the other. Reallocations may result in additional transaction costs
to the extent that sales of securities as part of these reallocations result in
higher portfolio turnover. In addition, if one investment adviser buys a
security as the other adviser sells it, the net position of the Fund in the
security may be approximately the same as it would have been with a single
investment adviser and no such sale and purchase, but the Fund will have
incurred additional transaction costs and other expenses. The Manager will
consider these costs in determining the allocation and reallocation of assets.
For more information, see "Investment Risks" and the Statement of Additional
Information, "Description of the Fund, Its Investments and Risks." The
Statement of Additional Information--which we refer to as the SAI--contains
additional information about the Fund. To obtain a copy, see the back cover
page of this prospectus.
The Fund's investment objective is a fundamental policy that cannot be
changed without shareholder approval. The Board can change investment policies
that are not fundamental.

OTHER INVESTMENTS AND STRATEGIES
In addition to the principal strategies, we may also use the following
investment strategies to try to increase the Fund's returns or protect its
assets if market conditions warrant.

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6 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
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How the Fund Invests
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Foreign Securities
We may invest up to 20% of the Fund's total assets in foreign securities,
including stocks and other equity-related securities, money market instruments
and other fixed-income securities of foreign issuers. For purposes of the 20%
limit, we do not consider ADRs and other similar receipts or shares to be
foreign securities.

Money Market Instruments
In response to adverse market, economic or political conditions, we may
temporarily invest up to 100% of the Fund's assets in money market instruments.
Money market instruments include the commercial paper of corporations,
certificates of deposit, bankers' acceptances and other obligations of domestic
and foreign banks, nonconvertible debt securities (corporate and government),
short-term obligations issued or guaranteed by the U.S. government or its
agencies or instrumentalities, repurchase agreements and cash (foreign
currencies or U.S. dollars). Investing heavily in these securities limits our
ability to achieve our investment objective, but can help to preserve the
Fund's assets when the equity markets are unstable.
The Fund also may temporarily hold cash or invest in high-quality foreign or
domestic money market instruments pending investment of proceeds from new sales
of Fund shares or to meet ordinary daily cash needs subject to the policy of
normally investing at least 65% of the Fund's assets in equity-related
securities.

Real Estate Investment Trusts
We may invest in the securities of real estate investment trusts known as
REITs. REITs are like corporations, except that they do not pay income taxes if
they meet certain IRS requirements. However, while REITs themselves do not pay
income taxes, the distributions they make to investors are taxable. REITs
invest primarily in real estate and distribute almost all of their income--most
of which comes from rents, mortgages and gains on sales of property--to
shareholders.

U.S. Government Securities
The Fund may invest in securities issued or guaranteed by the U.S. Treasury or
by an agency or instrumentality of the U.S. government. Not all

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7
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How the Fund Invests
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U.S. government securities are backed by the full faith and credit of the
United States. Some are supported only by the credit of the issuing agency.

Short Sales
The Fund may use short sales, where it sells a security it does not own, with
the expectation of a decline in the market value of that security. To complete
the transaction, the Fund will borrow the security to make delivery to the
buyer. The Fund must replace the security borrowed by purchasing it at the
market price at the time of replacement. The price at that time may be more or
less than the price at which the Fund sold the security. The Fund is required
to pay the lender any dividends or interest accrued. To borrow the security,
the Fund may pay a premium which would increase the cost of the security sold.

Repurchase Agreements
The Fund may also use repurchase agreements, where a party agrees to sell a
security to the Fund and then repurchase it at an agreed-upon price at a stated
time. This creates a fixed return for the Fund and is, in effect, a loan by the
Fund.

Derivative Strategies
We may use various derivative strategies to try to improve the Fund's returns
or protect its assets. We cannot guarantee that these strategies will work,
that the instruments necessary to implement these strategies will be available,
or that the Fund will not lose money. Derivatives--such as futures, options and
options on futures--involve costs and can be volatile. With derivatives, an
investment adviser tries to predict whether the underlying investment--a
security, market index, currency, interest rate or some other benchmark--will
go up or down at some future date. We may use derivatives to try to reduce risk
or to increase return consistent with the Fund's overall investment objective.
The investment adviser will consider other factors (such as cost) in deciding
whether to employ any particular strategy or use any particular instrument. Any
derivatives we use may not match the Fund's underlying holdings.

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8 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852

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How the Fund Invests
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Options. The Fund may purchase and sell put and call options on securities
indexes traded on U.S. or foreign securities exchanges or on the over-the-
counter market. An option is the right to buy or sell securities in exchange
for a premium. The Fund will sell only covered options.

Futures Contracts And Related Options. The Fund may purchase and sell stock
index futures contracts and related options on stock index futures. The Fund
may purchase and sell futures contracts on foreign currencies and related
options on foreign currency futures contracts. A futures contract is an
agreement to buy or sell a set quantity of an underlying product at a future
date, or to make or receive a cash payment based on the value of a securities
index.

Additional Strategies
The Fund also follows certain policies when it borrows money (the Fund can
borrow up to 33 1/3% of the value of its total assets); lends its securities to
others (the Fund can lend up to 33 1/3% of the value of its total assets
including collateral received in the transaction); and holds illiquid
securities (the Fund may hold up to 15% of its 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). The Fund is "nondiversified," meaning it
can invest more than 5% of its assets in the securities of any one issuer. The
Fund is subject to certain other investment restrictions that are fundamental
policies, which means they cannot be changed without shareholder approval. For
more information about these restrictions, see the SAI.

Portfolio Turnover
It is not a principal strategy of the Fund to actively and frequently trade its
portfolio securities to achieve its investment objective. Nevertheless, the
Fund may have an annual portfolio turnover rate of up to 200%. Portfolio
turnover is generally the percentage found by dividing the lesser of portfolio
purchases and sales by the monthly average value of the portfolio. High
portfolio turnover (100% or more) results in higher brokerage commissions and
other costs and can affect the Fund's performance. It also can result in a
greater amount of distributions as ordinary income rather than long-term
capital gains.

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9
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How the Fund Invests
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INVESTMENT RISKS
All investments involve risk, and investing in the Fund is no exception. Since
the Fund's holdings can vary significantly from broad market indexes,
performance of the Fund can deviate from performance of the indexes. This chart
outlines the key risks and potential rewards of the Fund's principal
investments and certain other investments the Fund may make. See, too,
"Description of the Fund, Its Investments and Risks" in the SAI.

Investment Type
% of Fund Total Assets Risks Potential Rewards
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Equity-related . Individual stocks . Historically,
securities could lose value stocks have
At least 65% outperformed
. The equity other
markets could go investments over
down, resulting the long term
in a decline in
value of the . Generally,
Fund's economic growth
investments means higher
corporate
. Changes in profits, which
economic or lead to an
political increase in
conditions, both stock prices,
domestic and known as capital
international, appreciation
may result in a
decline in value
of the Fund's
investments

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Foreign . Foreign markets, . Investors can
securities economies and participate in
Up to 20% political systems foreign markets
may not be as and companies
stable as in the operating in
U.S. those markets

. Currency risk-- . May profit from
changing values changing values
of foreign of foreign
currencies can currencies
cause losses
. Opportunities
. May be less for
liquid than U.S. diversification
stocks and bonds
. Differences in
foreign laws,
accounting
standards, public
information,
custody and
settlement
practices provide
less reliable
information on
foreign
investments and
involve more
risks

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10 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852

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How the Fund Invests
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Investment Type (cont'd)
% of Fund Total Assets Risks Potential Rewards
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Derivatives . Derivatives such . The Fund could
Percentage varies as futures and make money and
options that are protect against
used for hedging losses if the
purposes may not investment
fully offset the analysis proves
underlying correct
positions and
this could result . Derivatives that
in losses to the involve leverage
Fund that would could generate
not have substantial
otherwise gains at low
occurred cost

. Derivatives used . One way to
for risk manage the
management may Fund's
not have the risk/return
intended effects balance is to
and may result in lock in the
losses or missed value of an
opportunities investment ahead
of time
. The other party
to a deri vatives
contract could
default

. Derivatives that
involve leverage
could magnify
losses
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Real estate . Performance . Real estate
investment trusts depends on the holdings can
(REITs) strength of real generate good
Up to 25% estate market, returns from
REIT management rents, rising
and property market values,
management which etc.
can be affected
by many factors, . Greater
including diversification
national and than direct
regional economic ownership
conditions
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Short sales . May magnify . May magnify
underlying underlying
investment losses investment gains

Up to 25% of net . Investment costs
assets may exceed
potential
underlying
investment gains
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U.S. government . Not all are . It can lead to
securities insured or price volatility
Up to 20% guaranteed by the
government but . May preserve the
only by the Fund's assets
issuing agency
. Principal and
. Limits potential interest may be
for capital guaranteed by
appreciation the U.S.
government
. Interest rate
risk--the risk
that the value of
most debt
obligations will
fall when
interest rates
rise; the longer
its maturity, the
more its value
typically falls
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11
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How the Fund Invests
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Investment Type (cont'd)
% of Fund Total Assets Risks Potential Rewards
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Illiquid . May be difficult . May offer a more
securities to value attractive yield
Up to 15% of net precisely or potential for
assets growth than more
widely traded
. May be difficult securities
to sell at the

time or price
desired

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Money market . Limits potential . May preserve the
instruments for capital Fund's assets
appreciation

Up to 100% on a . Credit risk--the
temporary basis risk that the
default of an
issuer would
leave the Fund
with unpaid
interest or
principal
. The lower the
quality, the
higher the
potential
volatility
. Market risk--the
risk that the
market value of
an investment may
move up or down,
sometimes rapidly
or unpredictably.
Market risk may
affect an
industry, a
sector or the
market as a whole

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12 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852

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How the Fund is Managed
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BOARD OF TRUSTEES
The Company's Board of Trustees oversees the actions of the Manager, Sub-
Manager, Investment Advisers and Distributor, and decides on general policies.
The Board also oversees the Company's officers, who conduct and supervise the
daily business operations of the Fund.

MANAGER
Prudential Investments Fund Management LLC (PIFM)
Gateway Center Three, 100 Mulberry Street
Newark, NJ 07102-4077

Under a management agreement with the Fund, PIFM manages the Fund's
investment operations and administers its business affairs. PIFM is paid annual
management fees of .90 of 1% of the Fund's average net assets up to and
including $1 billion and .85 of 1% on average net assets over $1 billion. PIFM
has responsibility for all investment advisory services and supervises
Prudential Investments and the Fund's investment advisers.
PIFM and its predecessors have served as manager or administrator to
investment companies since 1987. As of , 2000, PIFM served as the manager
to 43 mutual funds, and as manager or administrator to 22 closed-end investment
companies, with aggregate assets of approximately $ billion.

SUB-MANAGER
The Prudential Investment Corporation, called Prudential Investments, serves as
the Sub-Manager for the portion of the Fund managed by Jennison Associates LLC
(Jennison). Prudential Investments' address is Prudential Plaza, 751 Broad
Street, Newark, NJ 07102. Prudential Investments provides advisory services to
Jennison as Jennison may request from time to time, including market research
and assistance with the maintenance of books and records. Prudential
Investments has served as an adviser to mutual funds since .

INVESTMENT ADVISERS
Alliance Capital Management L.P. (Alliance) and Jennison are the Fund's
investment advisers. Alliance's address is 1345 Avenue of the Americas, New
York, NY 10105 and Jennison's address is 466 Lexington Avenue, New York, NY
10017.

13
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How the Fund is Managed
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Alliance is a leading international investment adviser supervising client
accounts with assets as of September 30, 1999 totaling more than $317 billion,
including 52 investment companies with assets of more than $143 billion.
Alliance has served as an investment adviser to funds since .
Jennison serves as an investment adviser to mutual funds [and closed-end
funds with assets of approximately $ billion.] Jennison has served as an
investment adviser to funds since .

PORTFOLIO MANAGERS
Alfred Harrison is portfolio manager for the portion of the Fund's assets
advised by Alliance and he has served as such since the Fund began investment
operations. Mr. Harrison has been in the investment business for over years.
He is Vice Chairman of Alliance Capital Management Corporation.
Spiros Segalas and Kathleen McCarragher are co-portfolio managers for the
portion of the Fund's assets advised by Jennison, and they have served as such
since the Fund began investment operations. Spiros "Sig" Segalas has been in
the investment business for over 35 years. He is a founding member, Director,
President and Chief Investment Officer of Jennison. Mr. Segalas received a B.A.
from Princeton University and is a member of the New York Society of Security
Analysts. Kathleen McCarragher is a Director and Executive Vice President of
Jennison and is also Jennison's Growth Equity Investment Strategist. She joined
Jennison in 1998 after a 17-year investment career, including positions at
Weiss, Peck & Greer (1992 to 1998) as a portfolio manager and State Street
Research and Management Company, where she was a member of the Investment
Committee. She received a B.B.A. from the University of Wisconsin and an M.B.A.
from Harvard Business School.

DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Fund's
shares under a Distribution Agreement with the Fund. The Fund has Distribution
and Service Plans under Rule 12b-1 of the Investment Company Act. Under the
Plans and the Distribution Agreement, PIMS pays the expenses of distributing
the Fund's Class A, B, C and Z shares and provides certain shareholder support
services. The Fund pays distribution and other fees to PIMS as compensation for
its services for each class of shares other than Class Z. These fees--known as
12b-1 fees--are shown in the "Fees and Expenses" tables.

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14 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

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Fund Distributions and Tax Issues
- --------------------------------------------------------------------------------

Investors who buy shares of the Fund should be aware of some important tax
issues. For example, the Fund distributes dividends of ordinary income and any
realized net capital gains to shareholders. These distributions are subject to
taxes, unless you hold your shares in a 401(k) plan, an Individual Retirement
Account (IRA) or some other qualified tax-deferred plan or account. Dividends
and distributions from the Fund also may be subject to state and local income
tax in the state where you live.
Also, if you sell shares of the Fund for a profit, you may have to pay
capital gains taxes on the amount of your profit, again unless you hold your
shares in a qualified tax-deferred plan or account.
The following briefly discusses some of the important federal tax issues you
should be aware of, but is not meant to be tax advice. For tax advice, please
speak with your tax adviser.

DISTRIBUTIONS
The Fund distributes dividends of any net investment income to shareholders
typically once a year. For example, if the Fund owns ACME Corp. stock and the
stock pays a dividend, the Fund will pay out a portion of this dividend to its
shareholders, assuming the Fund's income is more than its costs and expenses.
The dividends you receive from the Fund will be taxed as ordinary income
whether or not they are reinvested in the Fund.
The Fund also distributes realized net capital gains to shareholders--
typically once a year. Capital gains are generated when the Fund sells its
assets for a profit. For example, if the Fund bought 100 shares of ACME Corp.
stock for a total of $1,000 and more than one year later sold the shares for a
total of $1,500, the Fund has net long-term capital gains of $500, which it
will pass on to shareholders (assuming the Fund's total gains are greater than
any losses it may have). Capital gains are taxed differently depending on how
long the Fund holds the security--if a security is held more than one year
before it is sold, long-term capital gains are taxed at the rate of 20%, but if
the security is held one year or less, short-term capital gains are taxed at
ordinary income rates of up to 39.6%. Different rates apply to corporate
shareholders.
For your convenience, Fund distributions of dividends and capital gains are
automatically reinvested in the Fund without any sales charge. If you ask us to
pay the distributions in cash, we will send you a check if your

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15
<PAGE>

- --------------------------------------------------------------------------------
Fund Distributions and Tax Issues
- --------------------------------------------------------------------------------

account is with the Transfer Agent. Otherwise, if your account is with a
broker, you will receive a credit to your account. Either way, the
distributions may be subject to taxes, unless your shares are held in a
qualified tax-deferred plan or account. For more information about automatic
reinvestment and other shareholder services, see "Step 4: Additional
Shareholder Services" in the next section.

TAX ISSUES
Form 1099
Every year, you will receive a Form 1099, which reports the amount of dividends
and capital gains we distributed to you during the prior year. If you own
shares of the Fund as part of a qualified tax-deferred plan or account, your
taxes are deferred, so you will not receive a Form 1099. However, you will
receive a Form 1099 when you take any distributions from your qualified tax-
deferred plan or account.
Fund distributions are generally taxable to you in the calendar year they
are received, except when we declare certain dividends in the fourth quarter
and actually pay them in January of the following year. In such cases, the
dividends are treated as if they were paid on December 31 of the prior year.
Corporate shareholders are eligible for the 70% dividends-received deduction
for certain dividends.

Withholding Taxes
If federal tax law requires you to provide the Fund with your taxpayer
identification number and certifications as to your tax status, and you fail to
do this or if you are subject to backup withholding, we will withhold and pay
to the U.S. Treasury 31% of your distributions and sale proceeds. Dividends of
net investment income and short-term capital gains paid to a nonresident
foreign shareholder generally will be subject to a U.S. withholding tax of 30%.
This rate may be lower, depending on any tax treaty the U.S. may have with the
shareholder's country.

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16 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852

<PAGE>

- --------------------------------------------------------------------------------
Fund Distributions and Tax Issues
- --------------------------------------------------------------------------------

If You Purchase Just Before Record Date
If you buy shares of the Fund just before the record date (the date that
determines who receives the distribution), that distribution will be paid to
you. As explained above, the distribution may be subject to income or capital
gains taxes. You may think you've done well since you bought shares one day and
soon thereafter received a distribution. That is not so because when dividends
are paid out, the value of each share of the Fund decreases by the amount of
the dividend to reflect the payout, although this may not be apparent because
the value of each share of the Fund also will be affected by the market
changes, if any. The distribution you receive makes up for the decrease in
share value. However, the timing of your purchase does mean that part of your
investment came back to you as taxable income.

Qualified Retirement Plans
Retirement plans and accounts allow you to defer paying taxes on investment
income and capital gains. Contributions to these plans may also be tax
deductible, although distributions from these plans generally are taxable. In
the case of Roth IRA accounts, contributions are not tax deductible, but
distributions from the plan may be tax-free.

IF YOU SELL YOUR SHARES
If you sell any shares of the Fund for a profit, you have realized a capital
gain, which is subject to tax unless you hold shares in a qualified tax-
deferred plan or account. The amount of tax you pay depends on how long you
owned your shares. If you sell shares of the Fund for a loss, you may have a
capital loss, which you may use to offset certain capital gains you have.
If you sell shares and realize a loss, you will not be permitted to use the
loss to the extent you replace the shares (including pursuant to the
reinvestment of a dividend) within a 61-day period (beginning 30 days before
the sale of the shares). If you acquire shares of the Fund and sell your shares
within 90 days, you may not be allowed to include certain charges incurred in
acquiring the shares for purposes of calculating gain or loss realized upon the
sale of the shares.
- ----------------------------------------

CAPITAL GAIN
(taxes owed)
RECEIPTS FROM SALE OR
CAPITAL LOSS
(offset against gain)

- ----------------------------------------

- --------------------------------------------------------------------------------

17
<PAGE>

- --------------------------------------------------------------------------------
Fund Distributions and Tax Issues
- --------------------------------------------------------------------------------

Exchanging your shares of the Fund for the shares of another series of the
Company is considered a sale for tax purposes. In other words, it's a "taxable
event." Therefore, if the shares you exchanged have increased in value since
you purchased them, you have capital gains, which are subject to the taxes
described above.
Any gain or loss you may have from selling Fund shares will not be reported
on the Form 1099; however, proceeds from the sale will be reported on Form
1099-B. Therefore, unless you hold your shares in a qualified tax-deferred plan
or account, you or your financial adviser should keep track of the dates on
which you buy and sell Fund shares, as well as the amount of any gain or loss
on each transaction. For tax advice, please see your tax adviser.

Automatic Conversion of Class B Shares
We have obtained a legal opinion that the conversion of Class B shares into
Class A shares--which happens automatically approximately seven years after
purchase--is not a taxable event because it does not involve an actual sale of
your Class B shares. This opinion, however, is not binding on the Internal
Revenue Service. For more information about the automatic conversion of Class B
shares, see Class B Shares Convert to Class A Shares After Approximately Seven
Years in the next section.

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18 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

How to Buy, Sell and
- --------------------------------------------------------------------------------
Exchange Shares of the Fund
- --------------------------------------------------------------------------------

INITIAL OFFERING OF SHARES
PIMS will solicit subscriptions for Class A, Class B, Class C and Class Z
shares of the Fund during a subscription period beginning , 2000 and
expected to end , 2000. Fund shares subscribed for during this time will be
issued at a net asset value of $10.00 per share on a closing date expected to
occur on , 2000. An initial sales charge of 5% (5.26% of the net amount
invested) is imposed on each transaction in Class A shares. The initial sales
charge may be reduced depending on the amount of the purchase as shown in the
table under "Reducing or Waiving Class A's Initial Sales Charge." An initial
sales charge of 1% (1.01% of the net amount invested) is imposed on each
transaction in Class C shares. Your broker will notify you of the end of the
subscription period. Payment for Fund shares will be due within three days. If
you send an order during the subscription period along with payment, your money
will be returned unless you allow the money to be invested in Prudential
MoneyMart Assets, Inc. (MoneyMart Fund), a money market fund. If this is your
first investment in MoneyMart Fund, all amounts received and invested in
MoneyMart Fund, including any dividends received on these funds, will be
automatically invested in this Fund on the closing date. You will not receive
share certificates. If you previously owned shares of MoneyMart Fund, dividends
accrued on your shares will not be exchanged for Fund shares. The minimum
initial investment is $1,000 for Class A and Class B shares and $2,500 for
Class C shares. There are no minimum investment requirements for Class Z
shares.
If you subscribe for shares, you will not have any rights as a shareholder
of the Fund until your shares are paid for and their issuance has been
reflected in the Fund's books. We reserve the right to withdraw, modify or
terminate the initial offering without notice and to refuse any order in whole
or in part.
The Fund will be closed for purchases from on or about , 2000 to ,
2000, while the investment advisers invest the proceeds of the offering in
accordance with the Fund's investment objective and policies (the closing
period). Beginning on or about , 2000, the Fund will commence a continuous
offering of its shares. During the closing period, shareholders may redeem
existing positions, but the Fund will be closed to new purchases.

- --------------------------------------------------------------------------------

19
<PAGE>

HOW TO BUY SHARES
Step 1: Open an Account
If you don't have an account with a securities firm that is permitted to buy or
sell shares of the Fund for you, call the Fund's Transfer Agent, Prudential
Mutual Fund Services LLC (PMFS), at (800) 225-1852, or contact:

Prudential Mutual Fund Services LLC
Attn: Investment Services
P.O. Box 15020
New Brunswick, NJ 08906-5020

To purchase by wire, call the number above to obtain an application. After
PMFS receives your completed application, you will receive an account number.
For additional information about purchasing shares of the Fund, see the back
cover page of this prospectus. We have the right to reject any purchase order
(including an exchange into the Fund) or suspend or modify the Fund's sale of
its shares.

Step 2: Choose a Share Class
Individual investors can choose among Class A, Class B, Class C and Class Z
shares of the Fund, although Class Z shares are available only to a limited
group of investors.
Multiple share classes let you choose a cost structure that better meets
your needs. With Class A shares, you pay the sales charge at the time of
purchase, but the operating expenses each year are lower than the expenses of
Class B and Class C shares. With Class B shares, you only pay a sales charge if
you sell your shares within six years (that is why it is called a Contingent
Deferred Sales Charge or CDSC), but the operating expenses each year are higher
than the Class A share expenses. With Class C shares, you pay a 1% front-end
sales charge and a 1% CDSC if you sell within 18 months of purchase, but the
operating expenses are also higher than the expenses for Class A shares.
When choosing a share class, you should consider the following:
. The amount of your investment
. The length of time you expect to hold the shares and the impact of
varying distribution fees

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20 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

. The different sales charges that apply to each share class--Class A's
front-end sales charge vs. Class B's CDSC vs. Class C's low front-end
sales charge and low CDSC
. Whether you qualify for any reduction or waiver of sales charges
. The fact that Class B shares automatically convert to Class A shares
approximately seven years after purchase
. Whether you qualify to purchase Class Z shares.
See "How to Sell Your Shares" for a description of the impact of CDSCs.

Share Class Comparison. Use this chart to help you compare the Fund's different
share classes. The discussion following this chart will tell you whether you
are entitled to a reduction or waiver of any sales charges.

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<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Z

<S> <C> <C> <C> <C>
Minimum purchase $1,000 $1,000 $2,500 None
amount/1/

Minimum amount for $100 $100 $100 None
subsequent purchases/1/

Maximum initial 5% of the public None 1% of the public None
sales charge offering price offering price

Contingent Deferred None If sold during: 1% on sales None
Sales Charge Year 1 5% made within
(CDSC)/2/ Year 2 4% 18 months of
Year 3 3% purchase/2/
Year 4 2%
Years 5/6 1%
Year 7 0%
Annual distribution .30 of 1%; 1% 1% None
(12b-1) and service fees (.25 of 1%
(shown as a percentage currently)
of average net
assets)/3/
</TABLE>
1 The minimum investment requirements do not apply to certain retirement and
employee savings plans and custodial accounts for minors. The minimum initial
and subsequent investment for purchases made through the Automatic Investment
Plan is $50. For more information, see "Additional Shareholder Services--
Automatic Investment Plan."
2 For more information about the CDSC and how it is calculated, see "Contingent
Deferred Sales Charges (CDSC)."
3 These distribution fees are paid from the Fund's assets on a continuous
basis. Over time, the fees will increase the cost of your investment and may
cost you more than paying other types of sales charges. The service fee for
Class A, Class B and Class C shares is .25 of 1%. The distribution fee for
Class A shares is limited to .30 of 1% (including the .25 of 1% service fee).
Class B and Class C shares pay a distribution fee (in addition to the service
fee) of .75 of 1%.

- --------------------------------------------------------------------------------

21
<PAGE>

Reducing or Waiving Class A's Initial Sales Charge
The following describes the different ways investors can reduce or avoid paying
Class A's initial sales charge.

Increase the Amount of Your Investment. You can reduce Class A's sales charge
by increasing the amount of your investment. This table shows you how the sales
charge decreases as the amount of your investment increases.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SALES CHARGE AS % SALES CHARGE AS % DEALER
AMOUNT OF PURCHASE OF OFFERING PRICE OF AMOUNT INVESTED REALLOWANCE
<S> <C> <C> <C>
Less than $25,000 5.00% 5.26% 4.75%
$25,000 to $49,999 4.50% 4.71% 4.25%
$50,000 to $99,999 4.00% 4.17% 3.75%
$100,000 to $249,999 3.25% 3.36% 3.00%
$250,000 to $499,999 2.50% 2.56% 2.40%
$500,000 to $999,999 2.00% 2.04% 1.90%
$1 million and above/1/ None None None
</TABLE>

1 If you invest $1 million or more, you can buy only Class A shares, unless you
qualify to buy Class Z shares.

To satisfy the purchase amounts above, you can:
. Invest with an eligible group of related investors
. Sign a Letter of Intent, stating in writing that you or an eligible group
of related investors will purchase a certain amount of shares in the Fund
and other Prudential mutual funds within 13 months.

Benefit Plans. Benefit Plans can avoid Class A's initial sales charge if the
Benefit Plan has existing assets of at least $ million or 250 eligible
employees or participants. For these purposes, a Benefit Plan is a pension,
profit-sharing or other employee benefit plan qualified under Section 401 of
the Internal Revenue Code, a deferred compensation or annuity plan under
Sections 403(b) and 457 of the Internal Revenue Code, a rabbi trust, or a
nonqualified deferred compensation plan.

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22 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

Waivers are also available to investors in certain programs sponsored by
brokers, investment advisers and financial planners who have agreements with
the Fund's Distributor relating to:
. Mutual fund "wrap" or asset allocation programs where the sponsor places
Fund trades and charges its clients a management, consulting or other fee
for its services
. Mutual fund "supermarket" programs where the sponsor links its customers'
accounts to a master account in the sponsor's name and the sponsor
charges a fee for its services.

Other Types of Investors. Other investors pay no sales charge, including
certain officers, employees or agents of the Manager and its affiliates, the
investment advisers of the Fund and registered representatives and employees of
brokers that have entered into a dealer agreement with the Distributor. To
qualify for a reduction or waiver of the sales charge, you must notify the
Transfer Agent or your broker at the time of purchase. For more information,
see the SAI, "Purchase, Redemption and Pricing of Fund Shares--Reduction and
Waiver of Initial Sales Charge--Class A Shares."

Waiving Class C's Initial Sales Charge
Benefit Plans. Benefit Plans (as defined above) may purchase Class C shares
without paying an initial sales charge.

Investment of Redemption Proceeds from Other Investment Companies. The initial
sales charge will be waived for purchases of Class C shares if the purchase is
made with money from the redemption of shares of any unaffiliated investment
company. These purchases must be made within 60 days of the redemption. This
waiver is not available to investors who purchase shares directly from the
Transfer Agent. If you are entitled to the waiver, you must notify either the
Transfer Agent or your broker. The Transfer Agent may require any supporting
documents it considers appropriate.

Qualifying for Class Z Shares
Class Z shares of the Fund can be purchased by any of the following:
. Any Benefit Plan, as defined above, and certain nonqualified plans,
provided the Benefit Plan--in combination with other plans

- --------------------------------------------------------------------------------

23
<PAGE>

sponsored by the same employer or group of related employers--has at
least $50 million in defined contribution assets;
. Current and former Trustees of the Company; and
. The Manager or an investment adviser or one of its respective affiliates
with an investment of $10 million or more.

In connection with the sale of shares, the Manager, the Distributor or one
of their affiliates may pay brokers, financial advisers and other persons a
commission of up to 4% of the purchase price for Class B shares, up to 2% of
the purchase price for Class C shares and a finder's fee for Class A or Class Z
shares from their own resources based on a percentage of the net asset value of
shares sold or otherwise.

Class B Shares Convert to Class A Shares After Approximately Seven Years
If you buy Class B shares and hold them for approximately seven years, we will
automatically convert them into Class A shares without charge. At that time, we
will also convert any Class B shares that you purchased with reinvested
dividends and other distributions. Since the 12b-1 fees for Class A shares are
lower than for Class B shares, converting to Class A shares lowers your Fund
expenses.
When we do the conversion, you will get fewer Class A shares than the number
of converted Class B shares if the price of the Class A shares is higher than
the price of Class B shares. The total dollar value will be the same, so you
will not have lost any money by getting fewer Class A shares. We do the
conversions quarterly, not on the anniversary date of your purchase. For more
information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares--
Conversion Feature--Class B Shares."

Step 3: Understanding the Price You'll Pay
The price you pay for each share of the Fund is based on the share value. The
share value of a mutual fund--known as the net asset value or NAV--is
determined by a simple calculation: it's the total value of the Fund (assets
minus liabilities) divided by the total number of shares outstanding. For
example, if the value of the investments held by Fund XYZ (minus its
liabilities) is $1,000 and there are 100 shares of Fund XYZ owned by
shareholders, the price of one share of the fund--or the NAV--is $10 ($1,000
divided by 100). Portfolio securities are valued based upon market

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24 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

- --------------------------------------------------------------------------------
Mutual Fund Shares
The NAV of mutual fund shares changes every day because the value of a fund's
portfolio changes constantly. For example, if Fund XYZ holds ACME Corp. stock
in its portfolio and the price of ACME stock goes up while the value of the
fund's other holdings remains the same and expenses don't change, the NAV of
Fund XYZ will increase.

- --------------------------------------------------------------------------------
quotations or, if not readily available, at fair value as determined in good
faith under procedures established by the Company's Board. Most national
newspapers report the NAVs of most mutual funds, which allows investors to
check the price of mutual funds daily.
We determine the NAV of our shares once each business day at 4:15 p.m. New
York Time on days that the New York Stock Exchange (NYSE) is open for trading.
The NYSE is closed on national holidays and Good Friday. We do not determine
the NAV on days when we have not received any orders to purchase, sell or
exchange Fund shares, or when changes in the value of the Fund's portfolio do
not materially affect the NAV.

What Price Will You Pay for Shares of the Fund?
For Class A and Class C shares, you'll pay the public offering price, which is
the NAV next determined after we receive your order to purchase, plus an
initial sales charge (unless you're entitled to a waiver). For Class B and
Class Z shares, you will pay the NAV next determined after we receive your
order to purchase (remember, there are no up-front sales charges for these
share classes). Your broker may charge you a separate or additional fee for
purchases of shares.

Step 4: Additional Shareholder Services
As a Fund shareholder, you can take advantage of the following services and
privileges:

Automatic Reinvestment. As we explained in the "Fund Distributions and Tax
Issues" section, the Fund pays out--or distributes--its net investment income
and capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Fund at NAV without any sales
charge. If you want your distributions paid in cash, you can indicate this
preference on your application, notify your broker or notify the Transfer Agent
in writing (at the address below) at least five business days before the date
we determine who receives dividends.

- --------------------------------------------------------------------------------

25
<PAGE>

Prudential Mutual Fund Services LLC
Attn: Account Maintenance
P.O. Box 15015
New Brunswick, NJ 08906-5015

Automatic Investment Plan. You can make regular purchases of the Fund for as
little as $50 by having the funds automatically withdrawn from your bank or
brokerage account at specified intervals.

Systematic Withdrawal Plan. A systematic withdrawal plan is available that will
provide you with monthly, quarterly, semi-annual or annual redemption checks.
Remember, the sale of Class B and Class C shares may be subject to a CDSC.

Reports to Shareholders. Every year we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Fund. To reduce Fund expenses, we will send one
annual shareholder report, one semi-annual shareholder report and one annual
prospectus per household, unless you instruct us or your broker otherwise.

HOW TO SELL YOUR SHARES
You can sell your shares of the Fund for cash (in the form of a check) at any
time, subject to certain restrictions.
When you sell shares of the Fund--also known as redeeming your shares--the
price you will receive will be the NAV next determined after the Transfer
Agent, the Distributor or your broker receives your order to sell. If your
broker holds your shares, your broker must receive your order to sell by 4:15
p.m. New York Time to process the sale on that day. Otherwise contact:

Prudential Mutual Fund Services LLC
Attn: Redemption Services
P.O. Box 15010
New Brunswick, NJ 08906-5010

Generally, we will pay you for the shares that you sell within seven days
after the Transfer Agent, the Distributor or your broker receives your sell

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26 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

order. If you hold shares through a broker, payment will be credited to your
account. If you are selling shares you recently purchased with a check, we may
delay sending you the proceeds until your check clears, which can take up to 10
days from the purchase date. You can avoid delay if you purchase shares by
wire, certified check or cashier's check. Your broker may charge you a separate
or additional fee for sales of shares.

Restrictions on Sales
There are certain times when you may not be able to sell shares of the Fund, or
when we may delay paying you the proceeds from a sale. This may happen during
unusual market conditions or emergencies when the Fund can't determine the
value of its assets or sell its holdings. For more information, see the SAI,
"Purchase, Redemption and Pricing of Fund Shares--Sale of Shares. "
If you are selling more than $100,000 of shares, you want the check sent to
someone or some place that is not in our records or you are a business or a
trust and if you hold your shares directly with the Transfer Agent, you will
need to have the signature on your sell order "signature guaranteed" by an
"eligible guarantor institution." "Eligible guarantor institution" includes any
bank, broker-dealer or credit union. For more information, see the SAI,
Purchase, Redemption and Pricing of Fund Shares--Sale of Shares--Signature
Guarantee.

Contingent Deferred Sales Charge (CDSC)
If you sell Class B shares within six years of purchase or Class C shares
within 18 months of purchase, you will have to pay a CDSC. To keep the CDSC as
low as possible, we will sell amounts representing shares in the following
order:
. Amounts representing shares you purchased with reinvested dividends and
distributions;
. Amounts representing the increase in NAV above the total amount of
payments for shares made during the past six years for Class B shares and
18 months for Class C shares; and
. Amounts representing the cost of shares held beyond the CDSC period (six
years for Class B shares and 18 months for Class C shares).

- --------------------------------------------------------------------------------

27
<PAGE>

Since shares that fall into any of the categories listed above are not
subject to the CDSC, selling them first helps you to avoid--or at least
minimize--the CDSC.
Having sold the exempt shares first, if there are any remaining shares that
are subject to the CDSC, we will apply the CDSC to amounts representing the
cost of shares held for the longest period of time within the applicable CDSC
period.
As we noted before in the Share Class Comparison chart, the CDSC for Class B
shares is 5% in the first year, 4% in the second, 3% in the third, 2% in the
fourth and 1% in the fifth and sixth years. The rate decreases on the first day
of the month following the anniversary date of your purchase, not on the
anniversary date itself. The CDSC is 1% for Class C shares--which is applied to
shares sold within 18 months of purchase. For both Class B and Class C shares,
the CDSC is calculated based on the lesser of the original purchase price or
the redemption proceeds. For purposes of determining how long you've held your
shares, all purchases during the month are grouped together and considered to
have been made on the last day of the month.
The holding period for purposes of determining the applicable CDSC will be
calculated from the first day of the month after initial purchase, excluding
any time shares were held in a money market fund.

Waiver of the CDSC--Class B Shares
The CDSC will be waived if the Class B shares are sold:
. After a shareholder is deceased or disabled (or, in the case of a trust
account, the death or disability of the grantor). This waiver applies to
individual shareholders, as well as shares owned in joint tenancy,
provided the shares were purchased before the death or disability
. To provide for certain distributions--made without IRS penalty--from a
tax-deferred retirement plan, IRA or Section 403(b) custodial account
. On certain sales from a Systematic Withdrawal Plan.

For more information on the above and other waivers, see the SAI, "Purchase,
Redemption and Pricing of Fund Shares--Waiver of Contingent Deferred Sales
Charge--Class B Shares."

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28 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

Waiver of the CDSC--Class C Shares
Benefit Plans. The CDSC will be waived on redemptions from Benefit Plans
holding shares through a broker for which the broker provides administrative or
recordkeeping services.

Redemption in Kind
If the sales of Fund shares you make during any 90-day period reach the lesser
of $250,000 or 1% of the value of the Fund's net assets, we can then give you
securities from the Fund's portfolio instead of cash. If you want to sell the
securities for cash, you would have to pay the costs charged by a broker.

Small Accounts
If you make a sale that reduces your account value to less than $1000, we may
sell the rest of your shares (without charging any CDSC) and close your
account. We would do this to minimize the Fund's expenses paid by other
shareholders. We will give you 60 days' notice, during which time you can
purchase additional shares to avoid this action. This involuntary sale does not
apply to shareholders who own their shares as part of a 401(k) plan, an IRA or
some other tax-deferred plan or account.

90-Day Repurchase Privilege
After you redeem your shares, you have a 90-day period during which you may
reinvest any of the redemption proceeds in shares of the Fund without paying an
initial sales charge. Also, if you paid a CDSC when you redeemed your shares,
we will credit your new account with the appropriate number of shares to
reflect the amount of the CDSC you paid. In order to take advantage of this
one-time privilege, you must notify the Transfer Agent or your broker at the
time of the repurchase. See the SAI, Purchase, Redemption and Pricing of Fund
Shares--Sale of Shares.

Retirement Plans
To sell shares and receive a distribution from a retirement account, call your
broker or the Transfer Agent for a distribution request form. There are special
distribution and income tax withholding requirements for distributions from
retirement plans and you must submit a withholding form with your request to
avoid delay. If your retirement plan account is held for

- --------------------------------------------------------------------------------

29
<PAGE>

you by your employer or plan trustee, you must arrange for the distribution
request to be signed and sent by the plan administrator or trustee. For
additional information, see the SAI.

Frequent Trading
Frequent trading of Fund shares in response to short-term fluctuations in the
market--also known as "market timing"--may make it very difficult to manage the
Fund's investments. When market timing occurs, the Fund may have to sell
portfolio securities to have the cash necessary to redeem the market timer's
shares. This can happen at a time when it is not advantageous to sell any
securities, so the Fund's performance may be hurt. When large dollar amounts
are involved, market timing can also make it difficult to use long-term
investment strategies because we cannot predict how much cash the Fund will
have to invest. When, in our opinion, such activity would have a disruptive
effect on portfolio management, the Fund reserves the right to refuse purchase
orders and exchanges into the Fund by any person, group or commonly controlled
account. The decision may be based upon dollar amount, volume and frequency or
trading. The Fund may notify a market timer of rejection of an exchange or
purchase order after the day the order is placed. If the Fund allows a market
timer to trade Fund shares, it may require the market timer to enter into a
written agreement to follow certain procedures and limitations.

TELEPHONE REDEMPTIONS
You may redeem your shares in any amount by calling the Fund at (800) 225-1852.
In order to redeem your shares by telephone, you must call the Fund before 4:15
p.m., New York time, to receive a redemption amount based on that day's NAV.
The Fund's Transfer Agent will record your telephone instructions and
request specific account information before redeeming shares. The Fund will not
be liable if it follows instructions that it reasonably believes are made by
the shareholder. If the Fund does not follow reasonable procedures, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.
In the event of drastic economic or market changes, you may have difficulty
in redeeming your shares by telephone. If this occurs, you should consider
redeeming your shares by mail or through your broker.
The telephone redemption procedure may be modified or terminated at any
time. If this occurs, you will receive a written notice from the Fund.

- --------------------------------------------------------------------------------
30 Strategic Partners Focused Growth Fund [GRAPHIC] (800) 225-1852
<PAGE>

FOR MORE INFORMATION
________________________________________________________________________________

Please read this prospectus before you invest in the Fund and keep it for fu-
ture reference. For information or shareholder questions contact:

Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906-5005
(800) 225-1853
(732) 417-7555
(Calling outside the U.S.)
- --------------------------------------------------------------------------------
Brokers Should Contact:
Prudential Investment Management Services LLC
P.O. Box 15035
New Brunswick, NJ 08906-5035
(800) 778-8769

- --------------------------------------------------------------------------------
Additional information about the Fund can be obtained without charge and can be
found in the following documents:

Statement of Additional Information (SAI)
(incorporated by reference into this prospectus)

Annual Report
(contains a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance)

Semi-Annual Report

You can also obtain copies of Fund documents from the Securities and Exchange
Commission as follows:

By Mail:
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-6009

By Electronic Request:
[email protected]
(The SEC charges a fee to copy documents.)

In Person:
Public Reference Room in Washington, DC
(For hours of operation, call 1-202-942-8090.)

Via the Internet: on the EDGAR Database at http://www.sec.gov

- --------------------------------------------------------------------------------
CUSIP Nos.: Quotron Symbols:
Class A:
Class B:
Class C:
Class Z:

Investment Company Act File No.: 811-

MF A [LOGO OF RECYCLABLES] Printed on Recycled Paper
<PAGE>

STRATEGIC PARTNERS FOCUSED GROWTH FUND

Statement of Additional Information
dated ,2000

Strategic Partners Focused Growth Fund (the Fund) is a non-diversified
series of Strategic Partners Series, an open-end, management investment
company (the Company). The investment objective of the Fund is long-term
growth of capital. It seeks to achieve this objective by investing primarily
in approximately 40 equity-related securities of U.S. companies that are
selected by the Fund's two investment advisers (approximately 20 by each) as
having strong growth potential. There can be no assurance that the Fund's
investment objective will be achieved. See "Description of the Fund, Its
Investments and Risks."

The Company's address is Gateway Center Three, 100 Mulberry Street, Newark,
New Jersey 07102-4077, and its telephone number is (800) 225-1852.

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus of the Fund dated ,2000, a copy
of which may be obtained from the Company upon request.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Fund History............................................................... B-2
Description of the Fund, Its Investments and Risks......................... B-2
Investment Restrictions.................................................... B-14
Management of the Company.................................................. B-15
Control Persons and Principal Holders of Securities........................ B-18
Investment Advisory and Other Services..................................... B-18
Brokerage Allocation and Other Practices................................... B-21
Capital Shares, Other Securities and Organization.......................... B-23
Purchase, Redemption and Pricing of Fund Shares............................ B-24
Shareholder Investment Account............................................. B-32
Net Asset Value............................................................ B-34
Taxes, Dividends and Distributions......................................... B-35
Performance Information.................................................... B-37
Financial Statements....................................................... B-
Report of Independent Accountants.......................................... B-
Appendix I General Investment Information.................................. I-1
</TABLE>

- -------------------------------------------------------------------------------
MFB
<PAGE>

FUND HISTORY

Strategic Partners Focused Growth Fund (the Fund) is a series of Strategic
Partners Series (the Company), which was established as a Delaware business
trust on January 2000.

DESCRIPTION OF THE FUND, ITS INVESTMENTS AND RISKS

(a) Classification. The Company is a non-diversified series of an open-end,
management investment company.

(b) and (c) Investment Strategies, Policies and Risks. The Fund's investment
objective is long-term growth of capital. Under normal market conditions, the
Fund intends to invest primarily (at least 65% of its total assets) in
approximately 40 equity-related securities of U.S. companies that are selected
by the Fund's two investment advisers (approximately 20 by each) as having
strong growth potential. While the principal investment policies and
strategies for seeking to achieve this objective are described in the Fund's
Prospectus, the Fund may from time to time also use the securities,
instruments, principal and non-principal policies and strategies described
below in seeking to achieve its objective. The Fund may not be successful in
achieving its objective and you can lose money.

Equity-Related Securities

Equity-related securities include common stocks as well as preferred stocks,
securities convertible into or exchangeable for common or preferred stocks,
equity investments in partnerships, joint ventures and other forms of non-
corporate investment, American Depositary Receipts (ADRs), American Depositary
Shares (ADSs) and warrants and rights exercisable for equity securities.
Purchased options are not considered equity securities for the Fund's
purposes. The Fund will not invest more than 5% of its total assets in
unattached rights and warrants.

American Depositary Receipts (ADRs) and American Depositary Shares (ADSs).
ADRs and ADSs are U.S. dollar-denominated certificates or shares issued by a
United States bank or trust company and represent the right to receive
securities of a foreign issuer deposited in a domestic bank or foreign branch
of a United States bank and traded on a United States exchange or in the over-
the-counter market. Generally, ADRs and ADSs are in registered form. There are
no fees imposed on the purchase or sale of ADRs and ADSs when purchased from
the issuing bank or trust company in the initial underwriting, although the
issuing bank or trust company may impose charges for the collection of
dividends and the conversion of ADRs and ADSs into the underlying securities.
Investment in ADRs and ADSs has certain advantages over direct investment in
the underlying foreign securities since: (1) ADRs and ADSs are denominated in
U.S. dollars, registered domestically, easily transferable, and market
quotations are readily available for them; and (2) issuers whose securities
are represented by ADRs and ADSs are usually subject to auditing, accounting,
and financial reporting standards comparable to those of domestic issuers.

Warrants and Rights. A warrant gives the holder thereof the right to
subscribe by a specified date to a stated number of shares of stock of the
issuer at a fixed price. Warrants tend to be more volatile than the underlying
stock, and if, at a warrant's expiration date the stock is trading at a price
below the price set in the warrant, the warrant will expire worthless.
Conversely, if at the expiration date, the underlying stock is trading at a
price higher than the price set in the warrant, the Fund can acquire the stock
at a price below its market value. Rights are similar to warrants but normally
have a shorter duration and are distributed directly by the issuer to
shareholders. Rights and warrants have no voting rights, receive no dividends
and have no rights with respect to the corporation issuing them.

U.S. Government Securities

U.S. Treasury Securities. The Fund is permitted to invest in U.S. Treasury
securities, including bills, notes, bonds and other debt securities issued by
the U.S. Treasury. These instruments are direct obligations of the U.S.
Government and, as such, are backed by the "full faith and credit" of the
United States. They differ primarily in their interest rates, the lengths of
their maturities and the dates of their issuances.

Securities Issued or Guaranteed by U.S. Government Agencies and
Instrumentalities. The Fund may invest in securities issued by agencies of
the U.S. Government or instrumentalities of the U.S. Government. These
obligations, including those which are guaranteed by Federal agencies or
instrumentalities, may or may not be backed by the full faith and credit of
the United States. Obligations of the Government National Mortgage Association
(GNMA), the Farmers Home Administration and the Small Business Administration
are backed by the full faith and credit of the United States. In the case of
securities not backed by the full faith and credit of the United States, the
Fund must look principally to the agency issuing or guaranteeing the
obligation for

B-2
<PAGE>

ultimate repayment and may not be able to assert a claim against the United
States if the agency or instrumentality does not meet its commitments.
Securities in which the Fund may invest which are not backed by the full faith
and credit of the United States include obligations such as those issued by
the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation
(FHLMC), the Federal National Mortgage Association, the Student Loan Marketing
Association, Resolution Funding Corporation and the Tennessee Valley
Authority, each of which has the right to borrow from the U.S. Treasury to
meet its obligations, and obligations of the Farm Credit System, the
obligations of which may be satisfied only by the individual credit of the
issuing agency. FHLMC investments may include collateralized mortgage
obligations.

Obligations issued or guaranteed as to principal and interest by the U.S.
Government may be acquired by the Fund in the form of custodial receipts that
evidence ownership of future interest payments, principal payments or both on
certain U.S. Treasury notes or bonds. Such notes and bonds are held in custody
by a bank on behalf of the owners. These custodial receipts are commonly
referred to as Treasury strips.

The values of U.S. Government securities (like those of other fixed-income
securities generally) will change as interest rates fluctuate. During periods
of falling U.S. interest rates, the values of U.S. Government securities
generally rise and, conversely, during periods of rising interest rates, the
values of such securities generally decline. The magnitude of these
fluctuations will generally be greater for securities with longer-term
maturities.

Foreign Investments

The Fund is permitted to invest up to 20% of its total assets in securities
of foreign issuers, including money market instruments and debt and equity
securities. ADRs and ADSs are not considered foreign securities within this
limitation.

Investing in securities of foreign issuers and countries involves certain
considerations and risks which are not typically associated with investing in
securities of domestic companies. Foreign issuers are not generally subject to
uniform accounting, auditing and financial standards or other requirements
comparable to those applicable to U.S. companies. There may also be less
government supervision and regulation of foreign securities exchanges, brokers
and public companies than exist in the United States. Dividends and interest
paid by foreign issuers may be subject to withholding and other foreign taxes
which may decrease the net return on such investments as compared to dividends
and interest paid to the Fund by domestic companies. There may be the
possibility of expropriations, confiscatory taxation, political, economic or
social instability or diplomatic developments which could affect assets of the
Fund held in foreign countries.

There may be less publicly available information about foreign issuers and
governments compared to reports and ratings published about U.S. companies.
Foreign securities markets have substantially less volume than, for example,
the New York Stock Exchange and securities of some foreign issuers are less
liquid and more volatile than securities of comparable U.S. companies.
Brokerage commissions and other transaction costs of foreign securities
exchanges are generally higher than in the United States.

In addition, if the security is denominated in a foreign currency, it will
be affected by changes in currency exchange rates and in exchange control
regulations, and costs will be incurred in connection with conversions between
currencies. A change in the value of any such currency against the U.S. dollar
will result in a corresponding change in the U.S. dollar value of the Fund's
securities denominated in that currency. Such changes also will affect the
Fund's income and distributions to shareholders. In addition, although the
Fund will receive income in such currencies, the Fund will be required to
compute and distribute its income in U.S. dollars. Therefore, if the exchange
rate for any such currency declines after the Fund's income has been accrued
and translated into U.S. dollars, the Fund could be required to liquidate
portfolio securities to make such distributions, particularly in instances in
which the amount of income the Fund is required to distribute is not
immediately reduced by the decline in such currency. Similarly, if an exchange
rate declines between the time the Fund incurs expenses in U.S. dollars and
the time such expenses are paid, the amount of such currency required to be
converted into U.S. dollars in order to pay such expenses in U.S. dollars will
be greater than the equivalent amount in any such currency of such expenses at
the time they were incurred. The Fund may, but need not, enter into foreign
currency forward contracts, options on foreign currencies and futures
contracts on foreign currencies and related options, for hedging purposes,
including: locking-in the U.S. dollar price of the purchase or sale of
securities denominated in a foreign currency; locking-in the U.S. dollar
equivalent of dividends to be paid on such securities which are held by the
Fund; and protecting the U.S. dollar value of such securities which are held
by the Fund.

Under the Internal Revenue Code of 1986, as amended (the Internal Revenue
Code), changes in an exchange rate which occur between the time the Fund
accrues interest or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities will result in foreign currency gains or
losses that increase or decrease an investment company's taxable income. The
exchange rates between the U.S. dollar and other

B-3
<PAGE>

currencies can be volatile and are determined by such factors as supply and
demand in the currency exchange markets, international balances of payments,
government intervention, speculation and other economic and political
conditions.

Foreign securities include securities of any foreign country an investment
adviser considers appropriate for investment by the Fund. Foreign securities
may also include securities of foreign issuers that are traded in U.S. dollars
in the United States although the underlying security is usually denominated
in a foreign currency.

The costs attributable to foreign investing are higher than the costs of
domestic investing. For example, the cost of maintaining custody of foreign
securities generally exceeds custodian costs for domestic securities, and
transaction and settlement costs of foreign investing are frequently higher
than those attributable to domestic investing. Foreign investment income may
be subject to foreign withholding or other government taxes that could reduce
the return to the Fund on those securities. Tax treaties between the United
States and certain foreign countries may, however, reduce or eliminate the
amount of foreign tax to which the Fund would be subject.

Risk Factors and Special Considerations of Investing in Euro-Denominated
Securities

On January 1, 1999, 11 of the 15 member states of the European Monetary
Union introduced the "euro" as a common currency. During a three-year
transitional period, the euro will coexist with each participating state's
currency and, on July 1, 2002, the euro is expected to become the sole
currency of the participating states. During the transition period, the Fund
will treat the euro as a separate currency from that of any participating
state.

The conversion may adversely affect the Fund if the transition to the euro
does not take effect as planned; if a participating state withdraws from the
European Monetary Union; or if the computing, accounting and trading systems
used by the Fund's service providers, or by entities with which the Fund or
its service providers do business, are not capable of recognizing the euro as
a distinct currency during the transition to the euro. In addition, the
conversion could cause markets to become more volatile.

The overall effect of the transition of member states' currencies to the
euro is not known at this time. It is likely that more general short- and
long-term ramifications can be expected, such as changes in the economic
environment and change in the behavior of investors, which would affect the
Fund's investments and its net asset value. In addition, although U.S.
Treasury regulations generally provide that the euro conversion will not, in
itself, cause a U.S. taxpayer to realize gain or loss, other changes that may
occur at the time of the conversion, such as accrual periods, holiday
conventions, indexes, and other features may require the realization of a gain
or loss by the Fund as determined under existing tax law.

Risk Management and Return Enhancement Strategies

The Fund also may engage in various portfolio strategies, including using
derivatives, to seek to reduce certain risks of its investments and to attempt
to enhance return. These strategies currently include the use of options on
stock indexes and futures contracts and options on indexes. The Fund also may
purchase futures contracts on foreign currencies and on debt securities and
aggregates of debt securities. The Fund's ability to use these strategies may
be limited by various factors, such as market conditions, regulatory limits
and tax considerations and there can be no assurance that any of these
strategies will succeed. The Fund, and thus its investors, may lose money
through any unsuccessful use of these strategies. If new financial products
and risk management techniques are developed, the Fund may use them to the
extent consistent with its investment objective and policies.

Options on Securities Indexes. The Fund may purchase and write (that is,
sell) put and call options on securities indexes that are traded on U.S. or
foreign securities exchanges or in the over-the-counter market to try to
enhance return or to hedge the Fund's portfolio. The Fund may write covered
put and call options to generate additional income through the receipt of
premiums, purchase put options in an effort to protect the value of a security
that it owns against a decline in market value and purchase call options in an
effort to protect against an increase in the price of securities it intends to
purchase. The Fund also may purchase put and call options to offset previously
written put and call options of the same series.

A call option gives the purchaser, in exchange for a premium paid, the
right, for a specified period of time, to purchase the position subject to the
option at a specified price (the exercise price or strike price). The writer
of a call option, in return for the premium, has the obligation, upon exercise
of the option, to deliver a specified amount of cash to the purchaser upon
receipt of the exercise price. When the Fund writes a call option, the Fund
gives up the potential for gain on the underlying position in excess of the
exercise price of the option during the period that the option is open. A put
option gives the purchaser, in return for a premium, the right, for a
specified period of time, to sell the position subject to the option to the
writer of the put at the specified exercise price. The writer of the put
option, in return for the premium, has the obligation, upon exercise of the
option, to acquire the position

B-4
<PAGE>

at the exercise price. The Fund might, therefore, be obligated to purchase the
underlying position for more than its current market price.

The Fund will write only "covered" options. A written option is covered if,
as long as the Fund is obligated under the option, it (1) owns an offsetting
position in the underlying securities that comprise the index or (2)
segregates cash or other liquid assets in an amount equal to or greater than
its obligation under the option. Under the first circumstance, the Fund's
losses are limited because it owns the underlying position; under the second
circumstance, in the case of a written call option, the Fund's losses are
potentially unlimited. There is no limitation on the amount of call options
the Fund may write.

The multiplier for an index option performs a function similar to the unit
of trading for a stock option. It determines the total dollar value per
contract of each point in the difference between the exercise price of an
option and the current level of the underlying index. A multiplier of 100
means that a one-point difference will yield $100. Options on different
indexes may have different multipliers. Because exercises of index options are
settled in cash, a call writer cannot determine the amount of its settlement
obligations in advance and, unlike call writing on specific stocks, cannot
provide in advance for, or cover, its potential settlement obligations by
acquiring and holding the underlying securities. In addition, unless the Fund
has other liquid assets which are sufficient to satisfy the exercise of a
call, the Fund would be required to liquidate portfolio securities or borrow
in order to satisfy the exercise.

Because the value of an index option depends upon movements in the level of
the index rather than the price of a particular security, whether the Fund
will realize a gain or loss on the purchase or sale of an option on an index
depends upon movements in the level of securities prices in the market
generally or in an industry or market segment rather than movements in the
price of a particular security. Accordingly, successful use by the Fund of
options on indexes would be subject to an investment adviser's ability to
predict correctly movements in the direction of the securities market
generally or of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual stocks. The
investment advisers currently use such techniques in conjunction with the
management of other mutual funds.

Risks of Transactions in Options. An option position may be closed out only
on an exchange, board of trade or other trading facility which provides a
secondary market for an option of the same series. Although the Fund will
generally purchase or write only those options for which there appears to be
an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any
particular time, and for some options no secondary market on an exchange or
otherwise may exist. In such event it might not be possible to effect closing
transactions in particular options, with the result that the Fund would have
to exercise its options in order to realize any profit and would incur
brokerage commissions upon the exercise of call options and upon the
subsequent disposition of underlying securities acquired through the exercise
of call options or upon the purchase of underlying securities for the exercise
of put options. If the Fund as a covered call option writer is unable to
effect a closing purchase transaction in a secondary market, it will not be
able to sell the underlying security until the option expires or it delivers
the underlying security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange include
the following: (1) there may be insufficient trading interest in certain
options; (2) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (3) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities; (4) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (5) the
facilities of an exchange or a clearing corporation may not at all times be
adequate to handle current trading volume; or (6) one or more exchanges could,
for economic or other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of
options), in which event the secondary market on that exchange (or in the
class or series of options) would cease to exist, although outstanding options
on that exchange that had been issued by a clearing corporation as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms. There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render certain of the
facilities of any of the clearing corporations inadequate, and thereby result
in the institution by an exchange of special procedures which may interfere
with the timely execution of customers' orders. The Fund intends to purchase
and sell only those options which are cleared by clearinghouses whose
facilities are considered to be adequate to handle the volume of options
transactions.

Risks of Options on Indexes. The Fund's purchase and sale of options on
indexes will be subject to risks described above under "Risks of Transactions
in Options." In addition, the distinctive characteristics of options on
indexes create certain risks that are not present with stock options.

Index prices may be distorted if trading of certain stocks included in the
index is interrupted. Trading in the index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number
of stocks included in the index. If this occurred, the Fund would not be able
to close out options which it had purchased or written and, if restrictions on
exercise

B-5
<PAGE>

were imposed, may be unable to exercise an option it holds, which could result
in substantial losses to the Fund. It is the Fund's policy to purchase or
write options only on indexes which include a number of stocks sufficient to
minimize the likelihood of a trading halt in the index.

The ability to establish and close out positions on such options will be
subject to the development and maintenance of a liquid secondary market. It is
not certain that this market will develop in all index option contracts. The
Fund will not purchase or sell any index option contract unless and until, in
an investment adviser's opinion, the market for such options has developed
sufficiently that the risk in connection with such transactions is not
substantially greater than the risk in connection with options on securities
in the index.

Special Risks of Writing Calls on Indexes. Because exercises of index
options are settled in cash, a call writer such as the Fund cannot determine
the amount of its settlement obligations in advance and, unlike call writing
on specific stocks, cannot provide in advance for, or cover, its potential
settlement obligations by acquiring and holding the underlying securities.
However, the Fund will write call options on indexes only under the
circumstances described below under "Limitations on the Purchase and Sale of
Options on Stock Indexes and Futures Contracts and Options on Futures
Contracts."

Price movements in the Fund's portfolio probably will not correlate
precisely with movements in the level of the index and, therefore, the Fund
bears the risk that the price of the securities held by the Fund may not
increase as much as the index. In such event, the Fund would bear a loss on
the call which is not completely offset by movements in the price of the
Fund's portfolio. It is also possible that the index may rise when the Fund's
portfolio of stocks does not rise. If this occurred, the Fund would experience
a loss on the call which is not offset by an increase in the value of its
portfolio and might also experience a loss in its portfolio. However, because
the value of a diversified portfolio will, over time, tend to move in the same
direction as the market, movements in the value of the Fund in the opposite
direction as the market would be likely to occur for only a short period or to
a small degree.

Unless the Fund has other liquid assets which are sufficient to satisfy the
exercise of a call, the Fund would be required to liquidate portfolio
securities in order to satisfy the exercise. Because an exercise must be
settled within hours after receiving the notice of exercise, if the Fund fails
to anticipate an exercise, it may have to borrow from a bank (in amounts not
exceeding 20% of the Fund's total assets) pending settlement of the sale of
securities in its portfolio and would incur interest charges thereon.

When the Fund has written a call, there is also a risk that the market may
decline between the time the Fund has a call exercised against it, at a price
which is fixed as of the closing level of the index on the date of exercise,
and the time the Fund is able to sell stocks in its portfolio. As with stock
options, the Fund will not learn that an index option has been exercised until
the day following the exercise date but, unlike a call on stock where the Fund
would be able to deliver the underlying securities in settlement, the Fund may
have to sell part of its investment portfolio in order to make settlement in
cash, and the price of such investments might decline before they can be sold.
This timing risk makes certain strategies involving more than one option
substantially more risky with index options than with stock options. For
example, even if an index call which the Fund has written is "covered" by an
index call held by the Fund with the same strike price, the Fund will bear the
risk that the level of the index may decline between the close of trading on
the date the exercise notice is filed with the clearing corporation and the
close of trading on the date the Fund exercises the call it holds or the time
the Fund sells the call which, in either case, would occur no earlier than the
day following the day the exercise notice was filed.

If the Fund holds an index option and exercises it before final
determination of the closing index value for that day, it runs the risk that
the level of the underlying index may change before closing. If such a change
causes the exercised option to fall out-of-the-money, the Fund will be
required to pay the difference between the closing index value and the
exercise price of the option (times the applicable multiplier) to the assigned
writer. Although the Fund may be able to minimize this risk by withholding
exercise instructions until just before the daily cutoff time or by selling
rather than exercising an option when the index level is close to the exercise
price, it may not be possible to eliminate this risk entirely because the
cutoff times for index options may be earlier than those fixed for other types
of options and may occur before definitive closing index values are announced.

Futures Contracts. As a purchaser of a futures contract, the Fund incurs an
obligation to take delivery of a specified amount of the obligation underlying
the futures contract at a specified time in the future for a specified price.
As a seller of a futures contract, the Fund incurs an obligation to deliver
the specified amount of the underlying obligation at a specified time in
return for an agreed upon price. The Fund may purchase futures contracts on
stock indexes and foreign currencies. The Fund may purchase futures contracts
on debt securities, including U.S. Government securities, aggregates of debt
securities, stock indexes and foreign currencies.

B-6
<PAGE>

A "sale" of a futures contract (or a "short" futures position) means the
assumption of a contractual obligation to deliver the securities or currency
underlying the contract at a specified price at a specified future time. A
"purchase" of a futures contract (or a "long" futures position) means the
assumption of a contractual obligation to acquire the securities or currency
underlying the contract at a specified price at a specified future time.
Certain futures contracts are settled on a net cash payment basis rather than
by the sale and delivery of the securities or currency underlying the futures
contract. U.S. futures contracts have been designed by exchanges that have
been designated as "contract markets" by the Commodity Futures Trading
Commission (the CFTC), an agency of the U.S. Government, and must be executed
through a futures commission merchant (that is, a brokerage firm) which is a
member of the relevant contract market. Futures contracts trade on these
contract markets and the exchange's affiliated clearing organization
guarantees performance of the contracts as between the clearing members of the
exchange.

At the time a futures contract is purchased or sold, the Fund must allocate
cash or securities as a deposit payment (initial margin). It is expected that
the initial margin on U.S. exchanges will vary from one-half of 1% to 4% of
the face value of the contract. Under certain circumstances, however, such as
during periods of high volatility, the Fund may be required by an exchange to
increase the level of its initial margin payment. Thereafter, the futures
contract is valued daily and the payment in cash of "variation margin" may be
required, a process known as "mark-to-the-market." Each day the Fund is
required to provide or is entitled to receive variation margin in an amount
equal to any change in the value of the contract since the preceding day.

Although most futures contracts call for actual delivery or acceptance of
securities or cash, the contracts usually are closed out before the settlement
date without the making or taking of delivery. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of the specific type of security and the same delivery date. If the
sale price exceeds the offsetting purchase price, the seller would be paid the
difference and would realize a gain. If the offsetting purchase price exceeds
the sale price, the seller would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same aggregate amount of the specific type of security
(or currency) and the same delivery date. If the offsetting sale price exceeds
the purchase price, the purchaser would realize a gain, whereas if the
purchase price exceeds the offsetting sale price, the purchaser would realize
a loss. There is no assurance that the Fund will be able to enter into a
closing transaction.

When the Fund enters into a futures contract it is initially required to
segregate with its Custodian, in the name of the broker performing the
transaction, an "initial margin" of cash or other liquid assets equal to
approximately 2% to 3% of the contract amount. Initial margin requirements are
established by the exchanges on which futures contracts trade and may, from
time to time, change. In addition, brokers may establish margin deposit
requirements in excess of those required by the exchanges.

Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing
of funds by a brokers' client but is, rather, a good faith deposit on a
futures contract which will be returned to the Fund upon the proper
termination of the futures contract. The margin deposits made are marked-to-
market daily and the Fund may be required to segregate subsequent deposits at
its Custodian for that purpose, of cash or other liquid assets, called
"variation margin," in the name of the broker, which are reflective of price
fluctuations in the futures contract.

A stock index futures contract is an agreement in which the writer (or
seller) of the contract agrees to deliver to the buyer an amount of cash equal
to a specific dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the contract and
the price at which the agreement is made. No physical delivery of the
underlying stocks in the index is made. When the futures contract is entered
into, each party deposits an initial margin with a broker or in a segregated
custodial account of approximately 5% of the contract amount. Subsequent
variation market payments will be made on a daily basis as the price of the
underlying stock index fluctuates, making the long and short positions in the
futures contracts more or less valuable.

The ordinary spreads between values in the cash and futures markets, due to
differences in the character of those markets, are subject to distortions. In
addition, futures contracts entail risks. First, all participants in the
futures market are subject to initial and variation margin requirements.
Rather than meeting additional variation margin requirements, investors may
close futures contracts through offsetting transactions which could distort
the normal relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering into
offsetting transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures market
could be reduced, thus producing price distortions. Third, from the point of
view of speculators, the margin deposit requirements in the futures market are
less onerous than margin requirements in the securities market. Increased
participation by speculators in the futures market may cause temporary price
distortions. Due to the possibility of distortion, a correct forecast of
general interest rate trends by an investment adviser may still not result in
a successful transaction.

B-7
<PAGE>

Options on Futures Contracts. The Fund will also enter into options on
futures contracts for certain bona fide hedging, return enhancement and risk
management purposes. The Fund may purchase put and call options and write
(that is, sell) "covered" put and call options on futures contracts that are
traded on U.S. and foreign exchanges. An option on a futures contract gives
the purchaser the right, but not the obligation, to assume a position in a
futures contract (a long position if the option is a call and a short position
if the option is a put) at a specified exercise price at any time during the
option exercise period. The writer of the option is required upon exercise to
assume an offsetting futures position (a short position if the option is a
call and a long position if the option is a put). If the option is exercised
by the holder before the last trading day during the option period, the option
writer delivers the futures position, as well as any balance in the writer's
futures margin account, which represents the amount by which the market price
of the stock index futures contract at exercise exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price of the option
on the stock index future. If it is exercised on the last trading day, the
option writer delivers to the option holder cash in an amount equal to the
difference between the option exercise price and the closing level of the
relevant index on the date the option expires.

The holder or writer of an option may terminate its position by selling or
purchasing an option of the same series. There is no guarantee that such
closing transactions can be effected.

The Fund may only write (that is, sell) covered put and call options on
futures contracts. The Fund will be considered "covered" with respect to a
call option it writes on a futures contract if the Fund owns the securities or
currency which is deliverable under the futures contract or an option to
purchase that futures contract having a strike price equal to or less than the
strike price of the "covered" option and having an expiration date not earlier
than the expiration date of the "covered" option, or if it segregates and
maintains with its Custodian for the term of the option cash or other liquid
assets, equal to the fluctuating value of the optioned futures. The Fund will
be considered "covered" with respect to a put option it writes on a futures
contract if it owns an option to sell that futures contract having a strike
price equal to or greater than the strike price of the "covered" option and
having an expiration date not earlier than the expiration date of the
"covered" option, or if it segregates with its Custodian for the term of the
option cash or other liquid assets at all times equal in value to the exercise
price of the put (less any initial margin deposited by the Fund with its
Custodian with respect to such put option). There is no limitation on the
amount of the Fund's assets which can be segregated.

Writing a put option on a futures contract serves as a partial hedge against
an increase in the value of securities the Fund intends to acquire. If the
futures price at expiration of the option is above the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any increase that may have occurred in the price of the
securities the Fund intends to acquire. If the market price of the underlying
futures contract is below the exercise price when the option is exercised, the
Fund will incur a loss, which may be wholly or partially offset by the
decrease in the value of the securities the Fund intends to acquire.

Writing a call option on a futures contract serves as a partial hedge
against a decrease in the value of the Fund's portfolio securities. If the
market price of the underlying futures contract at expiration of a written
call option is below the exercise price, the Fund will retain the full amount
of the option premium, thereby partially hedging against any decline that may
have occurred in the Fund's holdings of securities. If the futures price when
the option is exercised is above the exercise price, however, the Fund will
incur a loss, which may be wholly or partially offset by the increase in the
value of the securities in the Fund's portfolio which were being hedged.

The Fund will purchase put options on futures contracts to hedge its
portfolio against the risk of a decline in the value of the securities it owns
as a result of market activity or fluctuating currency exchange rates. The
Fund will also purchase call options on futures contracts as a hedge against
an increase in the value of securities the Fund intends to acquire as a result
of market activity or fluctuating currency exchange rates.

Futures Contracts on Foreign Currencies and Options Thereon. The Fund may
buy and sell futures contracts on foreign currencies and purchase and write
options thereon. Generally, foreign currency futures contracts and options
thereon are similar to the futures contracts and options thereon discussed
previously. By entering into currency futures and options thereon on U.S. and
foreign exchanges, the Fund will seek to establish the rate at which it will
be entitled to exchange U.S. dollars for another currency at a future time. By
selling currency futures, the Fund will seek to establish the number of
dollars it will receive at delivery for a certain amount of a foreign
currency. In this way, whenever the Fund anticipates a decline in the value of
a foreign currency against the U.S. dollar, the Fund can attempt to "lock in"
the U.S. dollar value of some or all of the securities held in its portfolio
that are denominated in that currency. By purchasing currency futures, the
Fund can establish the number of dollars it will be required to pay for a
specified amount of a foreign currency in a future month. Thus if the Fund
intends to buy securities in the future and expects the U.S. dollar to decline
against the relevant foreign currency during the period before the purchase is
effected, the Fund

B-8
<PAGE>

can attempt to "lock in" the price in U.S. dollars of the securities it
intends to acquire. At the time a futures contract is purchased or sold, the
Fund must allocate cash or securities as initial margin. Thereafter, the
futures contract is valued daily and the payment of "variation margin" may be
required, resulting in the Fund's paying or receiving cash that reflects any
decline or increase, respectively, in the contract's value, that is, "marked-
to-market."

The purchase of options on currency futures will allow the Fund, for the
price of the premium and related transaction costs it must pay for the option,
to decide whether or not to buy (in the case of a call option) or to sell (in
the case of a put option) a futures contract at a specified price at any time
during the period before the option expires. If an investment adviser, in
purchasing an option, has been correct in its judgment concerning the
direction in which the market or the price of a foreign currency would move as
against the U.S. dollar, the Fund may exercise the option and thereby take a
futures position to hedge against the risk it had correctly anticipated or
close out the option position at a gain that will offset, to some extent,
market or currency exchange losses otherwise suffered by the Fund. If exchange
rates move in a way the Fund did not anticipate, however, the Fund will have
incurred the expense of the option without obtaining the expected benefit; any
such movement in exchange rates may also thereby reduce rather than enhance
the Fund's profits on its underlying securities transactions.

The Fund may also use European-style options. This means that the option is
only exercisable immediately prior to its expiration. This is in contrast to
American-style options, which are exercisable at any time prior to the
expiration date of the option.

Additional Risks of Options, Futures Contracts and Options on Futures
Contracts. Futures contracts and options thereon on securities and currencies
may be traded on foreign exchanges. Such transactions may not be regulated as
effectively as similar transactions in the U.S., may not involve a clearing
mechanism and related guarantees, and are subject to the risk of governmental
actions affecting trading in, or the prices of, foreign securities. The value
of such positions also could be adversely affected by (1) other complex
foreign political, legal and economic factors, (2) lesser availability than in
the U.S. of data on which to make trading decisions, (3) delays in the Fund's
ability to act upon economic events occurring in the foreign markets during
non-business hours in the U.S., (4) the imposition of different exercise and
settlement terms and procedures and margin requirements than in the U.S. and
(5) lesser trading volume.

Exchanges on which options, futures contracts and options on futures
contracts are traded may impose limits on the positions that the Fund may take
in certain circumstances.

Special Risk Considerations Relating to Futures Contracts and Options
Thereon. There are several risks in connection with the use of futures
contracts as a hedging device. Due to the imperfect correlation between the
price of futures contracts and movements in the currency or group of
currencies, the price of a futures contract may move more or less than the
price of the currencies being hedged. The use of these instruments will hedge
only the currency risks associated with investments in foreign securities, not
market risks. In the case of futures contracts on securities indexes, the
correlation between the price of the futures contract and the movements in the
index may not be perfect. Therefore, a correct forecast of currency rates,
market trends or international political trends by an investment adviser may
still not result in a successful hedging transaction.

The Fund's ability to establish and close out positions in futures contracts
and options on futures contracts will be subject to the development and
maintenance of liquid markets. Although the Fund generally will purchase or
sell only those futures contracts and options thereon for which there appears
to be a liquid market, there is no assurance that a liquid market on an
exchange will exist for any particular futures contract or option thereon at
any particular time. In the event no liquid market exists for a particular
futures contract or option thereon in which the Fund maintains a position, it
will not be possible to effect a closing transaction in that contract or to do
so at a satisfactory price and the Fund would have to either make or take
delivery under the futures contract or, in the case of a written option, wait
to sell the underlying securities until the option expires or is exercised or,
in the case of a purchased option, exercise the option. In the case of a
futures contract or an option on a futures contract which the Fund has written
and which the Fund is unable to close, the Fund would be required to maintain
margin deposits on the futures contract or option and to make variation margin
payments until the contract is closed.

Successful use of futures contracts and options thereon by the Fund is
subject to the ability of an investment adviser to predict correctly movements
in the direction of interest and foreign currency rates and the market
generally. If the investment adviser's expectations are not met, the Fund
would be in a worse position than if a hedging strategy had not been pursued.
For example, if the Fund has hedged against the possibility of an increase in
interest rates which would adversely affect the price of securities in its
portfolio and the price of such securities increases instead, the Fund will
lose part or all of the benefit of the increased value of its securities
because it will have offsetting losses in its futures positions. In addition,
in such situations, if the Fund has insufficient cash to meet daily variation
margin requirements, it may have to sell securities to meet the requirements.
These sales may, but will

B-9
<PAGE>

not necessarily, be at increased prices which reflect the rising market. The
Fund may have to sell securities at a time when it is disadvantageous to do
so.

The hours of trading of futures contracts may not conform to the hours
during which the Fund may trade the underlying securities. To the extent that
the futures markets close before the securities markets, significant price and
rate movements can take place in the securities markets that cannot be
reflected in the futures markets.

Limitations on the Purchase and Sale of Options on Stock Indexes and Futures
Contracts and Options on Futures Contracts. The Fund will engage in
transactions in futures contracts and options thereon only for bona fide
hedging, return enhancement and risk management purposes, in each case in
accordance with the rules and regulations of the CFTC, and not for
speculati.on.
The Fund will write put options on stock indexes and futures contracts on
foreign currencies only if they are covered by segregating with the Fund's
Custodian an amount of cash or other liquid assets equal to the aggregate
exercise price of the puts. In accordance with CFTC regulations, the Fund may
not purchase or sell futures contracts or options thereon if the initial
margin and premiums for options on futures would exceed 5% of the liquidation
value of the Fund's total assets after taking into account unrealized profits
and unrealized losses on such contracts; provided, however, that in the case
of an option that is in-the-money at the time of the purchase, the in-the-
money amount may be excluded in calculating the 5% limitation. The above
restriction does not apply to the purchase and sale of futures contracts and
options thereon for bona fide hedging purposes within the meaning of the CFTC
regulations. In instances involving the purchase of futures contracts or call
options thereon or the writing of put options thereon by the Fund, an amount
of cash and other liquid assets equal to the market value of the futures
contracts and options thereon (less any related margin deposits), will be
segregated with the Fund's Custodian to cover the position, or alternative
cover will be employed, thereby insuring that the use of such instruments is
unleveraged. The Fund does not intend to purchase options on securities
indexes if the aggregate premiums paid for such outstanding options would
exceed 10% of the Fund's total assets.

Except as described below, the Fund will write call options on indexes only
if on such date it holds a portfolio of stocks at least equal to the value of
the index times the multiplier times the number of contracts. When the Fund
writes a call option on a broadly-based stock market index, the Fund will
segregate or put into escrow with its Custodian, or pledge to a broker as
collateral for the option, cash or other liquid assets substantially
replicating the movement of the index, in the judgment of the Fund's
investment adviser, with a market value at the time the option is written of
not less than 100% of the current index value times the multiplier times the
number of contracts.

If the Fund has written an option on an industry or market segment index, it
will segregate with its Custodian, or pledge to a broker as collateral for the
option, at least ten "qualified securities," all of which are stocks of
issuers in such industry or market segment, with a market value at the time
the option is written of not less than 100% of the current index value times
the multiplier times the number of contracts. Such stocks will include stocks
which represent at least 50% of the weighting of the industry or market
segment index and will represent at least 50% of the Fund's holdings in that
industry or market segment. No individual security will represent more than
15% of the amount so segregated or pledged in the case of broadly-based stock
market index options or 25% of such amount in the case of industry or market
segment index options. If at the close of business on any day the market value
of such qualified securities so segregated or pledged falls below 100% of the
current index value times the multiplier times the number of contracts, the
Fund will so segregate or pledge an amount in cash or other liquid assets
equal in value to the difference. In addition, when the Fund writes a call on
an index which is in-the-money at the time the call is written, the Fund will
segregate with its Custodian or pledge to the broker as collateral cash or
other liquid assets equal in value to the amount by which the call is in-the-
money times the multiplier times the number of contracts. Any amount
segregated pursuant to the foregoing sentence may be applied to the Fund's
obligation to segregate additional amounts in the event that the market value
of the qualified securities falls below 100% of the current index value times
the multiplier times the number of contracts. A "qualified security" is an
equity security which is listed on a national securities exchange or listed on
NASDAQ against which the Fund has not written a stock call option and which
has not been hedged by the Fund by the sale of stock index futures. However,
if the Fund holds a call on the same index as the call written where the
exercise price of the call held is equal to or less than the exercise price of
the call written or greater than the exercise price of the call written if the
difference is segregated by the Fund in cash or other liquid assets with its
Custodian, it will not be subject to the requirements described in this
paragraph.

The Fund may engage in futures contracts and options on futures transactions
as a hedge against changes, resulting from market or political conditions, in
the value of the currencies to which the Fund is subject or to which the Fund
expects to be subject in connection with future purchases. The Fund may engage
in such transactions when they are economically appropriate for the reduction
of risks inherent in the ongoing management of the Fund. The Fund may write
options on futures contracts to realize through the receipt of premium income
a greater return than would be realized in the Fund's portfolio securities
alone.

B-10
<PAGE>

The Fund's purchase and sale of futures contracts and purchase and writing
of options on futures contracts will be for the purpose of protecting its
portfolio against anticipated future changes in foreign currency exchange
rates which might otherwise either adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities that the
Fund intends to purchase at a later date, and to enhance the Fund's return. As
an alternative to bona fide hedging as defined by the CFTC, the Fund may
comply with a different standard established by CFTC rules with respect to
futures contracts and options thereon purchased by the Fund incidental to the
Fund's activities in the securities markets, under which the value of the
assets underlying such positions will not exceed the sum of (1) cash or other
liquid assets segregated for this purpose, (2) cash proceeds on existing
investments due within thirty days and (3) accrued profits on the particular
futures contract or option thereon.

In addition, CFTC regulations may impose limitations on the Fund's ability
to engage in certain return enhancement and risk management strategies. There
are no limitations on the Fund's use of futures contracts and options on
futures contracts beyond the restrictions set forth above.

Although the Fund intends to purchase or sell futures and options on futures
only on exchanges where there appears to be an active market, there is no
guarantee that an active market will exist for any particular contract or at
any particular time. If there is not a liquid market at a particular time, it
may not be possible to close a futures position at such time, and, in the
event of adverse price movements, the Fund would continue to be required to
make daily cash payments of variation margin. However, when futures positions
are used to hedge portfolio securities, such securities will not be sold until
the futures positions can be liquidated. In such circumstances, an increase in
the price of securities, if any, may partially or completely offset losses on
the futures contracts.

Risks of Risk Management and Return Enhancement Strategies

Participation in the options or futures market and in currency exchange
transactions involves investment risks and transaction costs to which the Fund
would not be subject absent the use of these strategies. The Fund, and thus
its investors, may lose money through any unsuccessful use of these
strategies. If a Subadviser's predictions of movements in the direction of the
securities or foreign currency markets are inaccurate, the adverse
consequences to the Fund may leave the Fund in a worse position than if such
strategies were not used. Risks inherent in the use of these strategies
include: (1) dependence on a Subadviser's ability to predict correctly
movements in the direction of securities prices and currency markets; (2)
imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of the securities or currencies
being hedged; (3) the fact that skills needed to use these strategies are
different from those needed to select portfolio securities; (4) the possible
absence of a liquid secondary market for any particular instrument at any
time; (5) the risk that the counterparty may be unable to complete the
transaction; and (6) the possible inability of the Fund to purchase or sell a
portfolio security at a time that otherwise would be favorable for it to do
so, or the possible need for the Fund to sell a portfolio security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to
segregate assets in connection with hedging transactions.

Position Limits. Transactions by the Fund in futures contracts and options
will be subject to limitations, if any, established by each of the exchanges,
boards of trade or other trading facilities (including NASDAQ) governing the
maximum number of options in each class which may be written or purchased by a
single investor or group of investors acting in concert, regardless of whether
the options are written on the same or different exchanges, boards of trade or
other trading facilities or are held or written in one or more accounts or
through one or more brokers. Thus, the number of futures contracts and options
which the Fund may write or purchase may be affected by the futures contracts
and options written or purchased by other investment advisory clients of an
investment adviser. An exchange, board of trade or other trading facility may
order the liquidations of positions found to be in excess of these limits, and
it may impose certain other sanctions.

Repurchase Agreements

The Fund may enter into repurchase agreements, whereby the seller of the
security agrees to repurchase that security from the Fund at a mutually
agreed-upon time and price. The repurchase date is usually quite short,
possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the purchase price, reflecting an
agreed-upon rate of return effective for the period of time the Fund's money
is invested in the repurchase agreement. The Fund's repurchase agreements will
at all times be fully collateralized in an amount at least equal to the resale
price. The instruments held as collateral are valued daily, and if the value
of the instruments declines, the Fund will require additional collateral. If
the seller defaults and the value of the collateral securing the repurchase
agreement declines, the Fund may incur a loss.

The Fund will enter into repurchase transactions only with parties meeting
creditworthiness standards approved by the applicable investment adviser. In
the event of a default or bankruptcy by a seller, the Fund will promptly seek
to liquidate the collateral.

B-11
<PAGE>

[The Fund participates in a joint repurchase account with other investment
companies managed by Prudential Investments Fund Management LLC (PIFM)
pursuant to an order of the Securities and Exchange Commission (the
Commission). On a daily basis, any uninvested cash balances of the Fund may be
aggregated with those of such investment companies and invested in one or more
repurchase agreements. Each fund participates in the income earned or accrued
in the joint account based on the percentage of its investment. ]

Lending of Securities

Consistent with applicable regulatory requirements, the Fund may lend its
portfolio securities to brokers, dealers and financial institutions, provided
that outstanding loans do not exceed in the aggregate 33 1/3% of the value of
the Fund's total assets and provided that such loans are callable at any time
by the Fund and are at all times secured by cash or other liquid assets or an
irrevocable letter of credit in favor of the Fund equal to at least 100% of
the market value, determined daily, of the loaned securities. The advantage of
such loans is that the Fund continues to receive payments in lieu of the
interest and dividends of the loaned securities, while at the same time
earning interest either directly from the borrower or on the collateral which
will be invested in short-term obligations.

A loan may be terminated by the borrower or by the Fund at any time. If the
borrower fails to maintain the requisite amount of collateral, the loan
automatically terminates and the Fund could use the collateral to replace the
securities while holding the borrower liable for any excess of replacement
cost over collateral. As with any extensions of credit, there are risks of
delay in recovery and in some cases loss of rights in the collateral should
the borrower of the securities fail financially. However, these loans of
portfolio securities will only be made to firms determined to be creditworthy
pursuant to procedures approved by the Board of Trustees of the Company. On
termination of the loan, the borrower is required to return the securities to
the Fund, and any gain or loss in the market price during the loan would inure
to the Fund.

Since voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, to permit the exercise of such rights if the
matters involved would have a material effect on the Fund's investment in the
securities which are the subject of the loan. The Fund will pay reasonable
finders', administrative and custodial fees in connection with a loan of its
securities or may share the interest earned on collateral with the borrower.

Borrowing

The Fund may borrow up to 33 1/3 the value of its total assets (calculated
when the loan is made) for temporary, extraordinary or emergency purposes or
for the clearance of transactions. The Fund may pledge up to 20% of its total
assets to secure these borrowings. If the Fund's asset coverage for borrowings
falls below 300%, the Fund will take prompt action (within 3 days) to reduce
its borrowings. If the 300% asset coverage should decline as a result of
market fluctuations or other reasons, the Fund may be required to sell
portfolio securities to reduce the debt and restore the 300% asset coverage,
even though it may be disadvantageous from an investment standpoint to sell
securities at that time. The Fund will not purchase portfolio securities when
borrowings exceed 5% of the value of its total assets.

Illiquid Securities

The Fund may hold up to 15% of its net assets in illiquid securities. If the
Fund were to exceed this limit, the investment advisers would take prompt
action to reduce the Fund's holdings in illiquid securities to no more than
15% of its net assets as required by applicable law. Illiquid securities
include repurchase agreements which have a maturity of longer than seven days,
securities with legal or contractual restrictions on resale (restricted
securities) and securities that are not readily marketable in markets within
or outside of the United States. Repurchase agreements subject to demand are
deemed to have a maturity equal to the applicable notice period.

Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (Securities Act),
securities which are otherwise not readily marketable and repurchase
agreements having a maturity of longer than seven days. Securities which have
not been registered under the Securities Act are referred to as private
placements or restricted securities and are purchased directly from the issuer
or in the secondary market. Mutual funds do not typically hold a significant
amount of these restricted or other illiquid securities because of the
potential for delays on resale and uncertainty in valuation. Limitations on
resale may have an adverse effect on the marketability of portfolio securities
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. A mutual fund might also
have to register such restricted securities in order to dispose of them
resulting in additional expense and delay. Adverse market conditions could
impede such a public offering of securities.

B-12
<PAGE>

In recent years, however, a large institutional market has developed for
certain securities that are not registered under the Securities Act including
repurchase agreements, commercial paper, foreign securities, municipal
securities, convertible securities and corporate bonds and notes.
Institutional investors depend on an efficient institutional market in which
the unregistered security can be readily resold or on an issuer's ability to
honor a demand for repayment. The fact that there are contractual or legal
restrictions on resale to the general public or to certain institutions may
not be indicative of the liquidity of such investments.

Rule 144A under the Securities Act allows for a broader institutional
trading market for securities otherwise subject to restriction on resale to
the general public. Rule 144A establishes a "safe harbor" from the
registration requirements of the Securities Act for resales of certain
securities to qualified institutional buyers. The investment adviser
anticipates that the market for certain restricted securities such as
institutional commercial paper and foreign securities will expand further as a
result of this regulation and the development of automated systems for the
trading, clearance and settlement of unregistered securities of domestic and
foreign issuers, such as the PORTAL System sponsored by the National
Association of Securities Dealers, Inc. (NASD).

Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act and privately placed commercial paper for which there is a
readily available market are treated as liquid only when deemed liquid under
procedures established by the Trustees. The Fund's investment in Rule 144A
securities could have the effect of increasing illiquidity to the extent that
qualified institutional buyers become, for a limited time, uninterested in
purchasing Rule 144A securities. The investment advisers will monitor the
liquidity of such restricted securities subject to the supervision of the
Board of Trustees. In reaching liquidity decisions, an investment adviser will
consider, among others, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security and (4) the nature of the
security and the nature of the marketplace trades (for example, the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer). In addition, in order for commercial paper that is
issued in reliance on Section 4(2) of the Securities Act to be considered
liquid, (a) it must be rated in one of the two highest rating categories by at
least two nationally recognized statistical rating organizations (NRSRO), or
if only one NRSRO rates the securities, by that NRSRO, or, if unrated, be of
comparable quality in the view of an investment adviser; and (b) it must not
be "traded flat" (that is, without accrued interest) or in default as to
principal or interest.

Real Estate Investment Trusts

The Fund may invest in securities of real estate investment trusts or REITs.
Unlike corporations, REITs do not have to pay income taxes if they meet
certain Internal Revenue Code requirements. To qualify, a REIT must distribute
at least 95% of its taxable income to its shareholders and receive at least
75% of that income from rents, mortgages and sales of property. REITs offer
investors greater liquidity and diversification than direct ownership of a
handful of properties, as well as greater income potential than an investment
in common stock. Like any investment in real estate, though, a REIT's
performance depends on several factors, such as its ability to find tenants
for its properties, to renew leases and to finance property purchases and
renovations.

Securities of Other Investment Companies

The Fund is permitted to invest up to 10% of its total assets in securities
of other non-affiliated investment companies. The Fund does not intend to
invest in such securities during the coming year. If the Fund does invest in
securities of other investment companies, shareholders of the Fund may be
subject to duplicate management and advisory fees. See "Investment
Restrictions."

Segregated Assets

The Fund segregates with its Custodian, State Street Bank and Trust Company,
cash, U.S. Government securities, equity securities (including foreign
securities), debt securities or other liquid, unencumbered assets equal in
value to its obligations in respect of potentially leveraged transactions.
These include forward contracts, when-issued and delayed delivery securities,
futures contracts, written options and options on futures contracts (unless
otherwise covered). If collateralized or otherwise covered, in accordance with
Commission guidelines, these will not be deemed to be senior securities. The
assets segregated will be marked-to-market daily.

When-Issued and Delayed Delivery Securities

The Fund may purchase or sell securities on when-issued or delayed delivery
basis. When-issued or delayed delivery transactions arise when securities are
purchased or sold by the Fund with payment and delivery taking place as much
as a month or more in the future in order to secure what is considered to be
an advantageous price and yield to the Fund at the time of entering into the
transaction. The Fund's Custodian will segregate cash or other liquid assets
having a value equal to or greater than the Fund's purchase commitments. The
securities so purchased are subject to market fluctuation and no interest
accrues to the

B-13
<PAGE>

purchaser during the period between purchase and settlement. At the time of
delivery of the securities the value may be more or less than the purchase
price and an increase in the percentage of the Fund's assets committed to the
purchase of securities on a when-issued or delayed delivery basis may increase
the volatility of the Fund's net asset value.

(d) Temporary Defensive Strategy and Short-Term Investments

When adverse market or economic conditions dictate a defensive strategy, the
Fund may temporarily invest without limit in high quality money market
instruments, including commercial paper of corporations, foreign government
securities, certificates of deposit, bankers' acceptances and other
obligations of domestic and foreign banks, non-convertible debt securities
(corporate and government), obligations issued or guaranteed by the U.S.
Government, its agencies or its instrumentalities, repurchase agreements and
cash (foreign currencies or U.S. dollars). Money market instruments typically
have a maturity of one year or less as measured from the date of purchase.

The Fund may also temporarily hold cash or invest in high quality foreign or
domestic money market instruments pending investment of proceeds from new
sales of Fund shares or to meet ordinary daily cash needs subject to the 65%
policy.

(e) Portfolio Turnover

As a result of the investment policies described above, the Fund may engage
in a substantial number of portfolio transactions. The portfolio turnover rate
is generally the percentage computed by dividing the lesser of portfolio
purchases or sales (excluding all securities, including options, whose
maturities or expiration date at acquisition were one year or less) by the
monthly average value of the portfolio. High portfolio turnover (100% or more)
involves correspondingly greater brokerage commissions and other transaction
costs, which are borne directly by the Fund. In addition, high portfolio
turnover may also mean that a proportionately greater amount of distributions
to shareholders will be taxed as ordinary income rather than long-term capital
gains compared to investment companies with lower portfolio turnover. See
"Brokerage Allocation and Other Practices" and "Taxes, Dividends and
Distributions."

INVESTMENT RESTRICTIONS

The following restrictions are fundamental policies. Fundamental policies
are those which cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities. A "majority of the
Fund's outstanding voting securities," when used in this Statement of
Additional Information, means with respect to the Fund, the lesser of (1) 67%
of the shares represented at a meeting at which more than 50% of the
outstanding voting shares are present in person or represented by proxy or (2)
more than 50% of the outstanding voting shares.

The Fund may not:

1. Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions); provided that
the deposit or payment by the Fund of initial or maintenance margin in
connection with futures or options is not considered the purchase of a
security on margin.

2. Make short sales of securities or maintain a short position if, when
added together, more than 25% of the value of the Fund's net assets would be
(i) deposited as collateral for the obligation to replace securities borrowed
to effect short sales and (ii) allocated to segregated accounts in connection
with short sales. Short sales "against-the-box" are not subject to this
limitation.

3. Issue senior securities, borrow money or pledge its assets, except that
the Fund may borrow up to 33 1/3% of the value of its total assets (calculated
when the loan is made) for temporary, extraordinary or emergency purposes or
for the clearance of transactions. The Fund may pledge up to 20% of the value
of its total assets to secure such borrowings. For purposes of this
restriction, the purchase or sale of securities on a when-issued or delayed
delivery basis, forward foreign currency exchange contracts and collateral
arrangements relating thereto, and collateral arrangements with respect to
futures contracts and options thereon and with respect to the writing of
options and obligations of the Fund to Trustees pursuant to deferred
compensation arrangements are not deemed to be a pledge of assets subject to
this restriction.

4. Purchase any security (other than obligations of the U.S. Government, its
agencies or instrumentalities) if as a result 25% or more of the Fund's total
assets (determined at the time of the investment) would be invested in a
single industry.

B-14
<PAGE>

5. Buy or sell real estate or interests in real estate, except that the Fund
may purchase and sell securities which are secured by real estate, securities
of companies which invest or deal in real estate and publicly traded
securities of real estate investment trusts.

6. Buy or sell commodities or commodity contracts, except that the Fund may
purchase and sell financial futures contracts and options thereon, and forward
foreign currency exchange contracts.

7. Act as underwriter except to the extent that, in connection with the
disposition of portfolio securities, it may be deemed to be an underwriter
under certain federal securities laws.

8. Make investments for the purpose of exercising control or management.

9. Invest in securities of other non-affiliated investment companies, except
by purchases in the open market involving only customary brokerage commissions
and as a result of which the Fund will not hold more than 3% of the
outstanding voting securities of any one investment company, will not have
invested more than 5% of its total assets in any one investment company and
will not have invested more than 10% of its total assets (determined at the
time of investment) in such securities of one or more investment companies, or
except as part of a merger, consolidation or other acquisition.

10. Make loans, except through (a) repurchase agreements and (b) loans of
portfolio securities limited to 33 1/3 of the Fund's total assets.

11. Purchase more than 10% of all outstanding voting securities of any one
issuer.

Whenever any fundamental investment policy or investment restriction states
a maximum percentage of the Fund's assets, it is intended that if the
percentage limitation is met at the time the investment is made, a later
change in percentage resulting from changing total or net asset values will
not be considered a violation of such policy. However, in the event that the
Fund's asset coverage for borrowings falls below 300%, the Fund will take
prompt action to reduce its borrowings, as required by applicable law.

MANAGEMENT OF THE COMPANY

<TABLE>
<CAPTION>
Position Principal Occupations
Name and Address** (Age) with Fund During Past Five Years
------------------------ --------- ----------------------
<C> <C> <S>
Eugene C. Dorsey (72) Trustee Retired President, Chief Executive Officer and Trustee
of the Gannett Foundation (now Freedom Forum); former
Publisher of four Gannett Newspapers and Vice
President of Gannett Co., Inc.; past Chairman,
Independent Sector, Washington, D.C. (largest national
coalition of philanthropic organizations); former
Chairman of the American Council for the Arts;
Director of the Advisory Board of Chase Manhattan Bank
of Rochester, First Financial Fund, Inc., The High
Yield Plus Fund, Inc. and The High Yield Income Fund,
Inc.; Trustee of the Target Portfolio Trust, Target
Funds and Prudential Diversified Funds.
*Robert F. Gunia (52) Trustee Chief Administrative Officer (since June 1999) of
Prudential Investments; Vice President (since
September 1997) of The Prudential Insurance Company of
America (Prudential); Executive Vice President and
Treasurer (since December 1996) of Prudential
Investments Fund Management LLC (PIFM); Senior Vice
President (since March 1987) of Prudential Securities
Incorporated (Prudential Securities); formerly Chief
Administrative Officer (July 1990-September 1996),
Director (January 1989-September 1996) and Executive
Vice President, Treasurer and Chief Financial Officer
(June 1987-September 1996) of Prudential Mutual Fund
Management, Inc.; Vice President and Director of The
Asia Pacific Fund, Inc. (since May 1989); Director of
The High Yield Income Fund, Inc.; Director or Trustee
of 45 funds within the Prudential Mutual Funds.
</TABLE>

B-15
<PAGE>

<TABLE>
<CAPTION>
Position Principal Occupations
Name and Address** (Age) with Fund During Past Five Years
------------------------ --------- ----------------------
<C> <C> <S>
Robert E. LaBlanc (65) Trustee President of Robert E. LaBlanc Associates, Inc.
(telecommunications) since 1981; formerly General
Partner at Salomon Brothers; formerly Vice Chairman of
Continental Telecom; Director of Salient 3
Communications; Storage Technology Corporation, Titan
Corporation, TIE/communications, Inc., The Tribune
Company, Chartered Semiconductor Manufacturing, Ltd.,
Prudential Europe Growth Fund, Inc., Prudential Global
Genesis Fund, Inc., Prudential Institutional Liquidity
Portfolio, Inc., Prudential MoneyMart Assets, Inc.,
Prudential Natural Resources Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Special Money
Market Fund, Inc., Prudential Tax-Free Money Fund,
Inc. and Prudential World Fund, Inc.; Trustee of Cash
Accumulation Trust, Command Government Fund, Command
Money Fund, Command Tax-Free Fund, Prudential
Developing Markets Fund, The Target Portfolio Trust,
Prudential Diversified Funds, Target Funds and
Manhattan College.
Douglas H. McCorkindale Trustee President (since September 1997) and Vice Chairman
(60) (since March 1984) of Gannett Co., Inc.; Director of
Continental Airlines, Inc., Gannett Co., Inc.,
Frontier Corporation, First Financial Fund, Inc. and
The High Yield Plus Fund, Inc.; Trustee of The Target
Portfolio Trust, Target Funds and Prudential
Diversified Funds.
Thomas T. Mooney (58) Trustee President of the Greater Rochester Metro Chamber of
55 St. Paul Street Commerce; former Rochester City Manager; Trustee of
Rochester, NY 14604 Center for Governmental Research, Inc.; Director of
Blue Cross of Rochester, The Business Council of New
York State, Executive Service Corps of Rochester,
Monroe County Water Authority, Rochester Jobs, Inc.,
Northeast-Midwest Institute, Monroe County Industrial
Development Corporation, and The High Yield Income
Fund, Inc.; President, Director and Treasurer of First
Financial Fund, Inc. and The High Yield Plus Fund,
Inc.; Trustee of The Target Portfolio Trust, Target
Funds and Prudential Diversified Funds.
*David R. Odenath, Jr. Trustee Officer in Charge, President, Chief Executive Officer
(42) and Chief Operating Officer (since June 1999), PIFM;
Senior Vice President (since June 1999), Prudential;
Senior Vice President (August 1993-May 1999),
PaineWebber Group, Inc.; Director or Trustee of 44
funds within the Prudential mutual funds.
Stephen Stoneburn (56) Trustee President and Chief Executive Officer, Quadrant Media
Corp. (publishing) (since June 1996); formerly Senior
Vice President and Managing Director, Cowles Business
Media (January 1993-1995); prior thereto, Senior Vice
President (January 1991-1992) and Publishing Vice
President (May 1989-December 1990) of Gralla
Publications (a division of United Newspapers, U.K.);
formerly Senior Vice President of Fairchild
Publications, Inc.; Director of Prudential Europe
Growth Fund, Inc., Prudential Global Genesis Fund,
Inc., Prudential Institutional Liquidity Portfolio,
Inc., Prudential MoneyMart Assets, Inc., Prudential
Natural Resources Fund, Inc., Prudential Pacific
Growth Fund, Inc., Prudential Special Money Market
Fund, Inc., Prudential Tax-Free Money Fund, Inc. and
Prudential World Fund, Inc.; Trustee of Cash
Accumulation Trust, Command Government Fund, Command
Money Fund, Command Tax-Free Fund, Prudential
Developing Markets Fund, The Target Portfolio Trust,
Prudential Diversified Funds and Target Funds.
</TABLE>

B-16
<PAGE>

<TABLE>
<CAPTION>
Name and Address** (Age) Position Principal Occupations
- ------------------------ with Fund During Past Five Years
--------- ----------------------
<S> <C> <C>
*John R. Strangfeld, Jr. Trustee and Chief Executive Officer, Chairman, President and
(45) President Director of The Prudential Investment Corporation
(since January 1990); Executive Vice President of
Prudential Global Asset Management Group of Prudential
(since February 1998); Chairman of Pricoa Capital
Group (since August 1989); Chief Executive Officer of
Private Asset Management Group of Prudential (November
1994-December 1998); President and Director or Trustee
of 45 funds within the Prudential mutual funds.
Clay T. Whitehead (61) Trustee President of National Exchange Inc. (new business
development firm) (since May 1983); Director or
Trustee of 33 funds within the Prudential mutual
funds.
David F. Connor (36) Secretary Assistant General Counsel (since March 1998) of
Prudential Investment Fund Management LLC (PIFM);
Associate Attorney, Drinker Biddle & Reath LLP prior
thereto.
Grace C. Torres (40) Treasurer First Vice President (since December 1996) of PIFM;
and Principal First Vice President (since March 1994) of Prudential
Financial and Securities; formerly First Vice President (March 1994-
Accounting September 1996) of Prudential Mutual Fund Management,
Officer Inc.
Stephen M. Ungerman (46) Assistant Tax Director (since March 1996) of Prudential
Treasurer Investments and the Private Asset Group of The
Prudential Insurance Company of America (Prudential);
formerly First Vice President (February 1993-September
1996) of Prudential Mutual Fund Management, Inc.
(February 1993-September 1996) and Senior Tax Manager
(1981-January 1993) of Price Waterhouse LLP.
</TABLE>
- ----------

* "Interested" Trustee, as defined in the Investment Company Act, by reason of
affiliation with the Manager, Sub-Manager, a Subadviser or the Distributor.
** Unless otherwise indicated, the address of the Trustees and officers is c/o
Prudential Investments Fund Management LLC, Gateway Center Three, 100
Mulberry Street, Newark, New Jersey 07102-4077.

The Company has Trustees who, in addition to overseeing the actions of the
Fund's Manager, Sub-Manager, Subadvisers and Distributor, decide upon matters
of general policy. The Trustees also review the actions of the Fund's officers
who conduct and supervise the daily business operations of the Fund.

The Trustees have adopted a retirement policy which calls for the retirement
of Trustees on December 31 of the year in which they reach the age of 75.

Pursuant to the terms of the Management Agreement with the Fund, the Manager
pays all compensation of officers and employees of the Company as well as the
fees and expenses of all Trustees of the Company who are affiliated persons of
the Manager. The Fund currently pays each of its Trustees who is not an
affiliated person of PIFM or the investment advisers annual compensation of
$ in addition to certain out-of-pocket expenses. The amount of annual
compensation paid to each Trustee may change as a result of the introduction of
additional funds on the boards of which the Trustee will be asked to serve, as
well as service by such Trustee on one or more committees.

Trustees may receive their Trustees' fees pursuant to a deferred fee
agreement with the Fund. Under the terms of the agreement, the Company accrues
daily the amount of Trustees' fees in installments which accrue interest at a
rate equivalent to the prevailing rate applicable to 90-day U.S. Treasury bills
at the beginning of each calendar quarter or, pursuant to a Commission
exemptive order, at the daily rate of return of the Fund (the Fund rate).
Payment of the interest so accrued is also deferred and accruals become payable
at the option of the Trustee. The Company's obligation to make payments of
deferred Trustees' fees, together with interest thereon, is a general
obligation of the Company.

B-17
<PAGE>

The following table sets forth the aggregate compensation paid for the
calendar year ended December 31, 1999 to the Trustees who are not affiliated
with the Manager for service on the boards of all investment companies managed
by PIFM (Fund Complex).

Compensation Table

<TABLE>
<CAPTION>
Total 1999
Compensation
From Fund
Complex Paid
Name of Trustee To Trustees
- --------------- ------------
<S> <C>
Eugene C. Dorsey*
Robert F. Gunia+
Robert E. LaBlanc
Douglas H. McCorkindale*
Thomas T. Mooney*
David R. Odenath, Jr.+
Stephen Stoneburn
John R. Strangfeld
Clay, T. Whitehead
</TABLE>
- ---------
* Indicates number of funds/portfolios in Fund Complex to which aggregate
compensation relates.
** Total compensation from all of the funds in the Fund Complex for the
calendar year ended December 31, 1999, includes amounts deferred at the
election of Trustees under the funds' deferred compensation plans.
Including accrued interest, total compensation amounted to for
, respectively.
+ Interested Trustees do not receive compensation from the Company or any fund
in the Fund Complex.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

Trustees of the Company are eligible to purchase Class Z shares of the Fund,
which are sold without either an initial sales charge or contingent deferred
sales charge to a limited group of investors.

As of the date of this Statement of Additional Information, owned all
of the shares of the Fund and controlled the Fund.

INVESTMENT ADVISORY AND OTHER SERVICES

(a) Manager, Sub-Manager and Investment Advisers

The manager of the Fund is Prudential Investments Fund Management LLC (PIFM
or the Manager), Gateway Center Three, 100 Mulberry Street, Newark, New Jersey
07102-4077. PIFM serves as manager to all of the other investment companies
that, together with the Funds, comprise the Prudential Mutual Funds. See "How
the Fund is Managed--Manager" in the Prospectus of the Fund. As of 2000,
PIFM managed and/or administered open-end and closed-end management investment
companies with assets of approximately $ billion.

PIFM is a subsidiary of Prudential Securities and The Prudential Insurance
Company of America (Prudential). Prudential Mutual Fund Services LLC (PMFS or
the Transfer Agent), a wholly-owned subsidiary of PIFM, serves as the transfer
agent for the Fund.

Pursuant to the Management Agreement with the Fund (the Management
Agreement), PIFM, subject to the supervision of the Fund's Board of Trustees
and in conformity with the stated policies of the Fund, manages both the
investment operations of the Fund and the composition of the Fund's portfolio,
including the purchase, retention, disposition and loan of securities and
other assets. In connection therewith, PIFM is obligated to keep certain books
and records of the Fund. PIFM also administers the Fund's business affairs
and, in connection therewith, furnishes the Fund with office facilities,
together with those ordinary clerical and bookkeeping services which are not
being furnished by State Street Bank and Trust Company, the Fund's custodian
(the Custodian), and PMFS, the Fund's transfer and dividend disbursing agent.
The management services of PIFM for the Fund are not exclusive under the terms
of the Management Agreement and PIFM is free to, and does, render management
services to others.

For its services, PIFM receives, pursuant to the Management Agreement, a fee
at an annual rate of .90 of 1% of the Fund's average daily net assets up to
and including $1 billion and .85 of 1% of average daily net assets in excess
of $1 billion. The fee is computed daily and payable monthly.

B-18
<PAGE>

In connection with its management of the business affairs of the Fund, PIFM
bears the following expenses:

(a) the salaries and expenses of all personnel of the Fund and the Manager,
except the fees and expenses of Trustees who are not affiliated persons of PIFM
or the Fund's investment advisers;

(b) all expenses incurred by PIFM or by the Fund in connection with managing
the ordinary course of the Fund's business, other than those assumed by the
Fund as described below; and

(c) the costs and expenses payable to The Prudential Investment Corporation,
doing business as Prudential Investments (PI or the Sub-Manager), Alliance
Capital Management (Alliance) and Jennison Associates LLC (Jennison, and
collectively with Alliance, the investment advisers or the Subadvisers)
pursuant to the sub-management between PIFM and PI and the subadvisory
agreements between PIFM and Alliance or Jennison, respectively (the Subadvisory
Agreements).

Under the terms of the Management Agreement, the Fund is responsible for the
payment of the following expenses: (a) the fees payable to the Manager, (b) the
fees and expenses of Trustees who are not affiliated persons of the Manager or
the Fund's investment advisers, (c) the fees and certain expenses of the
Custodian and Transfer Agent, including the cost of providing records to the
Manager in connection with its obligation of maintaining required records of
the Fund and of pricing the Fund's shares, (d) the charges and expenses of
legal counsel and independent accountants for the Fund, (e) brokerage
commissions and any issue or transfer taxes chargeable to the Fund in
connection with its securities transactions, (f) all taxes and corporate fees
payable by the Fund to governmental agencies, (g) the fees of any trade
associations of which the Fund may be a member, (h) the cost of share
certificates representing shares of the Fund, (i) the cost of fidelity and
liability insurance, (j) certain organization expenses of the Fund and the fees
and expenses involved in registering and maintaining registration of the Fund
and of its shares with the Commission, including the preparation and printing
of the Fund's registration statements and prospectuses for such purposes, and
paying the fees and expenses of notice filings made in accordance with state
securities laws, (k) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing reports, proxy statements and prospectuses to
shareholders in the amount necessary for distribution to the shareholders, (l)
litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund's business and (m) distribution
fees.

The Management Agreement provides that PIFM will not be liable for any error
of judgment or for any loss suffered by the Fund in connection with the matters
to which the Management Agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of duty. The
Management Agreement provides that it will terminate automatically if assigned,
and that it may be terminated without penalty by either party upon not more
than 60 days' nor less than 30 days' written notice. The Management Agreement
will continue in effect for a period of more than two years from the date of
execution only so long as such continuance is specifically approved at least
annually in conformity with the Investment Company Act.

PIFM has entered into a Sub-Management Agreement with PI and a Subadvisory
Agreement with each Subadviser. The Sub-Management Agreement provides that PI
shall provide Jennison certain research services and will assist with the
maintenance of books and records as Jennison may request from time to time. For
its services, PI is compensated by PIFM at an annual rate of .60 of 1% of the
average daily net assets for the portion of such assets which Jennison manages
up to and including $1 billion and . of 1% of such average daily net assets
in excess of $1 billion.

The Subadvisory Agreements provide that the Subadvisers will furnish
investment advisory services to approximately 50% of the Fund's portfolio in
connection with the management of the Fund. In connection therewith, Alliance
and Jennison are obligated to keep certain books and records of the Fund. Under
the Subadvisory Agreements, the Subadvisers, subject to the supervision of
PIFM, are responsible for managing the assets of the Fund in accordance with
its investment objective, investment program and policies. The Subadvisers
determine what securities and other instruments are purchased and sold for the
Fund and are responsible for obtaining and evaluating financial data relevant
to the Fund. PIFM continues to have responsibility for all investment advisory
services pursuant to the Management Agreement. Under the Subadvisory
Agreements, Alliance is compensated by PIFM for its services at an annual rate
of .60 of 1% of the average daily net assets for the portion of such assets
which Alliance manages up to and including $1 billion and . of 1% of such
average daily net assets in excess of $1 billion, and Jennison is compensated
by PI, as Sub-Manager, for its services at an annual rate
of .

The Sub-Management Agreement and each Subadvisory Agreement provide that each
will terminate in the event of its assignment (as defined in the Investment
Company Act) or upon the termination of the Management Agreement. The Sub-
Management Agreement and each Subadvisory Agreement may be terminated by the
Company, PIFM, PI or the appliable Subadviser upon not more than 60 days', nor
less than 30 days', written notice. The Sub-Management Agreement and each
Subadvisory

B-19
<PAGE>

Agreement provides that each will continue in effect for a period of more than
two years from its execution only so long as such continuance is specifically
approved at least annually in accordance with the requirements of the
Investment Company Act.

(b) Principal Underwriter, Distributor and Rule 12b-1 Plans

Prudential Investment Management Services LLC (PIMS or the Distributor),
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, acts
as the distributor of the shares of the Fund. PIMS is a subsidiary of
Prudential.

Pursuant to separate Distribution and Service Plans (the Class A Plan, the
Class B Plan and the Class C Plan, collectively, the Plans) adopted by the
company on behalf of the Fund under Rule 12b-1 under the Investment Company Act
and a distribution agreement (the Distribution Agreement), the Distributor
incurs the expenses of distributing the Fund's Class A, Class B and Class C
shares, respectively. The Distributor also incurs the expenses of distributing
the Class Z shares under the Distribution Agreement with the Fund, none of
which are reimbursed by or paid for by the Fund.

The expenses incurred under the Plans include commissions and account
servicing fees paid to, or on account of, brokers or financial institutions
which have entered into agreements with the Distributor, advertising expenses,
the cost of printing and mailing prospectuses to potential investors and
indirect and overhead costs of the Distributor associated with the sale of Fund
shares, including lease, utility, communications and sales promotion expenses.

Under the Plans, the Fund is obligated to pay distribution and/or service
fees to the Distributor as compensation for its distribution and service
activities, not as reimbursement for specific expenses incurred. If the
Distributor's expenses exceed its distribution and service fees, the Fund will
not be obligated to pay any additional expenses. If the Distributor's expenses
are less than such distribution and service fees, it will retain its full fees
and realize a profit.

The distribution and/or service fees may also be used by the Distributor to
compensate on a continuing basis brokers in consideration for the distribution,
marketing, administrative and other services and activities provided by brokers
with respect to the promotion of the sale of the Fund's shares and the
maintenance of related shareholder accounts.

Class A Plan. Under the Class A Plan, the Fund may pay the Distributor for
its distribution-related expenses with respect to Class A shares at an annual
rate of up to .30 of 1% of the average daily net assets of the Class A shares.
The Class A Plan provides that (1) up to .25 of 1% of the average daily net
assets of the Class A shares may be used to pay for personal service and/or the
maintenance of shareholder accounts (service fee) and (2) total distribution
fees (including the service fee of .25 of 1%) may not exceed .30 of 1% of the
average daily net assets of the Class A shares. The Distributor has
contractually agreed to limit its distribution-related fees payable under the
Class A Plan to .25 of 1% of the average daily net assets of the Class A shares
for the fiscal year ending ,2001.

Class B and Class C Plans. Under the Class B and Class C Plans, the Fund pays
the Distributor for its distribution-related expenses with respect to Class B
and Class C shares at an annual rate of 1% of the average daily net assets of
each of the Class B and Class C shares. The Class B and Class C Plans provide
for the payment to the Distributor of (1) an asset-based sales charge of .75 of
1% of the average daily net assets of each of the Class B and Class C shares,
respectively, and (2) a service fee of .25 of 1% of the average daily net
assets of each of the Class B and Class C shares. The service fee is used to
pay for personal service and/or the maintenance of shareholder accounts. The
Distributor also receives contingent deferred sales charges from certain
redeeming shareholders and, with respect to Class C shares, an initial sales
charge.

The Distributor (and Prudential Securities as its predecessor) also receives
the proceeds of contingent deferred sales charges paid by investors upon
certain redemptions of Class B shares and an initial sales charge and the
proceeds of contingent deferred sales charges paid by investors upon certain
redemptions of Class C shares.

Distribution expenses attributable to the sale of Class A, Class B or Class C
shares of the Fund will be allocated to each such class based upon the ratio of
sales of each such class to the sales of Class A, Class B and Class C shares of
the Fund other than expenses allocable to a particular class. The distribution
fee and sales charge of one class will not be used to subsidize the sale of
another class.

The Class A, Class B and Class C Plans continue in effect from year to year,
provided that each such continuance is approved at least annually by a vote of
the Board of Trustees, including a majority vote of the Trustees who are not
interested persons of the Company and who have no direct or indirect financial
interest in the Class A, Class B and Class C Plan or in any agreement related
to the Plans (the Rule 12b-1 Trustees), cast in person at a meeting called for
the purpose of voting on such continuance. A Plan may be terminated at any
time, without penalty, by the vote of a majority of the Rule 12b-1 Trustees or
by the vote of the holders

B-20
<PAGE>

of a majority of the outstanding shares of the applicable class of the Fund on
not more than 60 days', nor less than 30 days', written notice to any other
party to the Plan. The Plans may not be amended to increase materially the
amounts to be spent for the services described therein without approval by the
shareholders of the applicable class, and all material amendments are required
to be approved by the Board of Trustees in the manner described above. Each
Plan will automatically terminate in the event of its assignment. The Fund will
not be obligated to pay expenses incurred under any Plan if it is terminated or
not continued.

Pursuant to each Plan, the Board of Trustees will review at least quarterly a
written report of the distribution expenses incurred on behalf of each class of
shares of the Fund by the Distributor. The report will include an itemization
of the distribution expenses and the purposes of such expenditures. In
addition, as long as the Plans remain in effect, the selection and nomination
of Rule 12b-1 Trustees shall be committed to the Rule 12b-1 Trustees.

Pursuant to the Distribution Agreement, the Fund has agreed to indemnify the
Distributor to the extent permitted by applicable law against certain
liabilities under the federal securities laws.

In addition to distribution and service fees paid by the Fund under the Class
A, Class B and Class C Plans, the Manager (or one of its affiliates) may make
payments to dealers (including Prudential Securities) and other persons who
distribute shares of the Fund (including Class Z shares). Such payments may be
calculated by reference to the net asset value of shares sold by such persons
or otherwise.

Fee Waivers/Subsidies

PIFM may from time to time waive all or a portion of its management fee and
subsidize all or a portion of the operating expenses of the Fund. In addition,
the Distributor has contractually agreed to waive a portion of its distribution
fees for the Class A shares for the fiscal year ending , 2001. Fee
waivers and subsidies will increase the Fund's total return.

NASD Maximum Sales Charge Rule

Pursuant to rules of the NASD, the Distributor is required to limit aggregate
initial sales charges, deferred sales charges and asset-based sales charges to
6.25% of total gross sales of each class of shares. Interest charges equal to
the prime rate plus one percent per annum may be added to the 6.25% limitation.
Sales from the reinvestment of dividends and distributions are not included in
the calculation of the 6.25% limitation. The annual asset-based sales charge of
the Fund may not exceed .75 of 1%. The 6.25% limitation applies to each class
of the Fund rather than on a per shareholder basis. If aggregate sales charges
were to exceed 6.25% of total gross sales of any class, all sales charges on
shares of that class would be suspended.

State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the portfolio securities of the
Fund and cash and in that capacity maintains certain financial and accounting
books and records pursuant to an agreement with the Fund. Subcustodians provide
custodial services for the Fund's foreign assets held outside the United
States.

Prudential Mutual Fund Services LLC (PMFS), Raritan Plaza One, Edison, New
Jersey 08837, serves as the Transfer and Dividend Disbursing Agent of the Fund.
PMFS is a wholly-owned subsidiary of PIFM. PMFS provides customary transfer
agency services to the Fund, including the handling of shareholder
communications, the processing of shareholder transactions, the maintenance of
shareholder account records, payment of dividends and distributions and related
functions. For these services, PMFS receives an annual fee per shareholder
account of $10.00, a new account set-up fee for each manually established
account of $2.00 and a monthly inactive zero balance account fee per
shareholder account of $.20. PMFS is also reimbursed for its out-of-pocket
expenses, including but not limited to postage, stationery, printing, allocable
communication expenses and other costs.

, serves as the Fund's independent
accountants, and in that capacity audits the annual reports of the Fund.

BROKERAGE ALLOCATION AND OTHER PRACTICES

The Manager is responsible for decisions to buy and sell securities, futures
and options on securities and futures for the Fund, the selection of brokers,
dealers and futures commission merchants to effect the transactions and the
negotiation of brokerage commissions, if any. The term "Manager" as used in
this section includes the Subadvisers. Broker-dealers may receive brokerage
commissions on Fund portfolio transactions, including options and the purchase
and sale of underlying securities upon the exercise

B-21
<PAGE>

of options. On foreign securities exchanges, commissions may be fixed. Orders
may be directed to any broker or futures commission merchant including, to the
extent and in the manner permitted by applicable law, Prudential Securities and
its affiliates. Brokerage commissions on United States securities options and
futures are subject to negotiation between the Manager and the broker or
futures commission merchant.

In the over-the-counter markets, securities are generally traded on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission, although the price of the security usually includes a profit to the
dealer. In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. On occasion, certain money
market instruments and U.S. Government agency securities may be purchased
directly from the issuer, in which case no commissions or discounts are paid.
The Fund will not deal with Prudential Securities or any affiliate in any
transaction in which Prudential Securities or any affiliate acts as principal,
except in accordance with rules of the Commission. Thus, it will not deal in
the over-the-counter market with Prudential Securities acting as market maker,
and it will not execute a negotiated trade with Prudential Securities if
execution involves Prudential Securities' acting as principal with respect to
any part of the Fund's order.

In placing orders for portfolio securities of the Fund, the Manager's
overriding objective is to obtain the best possible combination of favorable
price and efficient execution. The Manager seeks to effect each transaction at
a price and commission that provides the most favorable total cost or proceeds
reasonably attainable in the circumstances. The factors that the Manager may
consider in selecting a particular broker, dealer or futures commission
merchant (firms) are the Manager's knowledge of negotiated commission rates
currently available and other current transaction costs; the nature of the
portfolio transaction; the size of the transaction; the desired timing of the
trade; the activity existing and expected in the market for the particular
transaction; confidentiality; the execution, clearance and settlement
capabilities of the firms; the availability of research and research related
services provided through such firms; the Manager's knowledge of the financial
stability of the firms; the Manager's knowledge of actual or apparent
operational problems of firms; and the amount of capital, if any, that would be
contributed by firms executing the transaction. Given these factors, the Fund
may pay transaction costs in excess of that which another firm might have
charged for effecting the same transaction.

When the Manager selects a firm that executes orders or is a party to
portfolio transactions, relevant factors taken into consideration are whether
that firm has furnished research and research products and/or services, such as
research reports, research compilations, statistical and economic data,
computer data bases, quotation equipment and services, research oriented
computer software, hardware and services, reports concerning the performance of
accounts, valuations of securities, investment related periodicals, investment
seminars and other economic services and consultants. Such services are used in
connection with some or all of the Manager's investment activities; some of
such services, obtained in connection with the execution of transactions for
one investment account, may be used in managing other accounts, and not all of
these services may be used in connection with the Fund.

The Manager maintains an internal allocation procedure to identity those
firms who have provided it with research and research related products and/or
services, and the amount that was provided, and to endeavor to direct
sufficient commissions to them to ensure the continued receipt of those
services that the Manager believes provides a benefit to the Fund and its other
clients. The Manager makes a good faith determination that the research and/or
service is reasonable in light of the type of service provided and the price
and execution of the related portfolio transactions.

When the Manager deems the purchase or sale of equities to be in the best
interests of the Fund or its other clients, including Prudential, the Manager
may, but is under no obligation to, aggregate the transactions in order to
obtain the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the transactions, as well as the
expenses incurred in the transaction, will be made by the Manager in the manner
it considers to be most equitable and consistent with its fiduciary obligations
to its clients.

The allocation or orders among firms and the commission rates paid are
reviewed periodically by the Fund's Board of Trustees. Portfolio securities may
not be purchased from any underwriting or selling syndicate of which Prudential
Securities or any affiliate, during the existence of the syndicate, is a
principal underwriter (as defined in the Investment Company Act), except in
accordance with rules of the Commission. This limitation, in the opinion of the
Fund, will not significantly affect the Fund's ability to pursue its present
investment objective. However, in the future, in other circumstances, the Fund
may be at a disadvantage because of this limitation in comparison to other
funds with similar objectives but not subject to such limitations.

Subject to the above considerations, Prudential Securities (or any affiliate)
may act as a securities broker or futures commission merchant for the Fund. In
order for Prudential Securities (or any affiliate) to effect any portfolio
transactions for the

B-22
<PAGE>

Fund, the commissions, fees or other remuneration received by Prudential
Securities (or any affiliate) must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other firms in connection with
comparable transactions involving similar securities or futures being purchased
or sold on an exchange during a comparable period of time. This standard would
allow Prudential Securities (or any affiliate) to receive no more than the
remuneration which would be expected to be received by an unaffiliated firm in
a commensurate arm's-length transaction. Furthermore, the Board of Trustees of
the Company, including a majority of non-interested Trustees, has adopted
procedures which are reasonably designed to provide that any commissions, fees
or other remuneration paid to Prudential Securities (or any affiliate) are
consistent with the foregoing standard. In accordance with Section 11(a) of the
Securities Exchange Act of 1934, Prudential Securities may not retain
compensation for effecting transactions on a national securities exchange for
the Fund unless the Fund has expressly authorized the retention of such
compensation. Prudential Securities must furnish to the Fund at least annually
a statement setting forth the total amount of all compensation retained by
Prudential Securities from transactions effected for the Fund during the
applicable period. Brokerage and futures transactions with Prudential
Securities (or any affiliate) are also subject to such fiduciary standards as
may be imposed upon Prudential Securities (or such affiliate) by applicable
law.

CAPITAL SHARES, OTHER SECURITIES AND ORGANIZATION

The Company is authorized to issue an unlimited number of shares of
beneficial interest, $.001 par value per share divided into four classes,
designated Class A, Class B, Class C and Class Z shares. Each class of shares
represents an interest in the same assets of the Fund and is identical in all
respects except that (1) each class is subject to different sales charges and
distribution and/or service fees (except for Class Z shares, which are not
subject to any sales charges and distribution and/or service fees), which may
affect performance, (2) 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 one class differ from the interests of any other class, (3) each
class has a different exchange privilege, (4) only Class B shares have a
conversion feature and (5) Class Z shares are offered exclusively for sale to a
limited group of investors. In accordance with the Company's Declaration of
Trust, the Trustees may authorize the creation of additional series and classes
within such series, with such preferences, privileges, limitations and voting
and dividend rights as the Trustees may determine. The voting rights of the
shareholders of a series or class can be modified only by the vote of
shareholders of that series or class.

Shares of the Fund, when issued, are fully paid, nonassessable, fully
transferable and redeemable at the option of the holder. Shares are also
redeemable at the option of the Fund under certain circumstances. Each share of
each class is equal as to earnings, assets and voting privileges, except as
noted above, and each class of shares (with the exception of Class Z shares,
which are not subject to any distribution or service fees) bears the expenses
related to the distribution of its shares. Except for the conversion feature
applicable to the Class B shares, there are no conversion, preemptive or other
subscription rights. In the event of liquidation, each share of the Fund is
entitled to its portion of all of the Fund's assets after all debt and expenses
of the Fund have been paid. Since Class B and Class C shares generally bear
higher distribution expenses than Class A shares, the liquidation proceeds to
shareholders of those classes are likely to be lower than to Class A
shareholders and to Class Z shareholders, whose shares are not subject to any
distribution and/or service fees.

The Company does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold meetings of
shareholders unless, for example, the election of Trustees is required to be
acted on by shareholders under the Investment Company Act. Shareholders have
certain rights, including the right to call a meeting upon the vote of 10% of
the Company's outstanding shares for the purpose of voting on the removal of
one or more Trustees or to transact any other business.

Under the Declaration of Trust, the Trustees may authorize the creation of
additional series of shares (the proceeds of which would be invested in
separate, independently managed portfolios with distinct investment objectives
and policies and share purchase, redemption and net asset value procedures)
with such preferences, privileges, limitations and voting and dividend rights
as the Trustees may determine. All consideration received by the Fund for
shares of any additional series, and all assets in which such consideration is
invested, would belong to that series (subject only to the rights of creditors
of that series) and would be subject to the liabilities related thereto. Under
the Investment Company Act, shareholders of any additional series of shares
would normally have to approve the adoption of any advisory contract relating
to such series and of any changes in the fundamental investment policies
related thereto.

The Trustees have the power to alter the number and the terms of office of
the Trustees, provided that always at least a majority of the Trustees have
been elected by the shareholders of the Fund. The voting rights of shareholders
are not cumulative, so that holders of more than 50 percent of the shares
voting can, if they choose, elect all Trustees being selected, while the
holders of the remaining shares would be unable to elect any Trustees.

B-23
<PAGE>

PURCHASE, REDEMPTION AND PRICING OF FUND SHARES

Shares of the Fund may be purchased at a price equal to the next determined
net asset value (NAV) per share plus a sales charge which, at the election of
the investor, may be imposed either (1) at the time of purchase (Class A or
Class C shares) or (2) on a deferred basis (Class B or Class C shares). Class
Z shares of the Fund are offered to a limited group of investors at NAV
without any sales charges.

Purchase by Wire

For an initial purchase of shares of the Fund by wire, you must complete an
application and telephone PMFS to receive an account number at (800) 225-1852
(toll-free). The following information will be requested: your name, address,
tax identification number, class election, dividend distribution election,
amount being wired and wiring bank. Instructions should then be given by you
to your bank to transfer funds by wire to State Street Bank and Trust Company
(State Street), Boston, Massachusetts, Custody and Shareholder Services
Division, Attention: Jennison Alliance Focused Growth Fund, specifying on the
wire the account number assigned by PMFS and your name and identifying the
class in which you are eligible to invest (Class A, Class B, Class C or Class
Z shares).

If you arrange for receipt by State Street of federal funds prior to the
calculation of NAV (4:15 P.M., New York time) on a business day, you may
purchase shares of the Fund as of that day.

In making a subsequent purchase order by wire, you should wire State Street
directly and should be sure that the wire specifies Jennison Alliance Focused
Growth Fund, Class A, Class B, Class C or Class Z shares and your name and
individual account number. It is not necessary to call PMFS to make subsequent
purchase orders utilizing Federal Funds. The minimum amount which may be
invested by wire is $1,000.

Issuance of Fund Shares for Securities

Transactions involving the issuance of Fund shares for securities (rather
than cash) will be limited to (1) reorganizations, (2) statutory mergers, or
(3) other acquisitions of portfolio securities that (a) meet the investment
objective and policies of the Fund, (b) are liquid and not subject to
restrictions on resale, (c) have a value that is readily ascertainable via
listing on or trading in a recognized United States or international exchange
or market, and (d) are approved by one of the Fund's investment advisers.

Specimen Price Make-up

Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold with a maximum sales charge of 5%, Class
C* shares are sold with a 1% sales charge, and Class B* and Class Z shares are
sold at NAV. Using the NAV of the Fund at the inception of the Fund's public
offering, the maximum offering price of the Fund's shares is as follows:

<TABLE>
<CAPTION>
<S> <C>
Class A
Net asset value and redemption price per Class A share.................. $10.00
Maximum sales charge (5% of offering price)............................. .53
------
Offering price to public................................................ $10.53
======
Class B
Net asset value, redemption price and offering price per Class B
share*................................................................. $10.00
======
Class C
Net asset value and redemption price per Class C share*................. $10.00
Sales charge (1% of offering price)..................................... .10
------
Offering price to public................................................ $10.00
======
Class Z
Net asset value, offering price and redemption price per Class Z share.. $10.00
======
</TABLE>

- ---------
* Class B and Class C shares are subject to a contingent deferred sales charge
on certain redemptions.

B-24
<PAGE>

Selecting a Purchase Alternative

The following is provided to assist you in determining which method of
purchase best suits your individual circumstances and is based on current fees
and expenses being charged to the Fund:

If you intend to hold your investment in the Fund for less than 4 years and
do not qualify for a reduced sales charge on Class A shares, since Class A
shares are subject to an initial sales charge of 5% and Class B shares are
subject to a CDSC of 5% which declines to zero over a 6 year period, you should
consider purchasing Class C shares over either Class A or Class B shares.

If you intend to hold your investment for longer than 4 years, but less than
5 years, and do not qualify for a reduced sales charge on Class A shares, you
should consider purchasing Class B or Class C shares over Class A shares. This
is because the initial sales charge plus the cumulative annual distribution-
related fee on Class A shares would exceed those of the Class B and Class C
shares if you redeem your investment during this time period. In addition, more
of your money would be invested initially in the case of Class C shares,
because of the relatively low initial sales charge, and all of your money would
be invested initially in the case of Class B shares, which are sold at NAV.

If you intend to hold your investment for longer than 5 years, you should
consider purchasing Class A shares over either Class B or Class C shares. This
is because the maximum sales charge plus the cumulative annual distribution-
related fee on Class A shares would be less than those of the Class B and Class
C shares.

If you qualify for a reduced sales charge on Class A shares, it may be more
advantageous for you to purchase Class A shares over either Class B or Class C
shares regardless of how long you intend to hold your investment. However,
unlike Class B shares, you would not have all of your money invested initially
because the sales charge on Class A shares is deducted at the time of purchase.

If you do not qualify for a reduced sales charge on Class A shares and you
purchase Class B or Class C shares, you would have to hold your investment for
more than 6 years in the case of Class B shares and for more than 5 years in
the case of Class C shares for the higher cumulative annual distribution-
related fee on those shares plus, in the case of Class C shares, the 1% initial
sales charge to exceed the initial sales charge plus the cumulative annual
distribution-related fees on Class A shares. This does not take into account
the time value of money, which further reduces the impact of the higher Class B
or Class C distribution-related fee on the investment, fluctuations in NAV, the
effect of the return on the investment over this period of time or redemptions
when the CDSC is applicable.

Reduction and Waiver of Initial Sales Charge--Class A Shares

Benefit Plans. Class A shares may be purchased at NAV, without payment of an
initial sales charge, by pension, profit-sharing or other employee benefit
plans qualified under Section 401 of the Internal Revenue Code, deferred
compensation or annuity plans under Sections 401(a), 403(b) and 457 of the
Internal Revenue Code, "rabbi" trusts and non-qualified deferred compensation
plans (collectively, Benefit Plans), provided that the Benefit Plan has
existing assets of at least $ or 250 eligible employees or participants.
Class A shares may be purchased at NAV by participants who are repaying loans
made from such plans to the participant.

Other Waivers. In addition, Class A shares may be purchased at NAV, through
the Distributor or the Transfer Agent, by:

. officers of the Prudential Mutual Funds (including the Fund),

. employees of the Distributor, Prudential Securities, PIFM and their
subsidiaries and members of the families of such persons who maintain an
"employee related" account at Prudential Securities or the Transfer
Agent,

. employees of subadvisers of the Prudential Mutual Funds provided that
purchases at NAV are permitted by such person's employer,

. Prudential, directors, employees and special agents of Prudential and
its subsidiaries and all persons who have retired directly from active
service with Prudential or one of its subsidiaries,

. registered representatives and employees of brokers who have entered
into a selected dealer agreement with the Distributor provided that
purchases at NAV are permitted by such person's employer,

B-25
<PAGE>

. real estate brokers, agents and employees of real estate brokerage
companies affiliated with the Prudential Real Estate Affiliates who
maintain an account at Prudential Securities, Prusec or with the
Transfer Agent;

. investors who have a business relationship with a financial adviser who
joined Prudential Securities from another investment firm, provided that
(1) the purchase is made within 180 days of the commencement of the
financial adviser's employment at Prudential Securities, or within one
year in the case of Benefit Plans, (2) the purchase is made with
proceeds of a redemption of shares of any open-end non-money market fund
sponsored by the financial adviser's previous employer (other than a
fund which imposes a distribution or service fee of .25 of 1% or less)
and (3) the financial adviser served as the client's broker on the
previous purchase,

. investors in Individual Retirement Accounts, provided the purchase is
made in a directed rollover to such Individual Retirement Account or
with the proceeds of a tax-free rollover of assets from a Benefit Plan
for which Prudential provides administrative or recordkeeping services
and further provided that such purchase is made within 60 days of
receipt of the Benefit Plan distribution,

. orders placed by broker-dealers, investment advisers or financial
planners who have entered into an agreement with the Distributor, who
place trades for their own accounts or the accounts of their clients and
who charge a management, consulting or other fee for their services (for
example, mutual fund "wrap" or asset allocation programs), and

. orders placed by clients of broker-dealers, investment advisers or
financial planners who place trades for customer accounts if the
accounts are linked to the master account of such broker-dealer,
investment adviser or financial planner and the broker-dealer,
investment adviser or financial planner charges the clients a separate
fee for its services (for example, mutual fund "supermarket programs").

For an investor to obtain any reduction or waiver of the initial sales
charges, at the time of the sale either the Transfer Agent must be notified
directly by the investor or the Distributor must be notified by the broker
facilitating the transaction that the sale qualifies for the reduced or waived
sales charge. The reduction or waiver will be granted subject to confirmation
of your entitlement. No initial sales charges are imposed upon Class A shares
acquired upon the reinvestment of dividends and distributions.

Combined Purchase and Cumulative Purchase Privilege. If an investor or
eligible group of related investors purchases Class A shares of the Fund
concurrently with Class A shares of other Prudential Mutual Funds, the
purchases may be combined to take advantage of the reduced sales charges
applicable to larger purchases. See "How to Buy, Sell and Exchange Shares of
the Fund--Reducing or Waiving Class A's Initial Sales Charge" in the Prospectus
of the Fund.

An eligible group of related Fund investors includes any combination of the
following:

. an individual,

. the individual's spouse, their children and their parents,

. the individual's and spouse's Individual Retirement Account (IRA),

. any company controlled by the individual (a person, entity or group that
holds 25% or more of the outstanding voting securities of a company will
be deemed to control the company, and a partnership will be deemed to be
controlled by each of its general partners),

. a trust created by the individual, the beneficiaries of which are the
individual, his or her spouse, parents or children,

. a Uniform Gifts to Minors Act/Uniform Transfers to Minors Act account
created by the individual or the individual's spouse, and

. one or more employee benefit plans of a company controlled by an
individual.

Also, an eligible group of related Fund investors may include an employer (or
group of related employers) and one or more qualified retirement plans of such
employer or employers (an employer controlling, controlled by or under common
control with another employer is deemed related to that employer).

The Transfer Agent, the Distributor or your broker must be notified at the
time of purchase that the investor is entitled to a reduced sales charge. The
reduced sales charge will be granted subject to confirmation of the investor's
holdings. The Combined Purchase and Cumulative Purchase Privilege does not
apply to individual participants in any retirement or group plans.

B-26
<PAGE>

Letter of Intent. Reduced sales charges also are available to investors (or
an eligible group of related investors), including retirement and group plans,
who enter into a written Letter of Intent providing for the purchase, within a
thirteen-month period, of shares of the Fund (Investment Letter of Intent).
Retirement and group plans may also qualify to purchase Class A shares at NAV
by entering into a Letter of Intent whereby they agree to enroll, within a
thirteen-month period, a specified number of eligible employees or participants
(Participant Letter of Intent).

For purposes of the Investment Letter of Intent, all shares of the Fund and
shares of other Prudential Mutual Funds (excluding money market funds other
than those acquired pursuant to the exchange privilege) which were previously
purchased and are still owned are also included in determining the applicable
reduction. However, the value of shares held directly with the Transfer Agent
and through your broker will not be aggregated to determine the reduced sales
charge.

A Letter of Intent permits a purchaser, in the case of an Investment Letter
of Intent, to establish a total investment goal to be achieved by any number of
investments over a thirteen-month period and, in the case of a Participant
Letter of Intent, to establish a minimum eligible employee or participant
enrollment goal over a thirteen-month period. Each investment made during the
period, in the case of an Investment Letter of Intent, will receive the reduced
sales charge applicable to the amount represented by the goal, as if it were a
single investment. In the case of a Participant Letter of Intent, each
investment made during the period will be made at net asset value. Escrowed
Class A shares totaling 5% of the dollar amount of the Letter of Intent will be
held by the Transfer Agent in the name of the purchaser, except in the case of
retirement and group plans where the employer or plan sponsor will be
responsible for paying any applicable sales charge. The effective date of an
Investment Letter of Intent (except in the case of retirement and group plans),
may be back-dated up to 90 days, in order that any investments made during this
90-day period, valued at the purchaser's cost, can be applied to the
fulfillment of the Letter of Intent goal.

The Investment Letter of Intent does not obligate the investor to purchase,
nor the Fund to sell, the indicated amount. Similarly, the Participant Letter
of Intent does not obligate the retirement or group plan to enroll the
indicated number of eligible employees or participants. In the event the Letter
of Intent goal is not achieved within the thirteen-month period, the purchaser
(or the employer or plan sponsor in the case of any retirement or group plan)
is required to pay the difference between the sales charge otherwise applicable
to the purchases made during this period and sales charge actually paid. Such
payment may be made directly to the Distributor or, if not paid, the
Distributor will liquidate sufficient escrowed shares to obtain such
difference. If the goal is exceeded in an amount which qualifies for a lower
sales charge, a price adjustment is made by refunding to the purchaser the
amount of excess sales charge, if any, paid during the thirteen-month period.
Investors electing to purchase Class A shares of the Fund pursuant to a Letter
of Intent should carefully read such Letter of Intent.

The Distributor must be notified at the time of purchase that the investor is
entitled to a reduced sales charge. The reduced sales charge will, in the case
of an Investment Letter of Intent, be granted subject to confirmation of the
investor's holdings or in the case of a Participant Letter of Intent, subject
to confirmation of the number of eligible employees or participants in the
retirement or group plan. Letters of Intent are not available to individual
participants in any retirement or group plans.

Class B Shares

The offering price of Class B shares for investors choosing one of the
deferred sales charge alternatives is the NAV next determined following receipt
of an order in proper form by the Transfer Agent, your broker or the
Distributor. Although there is no sales charge imposed at the time of purchase,
redemptions of Class B shares may be subject to a CDSC. See "Sale of Shares--
Contingent Deferred Sales Charge" below.

The Distributor will pay, from its own resources, sales commissions of up to
4% of the purchase price of Class B shares to brokers, financial advisers and
other persons who sell Class B shares at the time of sale. This facilitates the
ability of the Fund to sell the Class B shares without an initial sales charge
being deducted at the time of purchase. The Distributor anticipates that it
will recoup its advancement of sales commissions from the combination of the
CDSC and the distribution fee.

Class C Shares

The offering price of Class C shares is the next determined NAV plus a 1%
sales charge. In connection with the sale of Class C shares, the Distributor
will pay, from its own resources, brokers, financial advisers and other persons
which distribute Class C shares a sales commission of up to 2% of the purchase
price at the time of the sale.

B-27
<PAGE>

Waiver of Initial Sales Charge--Class C Shares

Benefit Plans. Class C shares may be purchased at NAV, without payment of
an initial sales charge, by Benefit Plans (as defined above).

Investment of Redemption Proceeds from Other Investment Companies.
Investors may purchase Class C shares at NAV, without the initial sales
charge, with the proceeds from the redemption of shares of any unaffiliated
registered investment company. Such purchases must be made within 60 days of
the redemption. This waiver is not available to investors who purchase shares
directly from the Transfer Agent. You must notify the Transfer Agent directly
or through your broker if you are entitled to this waiver and provide the
Transfer Agent with such supporting documents as it may deem appropriate.

Class Z Shares

Class Z shares of the Fund currently are available for purchase by the
following categories of investors:

. pension, profit-sharing or other employee benefit plans qualified under
Section 401 of the Internal Revenue Code, deferred compensation and
annuity plans under Sections 457 and 403(b)(7) of the Internal Revenue
Code and non-qualified plans for which the Fund is an available option
(collectively, Benefit Plans), provided such Benefit Plans (in
combination with other plans sponsored by the same employer or group of
related employers) have at least $50 million in defined contribution
assets,

. participants in any fee-based program or trust program sponsored by an
affiliate of the Distributor which includes mutual funds as investment
options and for which the Fund is an available option,

. current and former Trustees of the Company, and

. the Manager, Sub-Manager or a Subadviser or any of their affiliates with
an investment of $10 million or more.

After a Benefit Plan qualifies to purchase Class Z shares, all subsequent
purchases will be for Class Z shares.

In connection with the sale of Class Z shares, the Manager, the Distributor
or one of their affiliates may pay brokers, financial advisers and other
persons which distribute shares a finder's fee, from its own resources, based
on a percentage of the net asset value of shares sold by such persons.

Sale of Shares

You can redeem your shares at any time for cash at the NAV next determined
after the redemption request is received in proper form (in accordance with
procedures established by the Transfer Agent in connection with investors'
accounts) by the Transfer Agent, the Distributor or your broker. In certain
cases, however, redemption proceeds will be reduced by the amount of any
applicable CDSC, as described below. See "Contingent Deferred Sales Charge"
below. If you are redeeming your shares through a broker, your broker must
receive your sell order before the Fund computes its NAV for that day (that
is, 4:15 P.M., New York time) in order to receive that day's NAV. Your broker
will be responsible for furnishing all necessary documentation to the
Distributor and may charge you for its services in connection with redeeming
shares of the Fund.

If you hold shares in non-certificate form, a written request for redemption
signed by you exactly as the account is registered is required. If you hold
certificates, the certificates, signed in the name(s) shown on the face of the
certificates, must be received by the Transfer Agent, the Distributor or your
broker in order for the redemption request to be processed. If redemption is
requested by a corporation, partnership, trust or fiduciary, written evidence
of authority acceptable to the Transfer Agent must be submitted before such
request will be accepted. All correspondence and documents concerning
redemptions should be sent to the Fund in care of its Transfer Agent,
Prudential Mutual Fund Services LLC, Attention: Redemption Services, P.O. Box
15010, New Brunswick, New Jersey 08906-5010, the Distributor or to your
broker.

Signature Guarantee. If the proceeds of the redemption (1) exceed $100,000,
(2) are to be paid to a person other than the record owner, (3) are to be sent
to an address other than the address on the Transfer Agent's records, or (4)
are to be paid to a corporation, partnership, trust or fiduciary, and your
shares are held directly with the Transfer Agent, the signature(s) on the
redemption request and on the certificates, if any, or stock power must be
guaranteed by an "eligible guarantor institution." An "eligible guarantor
institution" includes any bank, broker, dealer or credit union. The Transfer
Agent reserves the right to request additional information from, and make
reasonable inquiries of, any eligible guarantor institution.

B-28
<PAGE>

Payment for shares presented for redemption will be made by check within
seven days after receipt by the Transfer Agent, the Distributor or your broker
of the certificate and/or written request, except as indicated below. If you
hold shares through a broker, payment for shares presented for redemption will
be credited to your account at your broker, unless you indicate otherwise. Such
payment may be postponed or the right of redemption suspended at times (1) when
the New York Stock Exchange is closed for other than customary weekends and
holidays, (2) when trading on such Exchange is restricted, (3) when an
emergency exists as a result of which disposal by the Fund of securities owned
by it is not reasonably practicable or it is not reasonably practicable for the
Fund fairly to determine the value of its net assets, or (4) during any other
period when the Commission, by order, so permits; provided that applicable
rules and regulations of the Commission shall govern as to whether the
conditions prescribed in (2), (3) or (4) exist.

Redemption in Kind. If the Trustees determine that it would be detrimental
to the best interests of the remaining shareholders of the Fund to make payment
wholly or partly in cash, the Fund may pay the redemption price in whole or in
part by a distribution in kind of securities from the investment portfolio of
the Fund, in lieu of cash, in conformity with applicable rules of the
Commission. Securities will be readily marketable and will be valued in the
same manner as in a regular redemption. If your shares are redeemed in kind,
you would incur transaction costs in converting the assets into cash. The Fund,
however, has elected to be governed by Rule 18f-1 under the Investment Company
Act, under which the Fund is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the NAV of the Fund during any 90-day period
for any one shareholder.

Involuntary Redemption. In order to reduce expenses of the Fund, the
Trustees may redeem all of the shares of any shareholder, other than a
shareholder which is an IRA or other tax-deferred retirement plan, whose
account has a net asset value of less than $500 due to a redemption. The Fund
will give such shareholders 60 days' prior written notice in which to purchase
sufficient additional shares to avoid such redemption. No CDSC will be imposed
on any such involuntary redemption.

90-day Repurchase Privilege. If you redeem your shares and have not
previously exercised the repurchase privilege, you may reinvest any portion or
all of the proceeds of such redemption in shares of the Fund at the NAV next
determined after the order is received, which must be within 90 days after the
date of the redemption. Any CDSC paid in connection with such redemption will
be credited (in shares) to your account. (If less than a full repurchase is
made, the credit will be on a pro rata basis.) You must notify the Transfer
Agent, either directly or through the Distributor or your broker, at the time
the repurchase privilege is exercised to adjust your account for the CDSC you
previously paid. Thereafter, any redemptions will be subject to the CDSC
applicable at the time of the redemption. See "Contingent Deferred Sales
Charge" below. Exercise of the repurchase privilege will generally not affect
federal tax treatment of any gain realized upon redemption. However, if the
redemption was made within a 30 day period of the repurchase and if the
redemption resulted in a loss, some or all of the loss, depending on the amount
reinvested, may not be allowed for federal income tax purposes.

Contingent Deferred Sales Charge

Redemptions of Class B shares will be subject to a contingent deferred sales
charge or CDSC declining from 5% to zero over a six-year period. Class C shares
redeemed within 18 months of will be subject to a 1% CDSC. The CDSC will be
deducted from the redemption proceeds and reduce the amount paid to you. The
CDSC will be imposed on any redemption by you which reduces the current value
of your Class B or Class C shares to an amount which is lower than the amount
of all payments by you for shares during the preceding six years, in the case
of Class B shares, and 18 months, in the case of Class C shares. A CDSC will be
applied on the lesser of the original purchase price or the current value of
the shares being redeemed. Increases in the value of your shares or shares
acquired through reinvestment of dividends or distributions are not subject to
a CDSC. The amount of any CDSC will be paid to and retained by the Distributor.

The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of shares until the time of
redemption of such shares. Solely for purposes of determining the number of
years from the time of any payment for the purchase of shares, all payments
during a month will be aggregated and deemed to have been made on the last day
of the month. The CDSC will be calculated from the first day of the month after
the initial purchase, excluding the time shares were held in a money market
fund.

B-29
<PAGE>

The following table sets forth the rates of the CDSC applicable to redemption
of Class B shares:

<TABLE>
<CAPTION>
Contingent Deferred Sales
Charge as a Percentage
Year Since Purchase of Dollars Invested or
Payment Made Redemption Proceeds
------------------- -------------------------
<S> <C>
First........................................ 5.0%
Second....................................... 4.0%
Third........................................ 3.0%
Fourth....................................... 2.0%
Fifth........................................ 1.0%
Sixth........................................ 1.0%
Seventh...................................... None
</TABLE>

In determining whether a CDSC is applicable to a redemption, the calculation
will be made in a manner that results in the lowest possible rate. It will be
assumed that the redemption is made first of amounts representing shares
acquired pursuant to the reinvestment of dividends and distributions; then of
amounts representing the increase in NAV above the total amount of payments for
the purchase of Class B shares made during the preceding six years and 18
months for Class C shares; then of amounts representing the cost of shares held
beyond the applicable CDSC period; and finally, of amounts representing the
cost of shares held for the longest period of time within the applicable CDSC
period.

For example, assume you purchased 100 Class B shares at $10 per share for a
cost of $1,000. Subsequently, you acquired 5 additional Class B shares through
dividend reinvestment. During the second year after the purchase you decide to
redeem $500 of your investment. Assuming at the time of the redemption the NAV
had appreciated to $12 per share, the value of your Class B shares would be
$1,260 (105 shares at $12 per share). The CDSC would not be applied to the
value of the reinvested dividend shares and the amount which represents
appreciation ($260). Therefore, $240 of the $500 redemption proceeds ($500
minus $260) would be charged at a rate of 4% (the applicable rate in the second
year after purchase) for a total CDSC of $9.60.

For federal income tax purposes, the amount of the CDSC will reduce the gain,
or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.

Waiver of Contingent Deferred Sales Charge--Class B Shares. The CDSC will be
waived in the case of a redemption following the death or disability of a
shareholder or, in the case of a trust account, following the death or
disability of the grantor. The waiver is available for total or partial
redemptions of shares owned by a person, either individually or in joint
tenancy, at the time of death or initial determination of disability, provided
that the shares were purchased prior to death or disability.

The CDSC will also be waived in the case of a total or partial redemption in
connection with certain distributions made without penalty under the Internal
Revenue Code from a tax-deferred retirement plan, an IRA or Section 403(b)
custodial account. These distributions are:

(1) in the case of a tax-deferred retirement plan, a lump-sum or other
distribution after retirement;

(2) in the case of an IRA (including a Roth IRA), a lump-sum or other
distribution after attaining age 59 1/2 or a periodic distribution based on
life expectancy;

(3) in the case of a Section 403(b) custodial account, a lump sum or other
distribution after attaining age 59 1/2; and

(4) a tax-free return of an excess contribution or plan distributions
following the death or disability of the shareholder, provided that the shares
were purchased prior to death or disability.

The waiver does not apply in the case of a tax-free rollover or transfer of
assets, other than one following a separation from service (that is, following
voluntary or involuntary termination of employment or following retirement).
Under no circumstances will the CDSC be waived on redemptions resulting from
the termination of a tax-deferred retirement plan, unless such redemptions
otherwise qualify for a waiver as described above. Shares purchased with
amounts used to repay a loan from such plans on which a CDSC was not previously
deducted will thereafter be subject to a CDSC without regard to the time such
amounts were previously invested. In the case of a 401(k) plan, the CDSC will
also be waived upon the redemption of shares purchased with amounts used to
repay loans made from the account to the participant and from which a CDSC was
previously deducted.

Systematic Withdrawal Plan. The CDSC will be waived (or reduced) on certain
redemptions from a Systematic Withdrawal Plan. On an annual basis, up to 12% of
the total dollar amount subject to the CDSC may be redeemed without charge. The
Transfer

B-30
<PAGE>

Agent will calculate the total amount available for this waiver annually on the
anniversary date of your purchase. The CDSC will be waived (or reduced) on
redemptions until this threshold 12% is reached.

In addition, the CDSC will be waived on redemptions of shares held by
Trustees of the Company.

You must notify the Fund's Transfer Agent either directly or through your
broker at the time of redemption, that you are entitled to waiver of the CDSC
and provide the Transfer Agent with such supporting documentation as it may
deem appropriate. The waiver will be granted subject to confirmation of your
entitlement. In connection with these waivers, the Transfer Agent will require
you to submit the supporting documentation set forth below.

<TABLE>
<S> <C>
Category of Waiver Required Documentation

Death A copy of the shareholder's death
certificate or, in the case of a trust,
a copy of the grantor's death
certificate, plus a copy of the trust
agreement identifying the grantor.

Disability--An individual will be A copy of the Social Security
considered disabled if he or she is Administration award letter or a letter
unable to engage in any substantial from a physician on the physician's
gainful activity by reason of any letterhead stating that the shareholder
medically determinable physical or (or, in the case of a trust, the
mental impairment which can be grantor) is permanently disabled. The
expected to result in death or to letter must also indicate the date of
be of long-continued and indefinite disability.
duration.

Distribution from an IRA or 403(b) A copy of the distribution form from
Custodial Account the custodial firm indicating (i) the
date of birth of the shareholder and
(ii) that the shareholder is over age
59 and is taking a normal
distribution--signed by the
shareholder.

Distribution from Retirement Plan A letter signed by the plan
administrator/trustee indicating the
reason for the distribution.

Excess Contributions A letter from the shareholder (for an
IRA) or the plan administrator/trustee
on company letterhead indicating the
amount of the excess and whether or not
taxes have been paid.
</TABLE>

The Transfer Agent reserves the right to request such additional documents as
it may deem appropriate.

Waiver of Contingent Deferred Sales Charge--Class C Shares

The CDSC will be waived on redemptions from Benefit Plans holding shares
through a broker for which the broker provides administrative or recordkeeping
services.

Conversion Feature--Class B Shares

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.

Since the Fund tracks amounts paid rather than the number of shares bought on
each purchase of Class B shares, the number of Class B shares eligible to
convert to Class A shares (excluding shares acquired through the automatic
reinvestment of dividends and other distributions) (the Eligible Shares) will
be determined on each conversion date in accordance with the following formula:
(1) the ratio of (a) the amounts paid for Class B shares purchased at least
seven years prior to the conversion date to (b) the total amount paid for all
Class B shares purchased and then held in your account (2) multiplied by the
total number of Class B shares purchased and then held in your account. Each
time any Eligible Shares in your account convert to Class A shares, all shares
or amounts representing Class B shares then in your account that were acquired
through the automatic reinvestment of dividends and other distributions will
convert to Class A shares.

For purposes of determining the number of Eligible Shares, if the Class B
shares in your account on any conversion date are the result of multiple
purchases at different net asset values per share, the number of Eligible
Shares calculated as described above will generally be either more or less than
the number of shares actually purchased approximately seven years before such
conversion date. For example, if 100 shares were initially purchased at $10 per
share (for a total of $1,000) and a second purchase

B-31
<PAGE>

of 100 shares was subsequently made at $11 per share (for a total of $1,100),
95.24 shares would convert approximately seven years from the initial purchase
(that is, $1,000 divided by $2,100 (47.62%), multiplied by 200 shares equals
95.24 shares). The Manager reserves the right to modify the formula for
determining the number of Eligible Shares in the future as it deems appropriate
on notice to shareholders.

Since annual distribution-related fees are lower for Class A shares than
Class B shares, the per share NAV of the Class A shares may be higher than that
of the Class B shares at the time of conversion. Thus, although the aggregate
dollar value will be the same, you may receive fewer Class A shares than Class
B shares converted.

For purposes of calculating the applicable holding period for conversions,
all payments for Class B shares during a month will be deemed to have been made
on the last day of the month, or for Class B shares acquired through exchange,
or a series of exchanges, on the last day of the month in which the original
payment for purchases of such Class B shares was made. For Class B shares
previously exchanged for shares of a money market fund, the time period during
which such shares were held in the money market fund will be excluded. For
example, Class B shares held in a money market fund for one year would not
convert to Class A shares until approximately eight years from purchase. For
purposes of measuring the time period during which shares are held in a money
market fund, exchanges will be deemed to have been made on the last day of the
month. Class B shares acquired through exchange will convert to Class A shares
after expiration of the conversion period applicable to the original purchase
of such shares.

The conversion feature may be subject to the continuing availability of
opinions of counsel or rulings of the Internal Revenue Service (1) that the
dividends and other distributions paid on Class A, Class B, Class C and Class Z
shares will not constitute "preferential dividends" under the Internal Revenue
Code and (2) that the conversion of shares does not constitute a taxable event.
The conversion of Class B shares into Class A shares may be suspended if such
opinions or rulings are no longer available. If conversions are suspended,
Class B shares of the Fund will continue to be subject, possibly indefinitely,
to their higher annual distribution and service fee.

SHAREHOLDER INVESTMENT ACCOUNT

Upon the initial purchase of Fund shares, a Shareholder Investment Account is
established for each investor under which the shares are held for the investor
by the Transfer Agent. If a share certificate is desired, it must be requested
in writing for each transaction. Certificates are issued only for full shares
and may be redeposited in the Account at any time. There is no charge to the
investor for issuance of a certificate. The Fund makes available to its
shareholders the following privileges and plans.

Automatic Reinvestment of Dividends and Distributions

For the convenience of investors, all dividends and distributions are
automatically reinvested in full and fractional shares of the Fund. An investor
may direct the Transfer Agent in writing not less than five full business days
prior to the record date to have subsequent dividends or distributions sent in
cash rather than reinvested. In the case of recently purchased shares for which
registration instructions have not been received on the record date, cash
payment will be made directly to the broker. Any shareholder who receives a
cash payment representing a dividend or distribution may reinvest such dividend
or distribution at NAV by returning the check or the proceeds to the Transfer
Agent within 30 days after the payment date. Such investment will be made at
the NAV per share next determined after receipt of the check or proceeds by the
Transfer Agent. Such shareholder will receive credit for any CDSC paid in
connection with the amount of proceeds being reinvested.

Dollar Cost Averaging

Dollar cost averaging is a method of accumulating shares by investing a fixed
amount of dollars in shares at set intervals. An investor buys more shares when
the price is low and fewer shares when the price is high. The average cost per
share is lower than it would be if a constant number of shares were bought at
set intervals.

Dollar cost averaging may be used, for example, to plan for retirement, to
save for a major expenditure, such as the purchase of a home, or to finance a
college education. The cost of a year's education at a four-year college today
averages around $14,000 at a private college and around $6,000 at a public
university. Assuming these costs increase at a rate of 7% a year, as has been
projected, for the freshman class of 2011, the cost of four years at a private
college could reach $210,000 and over $90,000 at a public university.]

B-32
<PAGE>

The following chart shows how much you would need in monthly investments to
achieve specified lump sums to finance your investment goals./1/

<TABLE>
<CAPTION>
Period of
Monthly Investments: $100,000 $150,000 $200,000 $250,000
-------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
25 Years............................. $ 105 $ 158 $ 210 $ 263
20 Years............................. 170 255 340 424
15 Years............................. 289 438 578 722
10 Years............................. 547 820 1,093 1,366
5 Years.............................. 1,361 2,041 2,721 3,402
</TABLE>

See "Automatic Investment Plan"

- ----------
/1/ Source information concerning the costs of education at public and
private universities is available from The College Board Annual Survey of
Colleges, 1993. Average costs for private institutions include tuition, fees,
room and board for the 1993-1994 academic year.

/1/ The chart assumes an effective rate of return of 8% (assuming monthly
compounding). This example is for illustrative purposes only and is not
intended to reflect the performance of an investment in shares of the Fund. The
investment return and principal value of an investment will fluctuate so that
an investor's shares when redeemed may be worth more or less than their
original cost.

Automatic Investment Plan (AIP)

Under AIP, an investor may arrange to have a fixed amount automatically
invested in shares of the Fund monthly by authorizing his or her bank account
or brokerage account to be debited to invest specified dollar amounts in shares
of the Fund. The investor's bank must be a member of the Automatic Clearing
House System. Share certificates are not issued to AIP participants.

Further information about this program and an application form can be
obtained from the Transfer Agent, the Distributor or your broker.

Systematic Withdrawal Plan

A systematic withdrawal plan is available to shareholders through the
Transfer Agent, the Distributor or your broker. Such withdrawal plan provides
for monthly or quarterly checks in any amount, except as provided below, up to
the value of the shares in the shareholder's account. Withdrawals of Class B or
Class C shares may be subject to a CDSC.

In the case of shares held through the Transfer Agent (1) a $10,000 minimum
account value applies, (2) withdrawals may not be for less than $100 and (3)
the shareholder must elect to have all dividends and/or distributions
automatically reinvested in additional full and fractional shares at NAV on
shares held under this plan.

The Transfer Agent, the Distributor or your broker acts as an agent for the
shareholder in redeeming sufficient full and fractional shares to provide the
amount of the periodic withdrawal payment. The systematic withdrawal plan may
be terminated at any time, and the Distributor reserves the right to initiate a
fee of up to $5 per withdrawal, upon 30 days' written notice to the
shareholder.

Withdrawal payments should not be considered as dividends, yield or income.
If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted.

Furthermore, each withdrawal constitutes a redemption of shares, and any gain
or loss realized must be recognized for federal income tax purposes. In
addition, withdrawals made concurrently with purchases of additional shares are
inadvisable because of the sales charges applicable to (1) the purchase of
Class A and Class C shares and (2) the redemption of Class B and Class C
shares. Each shareholder should consult his or her own tax adviser with regard
to the tax consequences of the plan, particularly if used in connection with a
retirement plan.

Tax-Deferred Retirement Accounts

Individual Retirement Accounts. An individual retirement account (IRA)
permits the deferral of federal income tax on income earned in the account
until the earnings are withdrawn. The following chart represents a comparison
of the earnings in a

B-33
<PAGE>

personal savings account with those in an IRA, assuming a $2,000 annual
contribution, an 8% rate of return and a 39.6% federal income tax bracket and
shows how much more retirement income can accumulate within an IRA as opposed
to a taxable individual savings account.

Tax-Deferred Compounding/1/

<TABLE>
<CAPTION>
Contributions Personal
Made Over: Savings IRA
------------- -------- -------
<S> <C> <C>
10 years.............................................. $26,165 $31,291
15 years.............................................. 44,675 58,649
20 years.............................................. 68,109 98,846
25 years.............................................. 97,780 157,909
30 years.............................................. 135,346 244,692
</TABLE>
- ----------
/1/The chart is for illustrative purposes only and does not represent the
performance of the Fund or any specific investment. It shows taxable versus
tax-deferred compounding for the periods and on the terms indicated. Earnings
in a traditional IRA account will be subject to tax when withdrawn from the
account. Distributions from a Roth IRA which meet the conditions required under
the Internal Revenue Code will not be subject to tax upon withdrawal from the
account.

NET ASSET VALUE

The Fund's net asset value per share or NAV is determined by subtracting its
liabilities from the value of its assets and dividing the remainder by the
number of outstanding shares. NAV is calculated separately for each class. The
Fund will compute its NAV at 4:15 P.M., New York time, on each day the New York
Stock Exchange is open for trading except on days on which no orders to
purchase, sell or redeem Fund shares have been received or days on which
changes in the value of the Fund's portfolio securities do not affect NAV. In
the event the New York Stock Exchange closes early on any business day, the NAV
of the Fund's shares shall be determined at a time between such closing and
4:15 P.M., New York time. The New York Stock Exchange is closed on the
following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.

Under the Investment Company Act, the Board of Trustees is responsible for
determining in good faith the fair value of securities of the Fund. In
accordance with procedures adopted by the Board of Trustees, the value of
investments listed on a securities exchange and NASDAQ National Market System
securities (other than options on stock and stock indices) are valued at the
last sales price on such exchange system on the day of valuation, or, if there
was no sale on such day, the mean between the last bid and asked prices on such
day, as provided by a pricing service or at the bid price on such day in the
absence of an asked price. Corporate bonds (other than convertible debt
securities) and U.S. Government securities that are actively traded in the
over-the-counter market, including listed securities for which the primary
market is believed by the Manager, in consultation with the Subadvisers, to be
over-the-counter, are valued on the basis of valuations provided by an
independent pricing agent or principal market maker which uses information with
respect to transactions in bonds, quotations from bond dealers, agency ratings,
market transactions in comparable securities and various relationships between
securities in determining value. Convertible debt securities that are actively
traded in the over-the-counter market, including listed securities for which
the primary market is believed by the Manager in consultation with the
Subadvisers to be over-the-counter, are valued at the mean between the last
reported bid and asked prices provided by principal market makers. Options on
stock and stock indices traded on an exchange are valued at the mean between
the most recently quoted bid and asked prices on the respective exchange and
futures contracts and options thereon are valued at their last sale prices as
of the close of trading on the applicable commodities exchange or board of
trade or, if there was no sale on the applicable commodities exchange or board
of trade on such day, at the mean between the most recently quoted bid and
asked prices on such exchange or board of trade. Quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at
the current rate obtained from a recognized bank or dealer, and foreign
currency forward contracts are valued at the current cost of covering or
offsetting such contracts. Should an extraordinary event, which is likely to
affect the value of the security, occur after the close of an exchange on which
a portfolio security is traded, such security will be valued at fair value
considering factors determined in good faith by an investment adviser under
procedures established by and under the general supervision of the Fund's Board
of Trustees.

Securities or other assets for which reliable market quotations are not
readily available or for which the pricing agent or principal market maker does
not provide a valuation or methodology or provides a valuation or methodology
that, in the judgment

B-34
<PAGE>

of the Manager or Subadvisers (or Valuation Committee or Board of Trustees),
does not represent fair value, are valued by the Valuation Committee or Board
of Trustees in consultation with the Manager and Subadvisers, including their
respective portfolio managers, traders and research and credit analysts on the
basis of the following factors: cost of the security, transactions in
comparable securities, relationships among various securities and such other
factors as may be determined by the Manager, Subadvisers, Board of Trustees or
Valuation Committee to materially affect the value of the security. Short-term
investments are valued at cost, with interest accrued or discount amortized to
the date of maturity, if their original maturity was 60 days or less, unless
this is determined by the Board of Trustees not to represent fair value. Short-
term securities with remaining maturities of more than 60 days, for which
market quotations are readily available, are valued at their current market
quotations as supplied by an independent pricing agent or principal market
maker.

Although the legal rights of each class of shares are substantially
identical, the different expenses borne by each class will result in different
NAVs and dividends. The NAV of Class B and Class C shares will generally be
lower than the NAV of Class A shares as a result of the larger distribution-
related fee to which Class B and Class C shares are subject. The NAV of Class Z
shares will generally be higher than the NAV of Class A, Class B or Class C
shares because Class Z shares are not subject to any distribution or service
fee. It is expected, however, that the NAV of the four classes will tend to
converge immediately after the recording of dividends, if any, which will
differ by approximately the amount of the distribution and/or service fee
expense accrual differential among the classes.

TAXES, DIVIDENDS AND DISTRIBUTIONS

The Fund has elected to qualify and intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code.
This relieves the Fund (but not its shareholders) from paying federal income
tax on income and capital gains which are distributed to shareholders, and
permits net capital gains of the Fund (that is, the excess of net long-term
capital gains over net short-term capital losses) to be treated as long-term
capital gains of the shareholders, regardless of how long shareholders have
held their shares in the Fund. Net capital gains of the Fund which are
available for distribution to shareholders will be computed by taking into
account any capital loss carryforward of the Fund.

Qualification of the Fund as a regulated investment company requires, among
other things, that (a) the Fund derive at least 90% of its annual gross income
(without reduction for losses from the sale or other disposition of securities
or foreign currencies) from interest, dividends, payments with respect to
securities loans and gains from the sale or other disposition of securities or
options thereon or foreign currencies, or other income (including but not
limited to gains from options, futures or forward contracts) derived with
respect to its business of investing in such securities or currencies; (b) the
Fund diversify its holdings so that, at the end of each quarter of the taxable
year, (1) at least 50% of the value of the Fund's assets is represented by
cash, U.S. Government securities and other securities limited in respect of any
one issuer to an amount not greater than 5% of the value of the Fund's assets
and 10% of the outstanding voting securities of such issuer, and (2) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than U.S. Government securities); and (c) the Fund distribute to
its shareholders at least 90% of its net investment income and net short-term
gains (that is, the excess of net short-term capital gains over net long-term
capital losses) in each year.

Gains or losses on sales of securities by the Fund will be treated as long-
term capital gains or losses if the securities have been held by it for more
than one year, except in certain cases where the Fund acquires a put or writes
a call thereon or otherwise holds an offsetting position with respect to the
securities. Other gains or losses on the sale of securities will be short-term
capital gains or losses. Gains and losses on the sale, lapse or other
termination of options on securities will be treated as gains and losses from
the sale of securities. If an option written by the Fund on securities lapses
or is terminated through a closing transaction, such as a repurchase by the
Fund of the option from its holder, the Fund will generally realize short-term
capital gain or loss. If securities are sold by the Fund pursuant to the
exercise of a call option written by it, the Fund will include the premium
received in the sale proceeds of the securities delivered in determining the
amount of gain or loss on the sale. Certain of the Fund's transactions may be
subject to wash sale, short sale, constructive sale, anti-conversion and
straddle provisions of the Internal Revenue Code which may, among other things,
require the Fund to defer recognition of losses. In addition, debt securities
acquired by the Fund may be subject to original issue discount and market
discount rules which, respectively, may cause the Fund to accrue income in
advance of the receipt of cash with respect to interest or cause gains to be
treated as ordinary income.

Special rules apply to most options on stock indices, futures contracts and
options thereon. These investments will generally constitute Section 1256
contracts and will be required to be "marked to market" for federal income tax
purposes at the end of the

B-35
<PAGE>

Fund's taxable year; that is, treated as having been sold at market value.
Sixty percent of any gain or loss recognized on these deemed sales and on
actual dispositions will be treated as long-term capital gain or loss, and the
remainder will be treated as short-term capital gain or loss.

Gain or loss on the sale, lapse or other termination of options on stock and
on narrowly-based stock indices will be capital gain or loss and will be long-
term or short-term depending on the holding period of the option. In addition,
positions which are part of a "straddle" will be subject to certain wash sale,
short sale and constructive sale provisions of the Internal Revenue Code. In
the case of a straddle, the Fund may be required to defer the recognition of
losses on positions it holds to the extent of any unrecognized gain on
offsetting positions held by the Fund.

Gains or losses attributable to fluctuations in exchange rates which occur
between the time the Fund accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time
the Fund actually collects such receivables or pays such liabilities are
treated as ordinary income or ordinary loss. Similarly, gains or losses on
dispositions of debt securities denominated in a foreign currency attributable
to fluctuations in the value of the foreign currency between the date of
acquisition of the security and the date of disposition also are treated as
ordinary gain or loss. These gains or losses, referred to under the Internal
Revenue Code as "Section 988" gains or losses, increase or decrease the amount
of the Fund's investment company taxable income available to be distributed to
its shareholders as ordinary income, rather than increasing or decreasing the
amount of the Fund's net capital gain. If Section 988 losses exceed other
investment company taxable income during a taxable year, the Fund would not be
able to make any ordinary dividend distributions, or distributions made before
the losses were realized would be recharacterized as a return of capital to
shareholders, rather than as an ordinary dividend, reducing each shareholder's
basis in his or her Fund shares.

Shareholders electing to receive dividends and distributions in the form of
additional shares will have a cost basis for federal income tax purposes in
each share so received equal to the NAV of a share of the Fund on the
reinvestment date.

Any dividends or distributions paid shortly after a purchase by an investor
may have the effect of reducing the per share net asset value of the investor's
shares by the per share amount of the dividends or distributions. Furthermore,
such dividends or distributions, although in effect a return of capital, are
subject to federal income taxes. Therefore, prior to purchasing shares of the
Fund, the investor should carefully consider the impact of dividends or capital
gains distributions which are expected to be or have been announced.

Any loss realized on a sale, redemption or exchange of shares of the Fund by
a shareholder will be disallowed to the extent the shares are replaced within a
61-day period (beginning 30 days before the disposition of shares). Shares
purchased pursuant to the reinvestment of a dividend will constitute a
replacement of shares.

A shareholder who acquires shares of the Fund and sells or otherwise disposes
of such shares within 90 days of acquisition may not be allowed to include
certain sales charges incurred in acquiring such shares for purposes of
calculating gain or loss realized upon a sale or exchange of shares of the
Fund.

Dividends of net investment income and distributions of net short-term
capital gains paid to a shareholder (including a shareholder acting as a
nominee or fiduciary) who is a nonresident alien individual, a foreign
corporation or a foreign partnership (foreign shareholder) are subject to a 30%
(or lower treaty rate) withholding tax upon the gross amount of the dividends
unless the dividends are effectively connected with a U.S. trade or business
conducted by the foreign shareholder. Capital gain distributions paid to a
foreign shareholder are generally not subject to withholding tax. A foreign
shareholder will, however, be required to pay U.S. income tax on any dividends
and capital gain distributions which are effectively connected with a U.S.
trade or business of the foreign shareholder.

Dividends received by corporate shareholders are eligible for a dividends-
received deduction of 70% to the extent the Fund's income is derived from
qualified dividends received by the Fund from domestic corporations. Dividends
attributable to foreign corporations, interest income, capital and currency
gain, gain or loss from Section 1256 contracts (described above), and income
from certain other sources will not constitute qualified dividends. Individual
shareholders are not eligible for the dividends-received deduction.

The per share dividends on Class B and Class C shares will be lower than the
per share dividends on Class A and Class Z shares as a result of the higher
distribution-related fee applicable to the Class B and Class C shares. The per
share distributions of net capital gains, if any, will be paid in the same
amount for Class A, Class B, Class C and Class Z shares. See "Net Asset Value."

B-36
<PAGE>

The Fund is required to distribute 98% of its ordinary income in the same
calendar year in which it is earned. The Fund is also required to distribute
during the calendar year 98% of the capital gain net income it earned during
the 12 months ending on October 31 of such calendar year. In addition, the Fund
must distribute during the calendar year all undistributed ordinary income and
undistributed capital gain net income from the prior year or the twelve-month
period ending on October 31 of such prior calendar year, respectively. To the
extent it does not meet these distribution requirements, the Fund will be
subject to a nondeductible 4% excise tax on the undistributed amount. For
purposes of this excise tax, income on which the Fund pays income tax is
treated as distributed.

The Fund may, from time to time, invest in Passive Foreign Investment
Companies (PFICs). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (a) at least 75% of its gross income is passive
or (b) an average of at least 50% of its assets produce, or are held for the
production of, passive income. If the Fund acquires and holds stock in a PFIC
beyond the end of the year of its acquisition, the Fund will be subject to
federal income tax on a portion of any "excess distribution" received on the
stock or on any gain from disposition of the stock (collectively, PFIC income),
plus interest thereon, even if the Fund distributes the PFIC income as a
taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to it to the extent that income is distributed to its
shareholders. The Fund may make a "mark-to-market" election with respect to any
marketable stock it holds of a PFIC. If the election is in effect, at the end
of the Fund's taxable year, the Fund will recognize the amount of gains, if
any, as ordinary income with respect to PFIC stock. No loss will be recognized
on PFIC stock, except to the extent of gains recognized in prior years.
Alternatively, the Fund, if it meets certain requirements, may elect to treat
any PFIC in which it invests as a "qualified electing fund," in which case, in
lieu of the foregoing tax and interest obligation, the Fund will be required to
include in income each year its pro rata share of the qualified electing fund's
annual ordinary earnings and net capital gain, even if they are not distributed
to the Fund; those amounts would be subject to the distribution requirements
applicable to the Fund described above.

Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Income tax
treaties between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine in advance the effective
rate of foreign tax to which the Fund will be subject, since the amount of the
Fund's assets to be invested in various countries will vary. The Fund does not
expect to meet the requirements of the Internal Revenue Code for "passing-
through" to its shareholders any foreign income taxes paid.

Foreign shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Fund.

Dividends and distributions may also be subject to state and local taxes.

PERFORMANCE INFORMATION

Average Annual Total Return. The Fund may from time to time advertise its
average annual total return. Average annual total return is determined
separately for Class A, Class B, Class C and Class Z shares.

Average annual total return is computed according to the following formula:

P(1 + T) n = ERV

<TABLE>
<S> <C> <C> <C>
Where: P = hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1000 payment made at the
beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year
periods (or fractional portion thereof).
</TABLE>

Average annual total return takes into account any applicable initial or
deferred sales charges but does not take into account any federal or state
income taxes that may be payable upon redemption.

Aggregate Total Return. The Fund may also advertise its aggregate total
return. Aggregate total return is determined separately for Class A, Class B,
Class C and Class Z shares.

B-37
<PAGE>

Aggregate total return represents the cumulative change in the value of an
investment in the Fund and is computed according to the following formula:

ERV--P
P

<TABLE>
<S> <C> <C> <C>
Where: P = a hypothetical initial payment of $1000.
ERV = ending redeemable value of a hypothetical $1000 payment made at the beginning of the 1, 5 or 10 year
periods
at the end of the 1, 5 or 10 year periods (or fractional portion thereof).
</TABLE>

Aggregate total return does not take into account any federal or state income
taxes that may be payable upon redemption or any applicable initial or
contingent deferred sales charges.

Yield. The Fund may from time to time advertise its yield as calculated over
a 30-day period. Yield is calculated separately for Class A, Class B, Class C
and Class Z shares. The yield will be computed by dividing the Fund's net
investment income per share earned during this 30-day period by the maximum
offering price per share on the last day of this period. Yield is calculated
according to the following formula:

a - b+1)6-1 ]
YIELD = 2[(

cd
<TABLE>
<S> <C> <C> <C>
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
the average daily number of shares outstanding during the period that were entitled to receive
c = dividends.
d = the maximum offering price per share on the last day of the period.
</TABLE>

Yield fluctuates and an annualized yield quotation is not a representation by
the Fund as to what an investment in the Fund will actually yield for any given
period.

The Fund may include comparative performance information in advertising or
marketing the Fund's shares. Such performance information may include data from
Lipper Inc., Morningstar Publications, Inc., and other industry publications,
which publish and market indices. Set forth below is a chart which compares the
performance of different types of investments over the long-term and the rate
of inflation./1/

Advertising for the Fund also may describe the performance of the stock
market over the last three years, which has shown dynamic growth based on the
performance of the Standard & Poor's 500 Stock Index, according to Standard &
Poor's Ratings Group. As a consequence, many analysts believe that individual
stock selection will become increasingly important. Indeed, the average
domestic equity mutual fund portfolio contained 126 individual stocks at
December 31, 1998, according to Morningstar Principia Plus. Over the past 20
years, value investing and growth investing have each been successful, but one
style or the other has delivered the higher returns in a given year, based on
the performance of the stocks in the S&P/Barra Growth Index and the S&P/Barra
Value Index, each of which are unmanaged, capitalization weighted indices. The
Growth Index includes stocks in the S&P 500 with higher price-to-book ratios
and the Value Index includes stocks in the S&P 500 with lower price-to-book
ratios. Results assume reinvestment of dividends.

- ----------
/1/ Source: Ibbotson Associates. Used with permission. All rights reserved.
Common stock returns are based on the Standard & Poor's 500 Stock Index, a
market-weighted, unmanaged index of 500 common stocks in a variety of industry
sectors. It is a commonly used indicator of broad stock price movements. This
chart is for illustrative purposes only and is not intended to represent the
performance of any particular investment or fund. Investors cannot invest
directly in an index. Past performance is not a guarantee of future results.

B-38
<PAGE>

APPENDIX I--GENERAL INVESTMENT INFORMATION

The following terms are used in mutual fund investing.

Asset Allocation

Asset allocation is a technique for reducing risk, providing balance. Asset
allocation among different types of securities within an overall investment
portfolio helps to reduce risk and to potentially provide stable returns,
while enabling investors to work toward their financial goal(s). Asset
allocation is also a strategy to gain exposure to better performing asset
classes while maintaining investment in other asset classes.

Diversification

Diversification is a time-honored technique for reducing risk, providing
"balance" to an overall portfolio and potentially achieving more stable
returns. Owning a portfolio of securities mitigates the individual risks (and
returns) of any one security. Additionally, diversification among types of
securities reduces the risks (and general returns) of any one type of
security.

Duration

Debt securities have varying levels of sensitivity to interest rates. As
interest rates fluctuate, the value of a bond (or a bond portfolio) will
increase or decrease. Longer term bonds are generally more sensitive to
changes in interest rates. When interest rates fall, bond prices generally
rise. Conversely, when interest rates rise, bond prices generally fall.

Duration is an approximation of the price sensitivity of a bond (or a bond
portfolio) to interest rate changes. It measures the weighted average maturity
of a bond's (or a bond portfolio's) cash flows, i.e., principal and interest
rate payments. Duration is expressed as a measure of time in years--the longer
the duration of a bond (or a bond portfolio), the greater the impact of
interest rate changes on the bond's (or the bond portfolio's) price. Duration
differs from effective maturity in that duration takes into account call
provisions, coupon rates and other factors. Duration measures interest rate
risk only and not other risks, such as credit risk and, in the case of non-
U.S. dollar denominated securities, currency risk. Effective maturity measures
the final maturity dates of a bond (or a bond portfolio).

Market Timing

Market timing--buying securities when prices are low and selling them when
prices are relatively higher--may not work for many investors because it is
impossible to predict with certainty how the price of a security will
fluctuate. However, owning a security for a long period of time may help
investors offset short-term price volatility and realize positive returns.

Power of Compounding

Over time, the compounding of returns can significantly impact investment
returns. Compounding is the effect of continuous investment on long-term
investment results, by which the proceeds of capital appreciation (and income
distributions, if elected) are reinvested to contribute to the overall growth
of assets. The long-term investment results of compounding may be greater than
that of an equivalent initial investment in which the proceeds of capital
appreciation and income distributions are taken in cash.

Standard Deviation

Standard deviation is an absolute (non-relative) measure of volatility
which, for a mutual fund, depicts how widely the returns varied over a certain
period of time. When a fund has a high standard deviation, its range of
performance has been very wide, implying greater volatility potential.
Standard deviation is only one of several measures of a fund's volatility.

I-1
<PAGE>

PART C

OTHER INFORMATION

Item 23. Exhibits.

(a)(1) Agreement and Declaration of Trust.*

(2) Certificate of Trust.*

(b) By-laws.**

(d) (1) Form of Management Agreement between the Registrant and
Prudential Investments Fund Management LLC.**

(2) Form of Sub-Management Agreement between Prudential Investments
Fund Management LLC and The Prudential Investment Corporation.**

(3) Form of Subadvisory Agreement between Prudential Investments Fund
Management LLC and Jennison Associates LLC.**

(4) Form of Subadvisory Agreement between Prudential Investments Fund
Management LLC and Alliance Capital Management L.P.**

(e) (1) Form of Distribution Agreement with Prudential Investment
Management Services LLC.**

(2) Form of Selected Dealer Agreement.**

(g) (1) Form of Custodian Contract between the Registrant and State
Street Bank and Trust Company.**

(2) Form of Amendment to Custodian Contract.**

(h) Form of Transfer Agency and Service Agreement between the Registrant
and Prudential Mutual Fund Services LLC.**

(i) Opinion and consent of Counsel.**

(j) Consent of independent accountants.**

(m) (1) Form of Distribution and Service Plan for Class A shares.**

(2) Form of Distribution and Service Plan for Class B shares.**

(3) Form of Distribution and Service Plan for Class C shares.**

(o) Form of Rule 18f-3 Plan.**

- ---------
* Filed herewith.
** To be filed by amendment

Item 24. Persons Controlled by or under Common Control with Registrant.

None.

Item 25. Indemnification.

As permitted by Sections 17(h) and (i) of the Investment Company Act of 1940
(the 1940 Act) and pursuant to Del. Code Ann. title 12 sec. 3817, a Delaware
business trust may provide in its governing instrument for the indemnification
of its officers and trustees from and against any and all claims and demands
whatsoever. Article VII, Section 2 of the Agreement and Declaration of Trust
(Exhibit a(1) to the Registration Statement) states that (1) the Registrant
shall indemnify any present trustee or officer to the fullest extent permitted
by law against liability, and all expenses reasonably incurred by him or her
in connection with any claim, action, suit or proceeding in which he or she is
involved by virtue of his or her service as a trustee, officer or both, and
against any amount incurred in the settlement thereof and (2) all persons
extending credit to, contracting with or having any claim against the

C-1
<PAGE>

Registrant shall look only to the assets of the appropriate Series (or if no
Series has yet been established, only to the assets of the Registrant).
Indemnification will not be provided to a person adjudged by a court or other
adjudicatory body to be liable to the Registrant or its shareholders by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of
his or her duties (collectively "disabling conduct".) In the event of a
settlement, no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the officer or
trustee did not engage in disabling conduct. In addition, Article XI of
Registrant's By-Laws (Exhibit (b) to the Registration statement) provides that
any trustee, officer, employee or other agent of Registrant shall be
indemnified by the Registrant against all liabilities and expenses subject to
certain limitations and exceptions contained in Article XI of the By-Laws. As
permitted by Section 17(i) of the 1940 Act, pursuant to Section 10 of the
Distribution Agreement (Exhibit e to the Registration Statement), the
Distributor of 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 (Securities Act) may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the foregoing provisions
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 1940 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 Trustee,
officer, or controlling person of the Registrant in connection with the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such Trustee, officer or controlling person 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 whether such indemnification by
it is against public policy as expressed in the 1940 Act and will be governed
by the final adjudication of such issue.

The Registrant will purchase an insurance policy insuring its officers and
Trustees against liabilities, and certain costs of defending claims against
such officers and Trustees, to the extent such officers and Trustees are not
found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of
indemnification payments to officers and Trustees under certain circumstances.

Section 9 of the Management Agreement (Exhibit d(1) to the Registration
Statement) and Section 4 of the Subadvisory Agreement (Exhibit d(2) to the
Registration Statement) limit the liability of Prudential Investments Fund
Management LLC (PIFM) and The Prudential Investment Corporation (PIC),
respectively, to liabilities arising from willful misfeasance, bad faith or
gross negligence in the performance of their respective duties or from
reckless disregard by them of their respective obligations and duties under
the agreements.

The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws and the Distribution Agreement in a manner
consistent with Release No. 11330 of the Securities and Exchange Commission
under the 1940 Act so long as the interpretation of Section 17(h) and 17(i) of
such Act remain in effect and are consistently applied.

Under Section 17(h) of the 1940 Act, it is the position of the staff of the
Securities and Exchange Commission that if there is neither a court
determination on the merits that the defendant is not liable nor a court
determination that the defendant was not guilty of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of one's office, no indemnification will be permitted unless an
independent legal counsel (not including a counsel who does work for either
the Registrant, its investment adviser, its principal underwriter or persons
affiliated with these persons) determines, based upon a review of the facts,
that the person in question was not guilty of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of his or her office.

Under its Declaration of Trust, the Registrant may advance funds to provide
for indemnification. Pursuant to the Securities and Exchange Commission
staff's position on Section 17(h) advances will be limited in the following
respect:

(1) Any advances must be limited to amounts used, or to be used, for the
preparation and/or presentation of a defense to the action (including
cost connected with preparation of a settlement);

(2) Any advances must be accompanied by a written promise by, or on behalf
of, the recipient to repay that amount of the advance which exceeds the
amount to which it is ultimately determined that he is entitled to
receive from the Registrant by reason of indemnification;

(3) Such promise must be secured by a surety bond or other suitable
insurance; and

(4) Such surety bond or other insurance must be paid for by the recipient
of such advance.

C-2
<PAGE>

Item 26. Business and Other Connections of Investment Adviser.

(a) Prudential Investments Fund Management LLC

See "How the Fund is Managed--Manager" in the Prospectus constituting Part A
of this Registration Statement and "Investment Advisory and Other Services" in
the Statement of Additional Information constituting Part B of this
Registration Statement.

The business and other connections of the officers of PIFM are listed in
Schedules A and D of Form ADV of PIFM as currently on file with the Securities
and Exchange Commission, the text of which is hereby incorporated by reference
(File No. 801-31104).

The business and other connections of PIFM's directors and principal
executive officers are set forth below. Except as otherwise indicated, the
address of each person is Gateway Center Three, 100 Mulberry Street, Newark,
NJ 07102-4077.

<TABLE>
<CAPTION>
Name and Address Position with PIFM Principal Occupations
---------------- ------------------ ---------------------
<C> <S> <C>
David R. Odenath, Jr. Officer in Charge, Officer in Charge, President, Chief Executive Officer
President, Chief and Chief Operating Officer, PIFM; Senior Vice
Executive Officer President, The Prudential Insurance Company of
and Chief Operating America (Prudential)
Officer
Robert F. Gunia Executive Vice Executive Vice President and Chief Administrative
President and Chief Officer, PIFM; Vice President, Prudential; President,
Administrative Prudential Investment Management Services LLC (PIMS)
Officer
William V. Healey Executive Vice Executive Vice President, Chief Legal Officer and
President, Chief Secretary, PIFM; Vice President and Associate General
Legal Officer and Counsel, Prudential; Senior Vice President, Chief
Secretary Legal Officer and Secretary, PIMS
Brian W. Henderson Executive Vice Executive Vice President, PIFM; Senior Vice President
President and Chief Operating Officer, PIMS
Stephen Pelletier Executive Vice Executive Vice President, PIFM
President
Judy A. Rice Executive Vice Executive Vice President, PIFM
President
Lynn M. Waldvogel Executive Vice Executive Vice President, PIFM
President

(b) The Prudential Investment Corporation (PIC)

See "How the Fund is Managed--Sub-Manager" in the Prospectus constituting
Part A of this Registration Statement and "Investment Advisory and Other
Services" in the Statement of Additional Information constituting Part B of
this Registration Statement.

The business and other connections of PIC's directors and executive officers
are as set forth below. Except as otherwise indicated, the address of each
person is Prudential Plaza, Newark, NJ 07102.

<CAPTION>
Name and Address Position with PIC Principal Occupations
---------------- ----------------- ---------------------
<C> <S> <C>
Jeffrey Hiller Chief Compliance Chief Compliance Officer, Prudential Global Asset
Officer Management
John R. Strangfeld, Jr. Chairman of the Board, President of Prudential Global Asset Management Group
President, Chief of Prudential; Senior Vice President, Prudential;
Executive Officer and Chairman of the Board, President, Chief Executive
Director Officer and Director, PIC
Bernard Winograd Senior Vice President Chief Executive Officer, Prudential Real Estate
and Investors; Senior Vice President and Director, PIC
Director
</TABLE>

See "How the Fund is Managed--Investment Advisers" in the Prospectus
constituting Part A of this Registration Statement and "Investment Advisory
and Other Services" in the Statement of Additional Information constituting
Part B of this Registration Statement.

The business and other connections of Jennison directors and executive
officers are listed in its Form ADV as currently on file with the Securities
and Exchange Commission (File No. 801-5608), the text of which is hereby
incorporated by reference.

(d) Alliance Capital Management L.P.

C-3
<PAGE>

The business and other connections of the director sand executive officers
of Alliance Capital Management Corporation, the general partner of Alliance
Capital Management L.P., are listed in its Form ADV as currently on file with
the Securities and Exchange Commission (File No. 801-32361), the text of which
is hereby incorporated by reference.

Item 27. Principal Underwriters.

(a) Prudential Investment Management Services LLC (PIMS)

PIMS is distributor for Cash Accumulation Trust, Command Government Fund,
Command Money Fund, Command Tax-Free Fund, Global Utility Fund, Inc.,
Nicholas-Applegate Fund, Inc. (Nicholas-Applegate Growth Equity Fund),
Prudential Balanced Fund, Prudential California Municipal Fund, Prudential
Diversified Bond Fund, Inc., Prudential Diversified Funds, Prudential Emerging
Growth Fund, Inc., Prudential Equity Fund, Inc., Prudential Equity Income
Fund, Prudential Europe Growth Fund, Inc., Prudential Global Genesis Fund,
Inc., Prudential Global Total Return Fund, Inc., Prudential Government Income
Fund, Inc., Prudential Government Securities Trust, Prudential High Yield
Fund, Inc., Prudential High Yield Total Return Fund, Inc., Prudential Index
Series Fund, Prudential Institutional Liquidity Portfolio, Inc., Prudential
International Bond Fund, Inc., Prudential Mid-Cap Value Fund, Prudential
MoneyMart Assets, Inc., Prudential Municipal Bond Fund, Prudential Municipal
Series Fund, Prudential National Municipals Fund, Inc., Prudential Natural
Resources Fund, Inc., Prudential Pacific Growth Fund, Inc., Prudential Real
Estate Securities Fund, Prudential Sector Funds, Inc., Prudential Small-Cap
Quantum Fund, Inc., Prudential Small Company Value Fund, Inc., Prudential
Special Money Market Fund, Inc., Prudential Structured Maturity Fund, Inc.,
Prudential 20/20 Focus Fund, Prudential Tax-Free Money Fund, Inc., Prudential
Tax-Managed Funds, Prudential World Fund, Inc., Target Funds, The Prudential
Investment Portfolios, Inc. and The Target Portfolio Trust.

(b) Information concerning the directors and officers of PIMS is set forth
below.

<TABLE>
<CAPTION>
Positions and Positions and
Offices with Offices with
Name(1) Underwriter Registrant
- ------- ------------- -------------
<S> <C> <C>
Margaret Deverell.. Vice President and Chief Financial Officer None
Robert F. Gunia.... President None
Kevin Frawley...... Senior Vice President and Compliance Officer None
213 Washington
Street
Newark, NJ 07102
William V. Healey.. Senior Vice President, Secretary and None
Chief Legal Officer
Brian W. Henderson. Senior Vice President and Officer None
John R. Strangfeld, Advisory Board Member None
Jr................
</TABLE>
- ---------
(/1/)The address of each person named is Prudential Plaza, 751 Broad Street,
Newark, New Jersey 07102 unless otherwise indicated.

Item 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules thereunder are maintained at the offices
of State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171; The Prudential Investment Corporation, Prudential Plaza,
745 Broad Street, Newark, New Jersey 07102; the Registrant, Gateway Center
Three, 100 Mulberry Street, Newark, New Jersey 07102-4077; Jennison Associates
LLC, 466 Lexington Avenue, New York, New York 10017; Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New York, 10105; and
Prudential Mutual Fund Services LLC, Raritan Plaza One, Edison, New Jersey
08837. Documents required by Rules 31a-1(b)(5), (6), (7), (9), (10) and (11)
and 31a-1(f) and Rules 31a-1(b)(4) and (11) and 31a-1(d) will be kept at
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, and
the remaining accounts, books and other documents required by such other
pertinent provisions of Section 31(a) and the Rules promulgated thereunder
will be kept by State Street Bank and Trust Company and Prudential Mutual Fund
Services LLC.

C-4
<PAGE>

Item 29. Management Services.

Other than as set forth under the captions "How the Fund is Managed--
Manager," "How the Fund is Managed-- Sub-Manager," "How the Fund is Managed--
Investment Advisers" and "How the Fund is Managed--Distributor" in the
Prospectus and the caption "Investment Advisory and Other Services" in the
Statement of Additional Information, constituting Parts A and B, respectively,
of this Registration Statement, Registrant is not a party to any management-
related service contract.

Item 30. Undertakings.

Not applicable.

C-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, duly authorized, in the City of
Newark, and State of New Jersey, on the 31st day of January, 2000.

STRATEGIC PARTNERS SERIES

/s/ Robert C. Rosselot
---------------------------------
(Robert C. Rosselot, President)

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Deborah A. Docs Trustee, Treasurer and Principal Financial January 31, 2000
- --------------------------------- and Accounting Officer
Deborah A. Docs
/s/ Robert C. Rosselot Trustee and President January 31, 2000
- ---------------------------------
Robert C. Rosselot
/s/ S. Jane Rose Trustee and Secretary January 31, 2000
- ---------------------------------
S. Jane Rose
</TABLE>

C-6
<PAGE>

STRATEGIC PARTNERS SERIES

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
(a)(1) Agreement and Declaration of Trust.*
(a)(2) Certificate of Trust.*
(b) By-laws.**
(c)
(c) Instruments Defining Rights of Shareholders.**
(d)(1) Form of Management Agreement between the Registrant and
Prudential Investments Fund Management LLC.**
(d)(2) Form of Sub-Management Agreement between Prudential Investments
Fund Management LLC and The Prudential Investment
Corporation.**
(d)(3) Form of Subadvisory Agreement between Prudential Investments
Fund Management LLC and Jennison Associates LLC.**
(d)(4) Form of Subadvisory Agreement between Prudential Investments
Fund Management LLC and Alliance Capital Management L.P.**
(e)(1) Form of Distribution Agreement with Prudential Investment
Management Services LLC.**
(e)(2) Form of Selected Dealer Agreement.**
(g)(1) Form of Custodian Contract between the Registrant and State
Street Bank and Trust Company.**
(g)(2) Form of Amendment to Custodian Contract.**
(h) Form of Transfer Agency and Service Agreement between the
Registrant and Prudential Mutual Fund Services LLC.**
(i) Opinion and consent of Counsel.**
(j) Consent of independent accountants.**
(m)(1) Form of Distribution and Service Plan for Class A shares.**
(m)(2) Form of Distribution and Service Plan for Class B shares.**
(m)(3) Form of Distribution and Service Plan for Class C shares.**
(o) Form of Rule 18f-3 Plan.**
</TABLE>

- ----------
*Filed herewith.
**To be filed by amendment.

<PAGE>

Exhibit (a)(1)

AGREEMENT AND DECLARATION OF TRUST

STRATEGIC PARTNERS SERIES
-------------------------

a Delaware Business Trust

Principal Place of Business:

Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
<PAGE>

TABLE OF CONTENTS

AGREEMENT AND DECLARATION OF TRUST

Page
----
ARTICLE I Name and Definitions.................................... 1
1. Name....................................................... 1
2. Definitions................................................ 1
(a) By-Laws............................................. 1
(b) Certificate of Trust................................ 1
(c) Class............................................... 2
(d) Commission and Principal Underwriter................ 2
(e) Declaration of Trust................................ 2
(f) Delaware Act........................................ 2
(g) Interested Person................................... 2
(h) Investment Manager or Manager....................... 2
(i) 1940 Act............................................ 2
(j) Person.............................................. 2
(k) Series.............................................. 2
(l) Shareholder......................................... 2
(m) Shares.............................................. 2
(n) Trust............................................... 2
(o) Trust Property...................................... 2
(p) Trustees............................................ 3

ARTICLE II Purpose of Trust....................................... 3

ARTICLE III Shares................................................ 3
1. Division of Beneficial Interest........................... 3
2. Ownership of Shares....................................... 4
3. Transfer of Shares........................................ 5
4. Investments in the Trust.................................. 5
5. Status of Shares and Limitations of
Personal Liability........................................ 5
6. Establishment and Designation of Series................... 5
(a) Assets Held with Respect to a
Particular Series.............................. 6
(b) Liabilities Held with Respect to a
Particular Series.............................. 7
(c) Dividends, Distributions, Redemptions
and Repurchases................................ 7
(d) Equality....................................... 7
(e) Fractions...................................... 8
(f) Exchange Privilege............................. 8
(g) Combination of Series.......................... 8
(h) Elimination of Series.......................... 8
7. Indemnification of Shareholders........................... 8

<PAGE>

ARTICLE IV The Board of Trustees.................................. 8
1. Number, Election and Tenure........................... 8
2. Effect of Death, Resignation, etc.
of a Trustee.......................................... 9
3. Powers................................................ 10
4. Payment of Expenses by the Trust...................... 14
5. Payment of Expenses by the Shareholders............... 14
6. Ownership of Assets of the Trust...................... 14
7. Service Contracts..................................... 15
8. Trustees and Officers as Shareholders................. 17

ARTICLE V Shareholders' Voting Powers and Meetings 17
1. Voting Powers, Meetings, Notice and
Record Dates.......................................... 17
2. Quorum and Required Vote.............................. 18
3. Record Dates.......................................... 18
4. Additional Provisions................................. 19

ARTICLE VI Net Asset Value, Distributions and Redemptions 19
1. Determination of Net Asset Value,
Net Income and Distributions.......................... 19
2. Redemptions and Repurchases........................... 19

ARTICLE VII Compensation and Limitation of Liability of Trustees 21
1. Compensation.......................................... 21
2. Indemnification and Limitation of
Liability............................................. 21
3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety............................. 22
4. Insurance............................................. 22

ARTICLE VIII Miscellaneous 22
1. Liability of Third Persons Dealing
with Trustees......................................... 22
2. Termination of Trust or Series........................ 23
3. Reorganization and Master/Feeder...................... 23
4. Amendments............................................ 25
5. Filing of Copies, References, Headings................ 25
6. Applicable Law........................................ 26
7. Provisions in Conflict with Law or Regulations........ 26
8. Business Trust Only................................... 27
9. Derivative Actions.................................... 27

<PAGE>

AGREEMENT AND DECLARATION OF TRUST

STRATEGIC PARTNERS SERIES

THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into as of the
date set forth below by the Trustees named hereunder for the purpose of forming
a Delaware business trust in accordance with the provisions hereinafter set
forth,

NOW, THEREFORE, the Trustees hereby direct that the Certificate of Trust be
filed with the Office of the Secretary of State of the State of Delaware and do
hereby declare that the Trustees will hold IN TRUST all cash, securities and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the benefit of the holders of Shares in this Trust.

ARTICLE I

Name and Definitions

Section 1. Name. This Trust shall be known as Strategic Partners Series and
the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.

Section 2. Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:

(a) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time, which By-Laws are expressly herein incorporated by reference as part of
the "governing instrument" within the meaning of the Delaware Act;

(b) "Certificate of Trust" means the certificate of trust, as amended or
restated from time to time, filed by the Trustees in the Office of the Secretary
of State of the State of Delaware in accordance with the Delaware Act;
<PAGE>

(c) "Class" means a class of Shares of a Series of the Trust established in
accordance with the provisions of Article III hereof;

(d) "Commission" and "Principal Underwriter" shall have the meanings given
them in the 1940 Act;

(e) "Declaration of Trust" means this Agreement and Declaration of Trust,
as amended or restated from time to time;

(f) "Delaware Act" means the Delaware Business Trust Act, 12 Del. C. ss.ss.
3801 et seq., as amended from time to time;

(g) "Interested Person" shall have the meaning given it in Section 2(a)
(19) of the 1940 Act;

(h) "Investment Manager" or "Manager" means a party furnishing services to
the Trust pursuant to any contract described in Article IV, Section 7(a) hereof;

(i) "1940 Act" means the Investment Company Act of 1940 and the Rules and
Regulations thereunder, all as amended from time to time;

(j) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates and other entities, whether or
not legal entities, and governments and agencies and political subdivisions
thereof, whether domestic or foreign;

(k) "Series" means each Series of Shares established and designated under
or in accordance with the provisions of Article III;

(l) "Shareholder" means a record owner of outstanding Shares;

(m) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;

(n) "Trust" means the Delaware Business Trust established under the
Delaware Act by this Declaration of Trust and the filing of the Certificate of
Trust in the Office of the Secretary of State of the State of Delaware;

(o) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is from time to time owned or held by or for the account of
the Trust; and

2
<PAGE>

(p) "Trustees" means the persons who have signed this Declaration of Trust
and all other Persons who may from time to time be duly elected or appointed to
serve as Trustees in accordance with the provisions hereof, in each case so long
as such Person shall continue in office in accordance with the terms of this
Declaration of Trust, and reference herein to a Trustee or the Trustees shall
refer to such Person or Persons in his or their capacity as trustees hereunder.

ARTICLE II

Purpose of Trust

The purpose of the Trust is to conduct, operate and carry on the business
of a management investment company registered under the 1940 Act through one or
more Series investing primarily in securities, and to carry on such other
business as the Trustees may from time to time determine pursuant to their
authority under this Declaration of Trust.

ARTICLE III

Section 1. Division of Beneficial Interest. The beneficial interest in the
Trust shall be divided into one or more Series. Each Series may be divided into
two or more Classes. Subject to the further provisions of this Article III and
any applicable requirements of the 1940 Act, the Trustees shall have full power
and authority, in their sole discretion, and without obtaining any authorization
or vote of the Shareholders of any Series or Class thereof, (i) to divide the
beneficial interest in each Series or Class thereof into Shares, with or without
par value as the Trustees shall determine, (ii) to issue Shares without
limitation as to number (including fractional Shares), to such Persons and for
such amount and type of consideration, subject to any restriction set forth in
the By-Laws, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, (iii) to establish and designate and
to change in any manner any Series or Class thereof and to fix such
preferences, voting powers, rights, duties and privileges and business purpose
of each Series or Class thereof as the Trustees may from time to time determine,
which preferences, voting powers, rights, duties and privileges may be senior or
subordinate to (or in the case of business purpose, different from) any existing
Series or Class thereof and may be limited to specified property or

3
<PAGE>

obligations of the Trust or profits and losses associated with specified
property or obligations of the Trust, (iv) to divide or combine the Shares of
any Series or Class thereof into a greater or lesser number without thereby
materially changing the proportionate beneficial interest of the Shares of such
Series or Class in the assets held with respect to that Series, (v) to classify
or reclassify any issued Shares of any Series or Class thereof into shares of
one or more Series or Classes thereof and (vi) to take such other action with
respect to the Shares as the Trustees may deem desirable.

Subject to the distinctions permitted among Classes of the same Series as
established by the Trustees consistent with the requirements of the 1940 Act,
each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series, and each holder of Shares of a Series shall be
entitled to receive such holder's pro rata share of distributions of income and
capital gains, if any, made with respect to such Series. Upon redemption of the
Shares of any Series, the applicable Shareholder shall be paid solely out of the
funds and property of such Series of the Trust.

All references to Shares in this Declaration of Trust shall be deemed to be
Shares of any or all Series or Classes thereof, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust and each Class thereof, except as the context otherwise requires.

All Shares issued hereunder, including, without limitation, Shares issued
in connection with a dividend in Shares or a split or reverse split of Shares,
shall be fully paid and non-assessable. Except as otherwise provided by the
Trustees, Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust.

Section 2. Ownership of Shares. The Ownership of Shares shall be recorded
on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series (or Class).
No certificates certifying the ownership of Shares shall be issued except as the
Board of Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the transfer of Shares of each Series (or Class) and similar
matters. The record books of the Trust as kept by the Trust or any transfer or
similar agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series (or Class) and as to the number of Shares of each
Series (or Class) held from time to time by each Shareholder.

4
<PAGE>

Section 3. Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his duly authorized agent upon delivery to the
Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery, and
subject to any further requirements specified by the Trustees or contained in
the By-Laws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares shall be deemed to
be the holder of such Shares for all purposes hereunder and neither the Trustees
nor the Trust, nor any transfer agent or registrar or any officer, employee or
agent of the Trust, shall be affected by any notice of a proposed transfer.

Section 4. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize.

Section 5. Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof. The death,
incapacity, dissolution, termination or bankruptcy of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust, nor entitle the
representative of any such Shareholder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but entitles such
representative only to the rights of such Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust Property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholders, nor, except as specifically provided herein, to
call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.

Section 6. Establishment and Designation of Series. The establishment and
designation of any Series (or Class) of Shares shall be effective upon the
adoption by a majority of the then Trustees of a

5
<PAGE>

resolution that sets forth such establishment and designation and the relative
rights and preferences of such Series (or Class), whether directly in such
resolution or by reference to another document including, without limitation,
any registration statement of the Trust, or as otherwise provided in such
resolution.

Shares of each Series (or Class) established pursuant to this Article III,
unless otherwise provided in the resolution establishing such Series, shall have
the following relative rights and preferences:

(a) Assets Held with Respect to a Particular Series. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors of such Series, and shall be so recorded upon the
books of account of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, from whatever source derived, including, without
limitation, any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds or payments which are not
readily identifiable as assets held with respect to any particular Series
(collectively "General Assets"), the Trustees shall allocate such General Assets
to, between or among any one or more of the Series in such manner and on such
basis as the Trustees, in their sole discretion, deem fair and equitable, and
any General Assets so allocated to a particular Series shall be held with
respect to that Series. Each such allocation by the Trustees shall be conclusive
and binding upon the Shareholders of all Series for all purposes. Separate and
distinct records shall be maintained for each Series and the assets held with
respect to each Series shall be held and accounted for separately from the
assets held with respect to all other Series and the General Assets of the Trust
not allocated to such Series.

6
<PAGE>

(b) Liabilities Held with Respect to a Particular Series. The assets of the
Trust held with respect to each particular Series shall be charged against the
liabilities of the Trust held with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series. Any general liabilities
of the Trust which are not readily identifiable as being held with respect to
any particular Series shall be allocated and charged by the Trustees to and
among any one or more of the Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. All liabilities,
expenses, costs, charges, and reserves so charged to a Series are herein
referred to as "liabilities held with respect to" that Series. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all purposes. All
liabilities held with respect to a particular Series shall be enforceable
against the assets held with respect to such Series only and not against the
assets of the Trust generally or against the assets held with respect to any
other Series. Notice of this contractual limitation on the liability of each
Series shall be set forth in the Certificate of Trust or in an amendment thereto
prior to the issuance of any Shares of a Series.

(c) Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution, including, without
limitation, any distribution paid upon termination of the Trust or of any Series
(or Class) with respect to, nor any redemption or repurchase of, the Shares of
any Series (or Class) shall be effected by the Trust other than from the assets
held with respect to such Series, nor shall any Shareholder of any particular
Series otherwise have any right or claim against the assets held with respect to
any other Series except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion, to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.

(d) Equality. All the Shares of each particular Series shall represent an
equal proportionate interest in the assets held with respect to that Series
(subject to the liabilities held with respect to that Series and such rights and
preferences as may have been established and designated with respect to

7
<PAGE>

Classes of Shares within such Series), and each Share of any particular Series
shall be equal to each other Share of that Series.

(e) Fractions. Any fractional Share of a Series shall carry proportionately
all the rights and obligations of a whole Share of that Series, including rights
with respect to voting, receipt of dividends and distributions, redemption of
Shares and termination of the Trust.

(f) Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any Series shall have the right to exchange said
Shares for Shares of one or more other Series of Shares in accordance with such
requirements and procedures as may be established by the Trustees.

(g) Combination of Series. The Trustees shall have the authority, without
the approval of the Shareholders of any Series unless otherwise required by
applicable law, to combine the assets and liabilities held with respect to any
two or more Series into assets and liabilities held with respect to a single
Series.

(h) Elimination of Series. At any time that there are no Shares outstanding
of any particular Series (or Class) previously established and designated, the
Trustees may by resolution of a majority of the then Trustees abolish that
Series (or Class) and rescind the establishment and designation thereof.

Section 7. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to such Person being or having been a Shareholder, and not because of
such Person's acts or omissions, the Shareholder or former Shareholder (or such
Person's heirs, executors, administrators, or other legal representatives or in
the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified out of the
assets of the Trust against all loss and expense arising from such claim or
demand, but only out of the assets held with respect to the particular Series of
Shares of which such Person is or was a Shareholder and from or in relation to
which such liability arose.

8
<PAGE>

ARTICLE IV

The Board of Trustees

Section 1. Number, Election and Tenure. The number of Trustees shall
initially be three, who shall be Deborah A. Docs, S. Jane Rose and Robert C.
Rosselot. Hereafter, the number of Trustees shall at all times be at least one
and no more than fifteen as determined, from time to time, by the Trustees
pursuant to Section 3 of this Article IV. Each Trustee shall serve during the
continued lifetime of the Trust until he or she dies, resigns, is declared
bankrupt or incompetent by a court of appropriate jurisdiction, or is removed,
or, if sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor. In the event that less than the majority of the Trustees holding
office have been elected by the Shareholders, the Trustees then in office shall
call a Shareholders' meeting for the election of Trustees. Any Trustee may
resign at any time by written instrument signed by him and delivered to any
officer of the Trust or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
Except to the extent expressly provided in a written agreement with the Trust,
no Trustee resigning and no Trustee removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal. The Shareholders may elect Trustees
at any meeting of Shareholders called by the Trustees for that purpose. Any
Trustee may be removed at any meeting of Shareholders by a vote of two-thirds of
the outstanding Shares of the Trust.

Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
declination to serve, resignation, retirement, removal, or incapacity of one or
more Trustees, or all of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration of Trust.
Whenever there shall be fewer than the designated number of Trustees, until
additional Trustees are elected or appointed as provided herein to bring the
total number of Trustees equal to the designated number, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by this Declaration
of Trust. As conclusive evidence of such vacancy, a written instrument
certifying the existence of such vacancy may be executed by an officer of the
Trust or by a majority of the Trustees. In the event of the death, declination,

9
<PAGE>

resignation, retirement, removal, or incapacity of all the then Trustees within
a short period of time and without the opportunity for at least one Trustee
being able to appoint additional Trustees to replace those no longer serving,
the Trust's Investment Manager(s) are empowered to appoint new Trustees subject
to the provisions of Section 16(a) of the 1940 Act.

Section 3. Powers. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Trustees, and the Trustees
shall have all powers necessary or convenient to carry out that responsibility
including the power to engage in securities transactions of all kinds on behalf
of the Trust. Without limiting the foregoing, the Trustees may: adopt By-Laws
not inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal them to the
extent that such By-Laws do not reserve that right to the Shareholders; enlarge
or reduce their number; remove any Trustee with or without cause at any time by
written instrument signed by at least two-thirds of the number of Trustees prior
to such removal, specifying the date when such removal shall become effective,
and fill vacancies caused by enlargement of their number or by the death,
resignation or removal of a Trustee; elect and remove, with or without cause,
such officers and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and terminate one or
more committees consisting of two or more Trustees which may exercise the powers
and authority of the Board of Trustees to the extent that the Trustees
determine; employ one or more custodians of the assets of the Trust and
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities or
with a Federal Reserve Bank; retain a transfer agent or a shareholder servicing
agent, or both; provide for the issuance and distribution of Shares by the Trust
directly or through one or more Principal Underwriters or otherwise; redeem,
repurchase and transfer Shares pursuant to applicable law; set record dates for
the determination of Shareholders with respect to various matters; declare and
pay dividends and distributions to Shareholders of each Series from the assets
of such Series; and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the Trustees and to
any agent or employee of the Trust or to any such custodian, transfer or
Shareholder servicing agent, or Principal Underwriter. Any determination as to
what is in the interests of the Trust made by the Trustees in good

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faith shall be conclusive. In construing the provisions of this Declaration of
Trust, the presumption shall be in favor of a grant of power to the Trustees.
Unless otherwise specified herein or in the By-Laws or required by law, any
action by the Trustees shall be deemed effective if approved or taken by a
majority of the Trustees present at a meeting of Trustees at which a quorum of
Trustees is present, within or without the State of Delaware.

Without limiting the foregoing, the Trustees shall have the power and
authority to cause the Trust (or to act on behalf of the Trust):

(a) To invest and reinvest cash, to hold cash uninvested, and to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge,
sell, assign, transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future acquisition or delivery
of fixed income or other securities, and securities of every nature and kind,
including, without limitation, all types of bonds, debentures, stocks,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, bankers' acceptances, and other securities of any kind,
issued, created, guaranteed, or sponsored by any and all Persons, including,
without limitation, states, territories, and possessions of the United States
and the District of Columbia and any political subdivision, agency, or
instrumentality thereof, any foreign government or any political subdivision of
the U.S. Government or any foreign government, or any international
instrumentality, or by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for any such
securities, to change the investments of the assets of the Trust; and to
exercise any and all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said instruments;

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<PAGE>

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write
options (including, options on futures contracts) with respect to or otherwise
deal in any property rights relating to any or all of the assets of the Trust or
any Series;

(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such Person or Persons as the Trustees shall
deem proper, granting to such Person or Persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;

(d) To exercise powers and right of subscription or otherwise which in any
manner arise out of ownership of securities;

(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own name or
in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;

(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;

(g) To join with other security holders in acting through a committee,
depository, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depository or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depository or trustee as the Trustees shall deem
proper;

(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including, but not limited to,
claims for taxes;

(i) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

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(j) To borrow funds or other property in the name of the Trust exclusively
for Trust purposes and in connection therewith issue notes or other evidence of
indebtedness; and to mortgage and pledge the Trust Property or any part thereof
to secure any or all of such indebtedness;

(k) To endorse or guarantee the payment of any notes or other obligations
of any Person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof; and to mortgage and pledge the Trust Property or
any part thereof to secure any of or all of such obligations;

(1) To purchase and pay for entirely out of Trust Property such insurance
as the Trustees may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, principal underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such Person as Trustee, officer, employee,
agent, investment adviser, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
Person against liability;

(m) To adopt, establish and carry out pension, profit-sharing, share bonus,
share purchase, savings, thrift and other retirement, incentive and benefit
plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;

(n) To operate as and carry out the business of an investment company, and
exercise all the powers necessary or appropriate to the conduct of such
operations;

(o) To enter into contracts of any kind and description;

(p) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Declaration or Trust or in the By-Laws;

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<PAGE>

(q) To interpret the investment policies, practices or limitations of any
Series or Class; and

(r) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act (including investment by means of transfer of part
or all of the Trust Property in exchange for an interest or interests in such
one or more investment companies) all without any requirement of approval by
Shareholders unless required by the 1940 Act. Any such other investment company
may (but need not) be a trust (formed under the laws of the State of Delaware or
of any other state) which is classified as a partnership for federal income tax
purposes.

(s) Subject to the 1940 Act, to engage in any other lawful act or activity
in which a business trust organized under the Delaware Act may engage.

The Trust shall not be limited to investing in obligations maturing before
the possible termination of the Trust or one or more of its Series. The Trust
shall not in any way be bound or limited by any present or future law or custom
in regard to investment by fiduciaries. The Trust shall not be required to
obtain any court order to deal with any assets of the Trust or take any other
action hereunder.

Section 4. Payment of Expenses by the Trust. The Trustees are authorized to
pay or cause to be paid out of the principal or income of the Trust, or partly
out of the principal and partly out of income, as they deem fair, all expenses,
fees, charges, taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including, but not limited
to, the Trustees compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or manager, Principal
Underwriter, auditors, counsel, custodian, transfer agent, shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Trustees may deem necessary or proper to incur, which
expenses, fees, charges, taxes and liabilities shall be allocated in accordance
with Article III, Section 6 hereof.

Section 5. Payment of Expenses by Shareholders. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series,

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to pay directly, in advance or arrears, for charges of the Trust's custodian or
transfer, Shareholder servicing or similar agent, an amount fixed from time to
time by the Trustees, by setting off such charges due from such Shareholder from
declared but unpaid dividends owed such Shareholder and/or by reducing the
number of Shares in the account of such Shareholder by that number of full
and/or fractional Shares which represents the outstanding amount of such charges
due from such Shareholder.

Section 6. Ownership of Assets of the Trust. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trust, except that
the Trustees shall have power to cause legal title to any Trust Property to be
held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. Upon the resignation, removal or death of a Trustee, he or she shall
automatically cease to have any right, title or interest in any of the Trust
Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.

Section 7. Service Contracts

(a) Subject to such requirements and restrictions as may be set forth under
federal and/or state law and in the By-Laws, including, without limitation, the
requirements of Section 15 of the 1940 Act, the Trustees may, at any time and
from time to time, contract for exclusive or nonexclusive advisory, management
and/or administrative services for the Trust or for any Series (or Class
thereof) with any corporation, trust, association or other organization; and any
such contract may contain such other terms as the Trustees may determine,
including, without limitation, authority for the Investment Manager or
administrator to delegate certain or all of its duties under such contracts to
qualified investment advisers and administrators and to determine from time to
time without prior consultation with the Trustees what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to such
party.

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(b) The Trustees may also, at any time and from time to time, contract with
any corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or Principal Underwriter for the Shares of
one or more of the Series (or Classes) or other securities to be issued by the
Trust. Every such contract shall comply with such requirements and restrictions
as may be set forth under federal and/or state law and in the By-Laws,
including, without limitation, the requirements of Section 15 of the 1940 Act;
and any such contract may contain such other terms as the Trustees may
determine.

(c) The Trustees are also empowered, at any time and from time to time, to
contract with any corporations, trusts, associations or other organizations,
appointing it or them the custodian, transfer agent and/or Shareholder servicing
agent for the Trust or one or more of its Series. Every such contract shall
comply with such requirements and restrictions as may be set forth under federal
and/or state law and in the By-Laws or stipulated by resolution of the Trustees.

(d) Subject to applicable law, the Trustees are further empowered, at any
time and from time to time, to contract with any entity to provide such other
services to the Trust or one or more of the Series, as the Trustees determine to
be in the best interests of the Trust and the applicable Series.

(e) The fact that:

(i) any of the Shareholders, Trustees, or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, Manager,
adviser, Principal Underwriter, distributor, or affiliate or agent of or
for any corporation, trust, association, or other organization, or for any
parent or affiliate of any organization with which an advisory, management
or administration contract, or principal underwriter's or distributor's
contract, or transfer, shareholder servicing or other type of service
contract may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder or has
an interest in the Trust, or that

(ii) any corporation, trust, association or other organization with
which an advisory, management or administration contract or principal
underwriter's or distributor's contract, or transfer, shareholder servicing
or other type of service contract may have been or may hereafter

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<PAGE>

be made also has an advisory, management or administration contract, or
principal underwriter's or distributor's contract, or transfer, shareholder
servicing or other service contract with one or more other corporations,
trusts, associations, or other organizations, or has other business or
interests, shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon or
executing the same, or create any liability or accountability to the Trust
or its Shareholders, provided approval of each such contract is made
pursuant to the requirements of the 1940 Act.

Section 8. Trustees and Officers as Shareholders. Any Trustee, officer or
agent of the Trust may acquire, own and dispose of Shares to the same extent as
if he were not a Trustee, officer or agent; and the Trustees may issue and sell
and cause to be issued and sold Shares to, and redeem such Shares from, any such
Person or any firm or company in which such Person is interested, subject only
to the general limitations contained herein or in the By-Laws relating to the
sale and redemption of such Shares.

ARTICLE V

Shareholders' Voting Powers and Meetings

Section 1. Voting Powers, Meetings, Notice and Record Dates. The
Shareholders shall have power to vote only (i) for the election or removal of
Trustees as provided in Article IV, Section 1, and (ii) with respect to such
additional matters relating to the Trust as may be required by applicable law,
this Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. As determined by the Trustees without the vote
or consent of Shareholders (except as required by the 1940 Act), on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of Net Asset Value (number of Shares owned times Net Asset Value per
share of such Series or Class, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
the power of the Trustees in any way to designate otherwise in accordance with
the preceding sentence, the Trustees hereby establish that each whole Share
shall be entitled to one vote as to

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any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. Notwithstanding any other provision
of this Declaration of Trust, on any matter submitted to a vote of the
Shareholders, all Shares of the Trust then entitled to vote shall be voted in
aggregate, except (i) when required by the 1940 Act, Shares shall be voted by
individual Series; (ii) when the matter involves the termination of a Series or
any other action that the Trustees have determined will affect only the
interests of one or more Series, then only Shareholders of such Series shall be
entitled to vote thereon; and (iii) when the matter involves any action that the
Trustees have determined will affect only the interests of one or more Classes,
then only the Shareholders of such Class or Classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy. A proxy may be given in writing. The By-Laws
may provide that proxies may also, or may instead, be given by any electronic or
telecommunications device or in any other manner. Notwithstanding anything else
contained herein or in the By-Laws, in the event a proposal by anyone other than
the officers or Trustees of the Trust is submitted to a vote of the shareholders
of one or more Series or Classes thereof or of the Trust, or in the event of any
proxy contest or proxy solicitation or proposal in opposition to any proposal by
the officers or Trustees of the Trust, Shares may be voted only in person or by
written proxy at a meeting. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration of Trust or the By-Laws to be taken by the Shareholders. Meetings of
the Shareholders shall be called and notice thereof and record dates therefor
shall be given and set as provided in the By-Laws.

Section 2. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
forty percent (40%) of the Shares entitled to vote shall constitute a quorum at
a Shareholders' meeting. When any one or more Series (or Classes) is to vote as
a single Class separate from any other Shares, forty percent (40%) of the Shares
of each such Series (or Classes) entitled to vote shall constitute a quorum at a
Shareholders' meeting of that Series (or Class). Except when a larger vote is
required by any provision of this Declaration of Trust or the By-Laws or by
applicable law, when a quorum is present at any meeting, a majority of the
Shares voted shall decide any questions and a plurality of the Shares voted
shall elect a Trustee, provided that where any provision of

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<PAGE>

law or of this Declaration of Trust requires that the holders of any Series
shall vote as a Series (or that holders of a Class shall vote as a Class), then
a majority of the Shares of that Series (or Class) voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide that matter
insofar as that Series (or Class) is concerned.

Section 3. Record Dates. For the purpose of determining the Shareholders of
any Series (or Class) who are entitled to receive payment of any dividend or of
any other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other payment,
as the record date for determining the Shareholders of such Series (or Class)
having the right to receive such dividend or distribution. Without fixing a
record date, the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) at any time prior to the
payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
(or Classes).

Section 4. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.

ARTICLE VI

Net Asset Value, Distributions and Redemptions

Section 1. Determination of Net Asset Value, Net Income, and Distributions.
Subject to applicable law and Article III, Section 6 hereof, the Trustees, in
their absolute discretion, may prescribe and shall set forth in the By-Laws or
in a duly adopted vote of the Trustees such bases and time for determining the
per Share or net asset value of the Shares of any Series or net income
attributable to the Shares of any Series, or the declaration and payment of
dividends and distributions on the Shares of any Series, as they may deem
necessary or desirable.

Section 2. Redemptions and Repurchases.

(a) The Trust shall purchase such Shares as are offered by any Shareholder
for redemption, upon the presentation of a proper instrument of transfer
together with a request directed to the Trust or a Person designated by the
Trust that the Trust purchase such Shares or in accordance with such other
procedures for redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net

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<PAGE>

asset value thereof as determined by the Trustees (or on their behalf), in
accordance with any applicable provisions of the By-Laws and applicable law.
Unless extraordinary circumstances exist, payment for said Shares shall be made
by the Trust to the Shareholder within seven (7) days after the date on which
the request is made in proper form. The obligation set forth in this Section 2
is subject to the provision that in the event that any time the New York Stock
Exchange (the "Exchange") is closed for other than weekends or holidays, or if
permitted by the rules and regulations or an order of the Commission during
periods when trading on the Exchange is restricted or during any emergency which
makes it impracticable for the Trust to dispose of the investments of the
applicable Series or to determine fairly the value of the net assets held with
respect to such Series or during any other period permitted by order of the
Commission for the protection of investors, such obligations may be suspended or
postponed by the Trustees. In the case of a suspension of the right of
redemption as provided herein, a Shareholder may either withdraw the request for
redemption or receive payment based on the net asset value per share next
determined after the termination of such suspension.

(b) The redemption price may in any case or cases be paid wholly or partly
in kind if the Trustees determine that such payment is advisable in the interest
of the remaining Shareholders of the Series for which the Shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any corporation or other Person
in transferring securities selected for delivery as all or part of any payment
in kind.

(c) The Trustees may require Shareholders to redeem Shares for any reason
under terms set by the Trustees, including, but not limited to, (i) the
determination of the Trustees that direct or indirect ownership of Shares of any
Series has or may become concentrated in such Shareholder to an extent that
would disqualify any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute thereto), (ii) the
failure of a Shareholder to supply a tax identification number if required to do
so, or to have the minimum investment required (which may vary by Series), or
(iii) the failure of a Shareholder to pay when due for the purchase of Shares
issued to him.

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<PAGE>

Any such redemption shall be effected at the redemption price and in the manner
provided in this Article VI.

(d) The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code of 1986, as amended (or any successor statute thereto), or to
comply with the requirements of any other taxing authority.

ARTICLE VII

Compensation and Limitation of
Liability of Trustees

Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.

Section 2. Indemnification and Limitation of Liability. A Trustee, when
acting in such capacity, shall not be personally liable to any Person, other
than the Trust or a Shareholder to the extent provided in this Article VII, for
any act, omission or obligation of the Trust, of such Trustee or of any other
Trustee. The Trustees shall not be responsible or liable in any event for any
neglect or wrongdoing of any officer, agent, employee, Manager or Principal
Underwriter of the Trust. The Trust shall indemnify each Person who is, or has
been, a Trustee, officer, employee or agent of the Trust and any Person who is
serving or has served at the Trust's request as a director, officer, trustee,
employee or agent of another organization in which the Trust has any interest as
a shareholder, creditor or otherwise to the extent and in the manner provided in
the By-Laws.

All persons extending credit to, contracting with or having any claim
against the Trust or the Trustees shall look only to the assets of the
appropriate Series, or, if the Trustees have yet to establish Series, of the
Trust for payment under such credit, contract or claim; and neither the Trustees
nor the

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<PAGE>

Shareholders, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor.

Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees by any of them in connection with the Trust shall
conclusively be deemed to have been executed or done only in or with respect to
his or their capacity as Trustee or Trustees, and such Trustee or Trustees shall
not be personally liable thereon. At the Trustees' discretion, any note, bond,
contract, instrument, certificate or undertaking made or issued by the Trustees
or by any officer or officers may give notice that the Certificate of Trust is
on file in the Office of the Secretary of State of the State of Delaware and
that a limitation on liability of Series exists and such note, bond, contract,
instrument, certificate or undertaking may, if the Trustees so determine, recite
that the same was executed or made on behalf of the Trust by a Trustee or
Trustees in such capacity and not individually or by an officer or officers in
such capacity and not individually and that the obligations of such instrument
are not binding upon any of them or the Shareholders individually but are
binding only on the assets and property of the Trust or a Series thereof, and
may contain such further recital as such Person or Persons may deem appropriate.
The omission of any such notice or recital shall in no way operate to bind any
Trustees, officers or Shareholders individually.

Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable to the Trust and to
any Shareholder solely for his or her own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice nor
for failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.

Section 4. Insurance. The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee, officer, employee or agent of the Trust in connection with
any

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<PAGE>

claim, action, suit or proceeding in which he or she becomes involved by virtue
of his or her capacity or former capacity with the Trust.

ARTICLE VIII

Miscellaneous

Section 1. Liability of Third Persons Dealing with Trustees. No Person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.

Section 2. Termination of Trust or Series.

(a) Unless terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by vote of a
majority of the Shares of each Series entitled to vote, voting separately by
Series, or by the Trustees by written notice to the Shareholders. Any Series of
Shares or Class thereof may be terminated at any time by vote of a majority of
the Shares of such Series or Class entitled to vote or by the Trustees by
written notice to the Shareholders of such Series or Class.

(b) Upon the requisite Shareholder vote or action by the Trustees to
terminate the Trust or any one or more Series of Shares or any Class thereof,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular Series or any Class thereof as may be determined by the Trustees, the
Trust shall in accordance with such procedures as the Trustees consider
appropriate reduce the remaining assets of the Trust or of the affected Series
or Class to distributable form in cash or Shares (if any Series remain) or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the Series or Classes involved, ratably according to the number
of Shares of such Series or Class held by the several Shareholders of such
Series or Class on the date of distribution. Thereupon, the Trust or any
affected Series or Class shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties relating thereto or
arising therefrom, and the right, title and interest of all parties with respect
to the Trust or such Series or Class shall be canceled and discharged.

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<PAGE>

(c) Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's Certificate of Trust to be filed in accordance with the Delaware Act,
which certificate of cancellation may be signed by any one Trustee.

Section 3. Reorganization and Master/Feeder

(a) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more trusts (or
series thereof to the extent permitted by law), partnerships, associations,
corporations or other business entities (including trusts, partnerships,
associations, corporations or other business entities created by the Trustees to
accomplish such merger or consolidation) so long as the surviving or resulting
entity is an open-end management investment company under the 1940 Act, or is a
series thereof, that will succeed to or assume the Trust's registration under
the 1940 Act and that is formed, organized or existing under the laws of the
United States or of a state, commonwealth, possession or colony of the United
States, (ii) cause the Shares to be exchanged under or pursuant to any state or
federal statute to the extent permitted by law or (iii) cause the Trust to
incorporate under the laws of Delaware. Any agreement of merger or consolidation
or exchange or certificate of merger may be signed by a majority of the Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.

(b) Pursuant to and in accordance with the provisions of Section 3815(f) of
the Delaware Act, and notwithstanding anything to the contrary contained in this
Declaration of Trust, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 3 may effect any amendment to the
governing instrument of the Trust or effect the adoption of a new trust
instrument of the Trust if the Trust is the surviving or resulting trust in the
merger or consolidation.

(c) The Trustees may create one or more business trusts to which all or any
part of the assets, liabilities, profits or losses of the Trust or any Series or
class thereof may be transferred and may provide for the conversion of Shares in
the Trust or any Series or Class thereof into beneficial interests in any such
newly created trust or trusts or any series or classes thereof.

24
<PAGE>

(d) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval, invest all or a portion of the Trust Property of any
Series, or dispose of all or a portion of the Trust Property of any Series, and
invest the proceeds of such disposition in interests issued by one or more other
investment companies registered under the 1940 Act. Any such other investment
company may (but need not) be a trust (formed under the laws of the State of
Delaware or any other state or jurisdiction) (or subtrust thereof) which is
classified as a partnership for federal income tax purposes. Notwithstanding
anything else herein, the Trustees may, without Shareholder approval unless such
approval is required by applicable law, cause a Series that is organized in the
master/feeder fund structure to withdraw or redeem its Trust Property from the
master fund and cause such series to invest its Trust Property directly in
securities and other financial instruments or in another master fund.

Section 4. Amendments. Except as specifically provided in this Section, the
Trustees may, without Shareholder vote, restate, amend or otherwise supplement
this Declaration of Trust. Shareholders shall have the right to vote (i) on any
amendment that would affect their right to vote granted in Article V, Section 1
hereof, (ii) on any amendment to this Section 4 of Article VIII, (iii) on any
amendment that may be required by applicable law or by the Trust's registration
statement filed with the Commission and (iv) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to the
Shareholders that, as the Trustees determine, shall affect the Shareholders of
one or more Series shall be authorized by a vote of the Shareholders of each
Series affected and no vote of Shareholders of a Series not affected shall be
required. Notwithstanding anything else herein, no amendment hereof shall limit
the rights to insurance provided by Article VII, Section 4 with respect to any
acts or omissions of Persons covered thereby prior to such amendment nor shall
any such amendment limit the rights to indemnification referenced in Article
VII, Section 2 hereof as provided in the By-Laws with respect to any actions or
omissions of Persons covered thereby prior to such amendment. The Trustees may,
without Shareholder vote, restate, amend, or otherwise supplement the
Certificate of Trust as they deem necessary or desirable.

Section 5. Filing of Copies, References, Headings. The original or a copy
of this instrument and of each restatement and/or amendment hereto shall be kept
at the office of the Trust where it may be

25
<PAGE>

inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such restatements and/or amendments. In this
instrument and in any such restatements and/or amendments, references to this
instrument, and all expressions such as "herein", "hereof" and "hereunder",
shall be deemed to refer to this instrument as amended or affected by any such
restatements and/or amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. Whenever the singular number
is used herein, the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.

Section 6. Applicable Law.

(a) The Trust is created under, and this Declaration of Trust is to be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware. The Trust shall be of the type commonly called a business
trust, and without limiting the provisions hereof, the Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
business trusts or actions that may be engaged in by business trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.

(b) Notwithstanding the first sentence of Section 6(a) of this Article
VIII, there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (x) the provisions of Section 3540 of Title 12 of the
Delaware Code or (y) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts that relate
to or regulate: (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (iii) the necessity for obtaining a court or other governmental approval
concerning the acquisition, holding or disposition of

26
<PAGE>

real or personal property, (iv) fees or other sums applicable to trustees,
officers, agents or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations on the
permissible nature, amount or concentration of trust investments or requirements
relating to the titling, storage or other manner of holding of trust assets, or
(vii) the establishment of fiduciary or other standards or responsibilities or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees set forth
or referenced in this Declaration of Trust.

Section 7. Provisions in Conflict with Law or Regulations.

(a) The provisions of the Declaration of Trust are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such provision
is in conflict with the 1940 Act, the regulated investment company provisions of
the Internal Revenue Code of 1986, as amended (or any successor statute
thereto), and the regulations thereunder, the Delaware Act or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of the Declaration of Trust; provided, however, that
such determination shall not affect any of the remaining provisions of the
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.

(b) If any provision of the Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration of Trust in any jurisdiction.

Section 8. Business Trust Only. It is the intention of the Trustees to
create a business trust pursuant to the Delaware Act. It is not the intention of
the Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to the Delaware Act. Nothing in this Declaration of
Trust shall be construed to make the Shareholders, either by themselves or with
the Trustees, partners or members of a joint stock association.

27
<PAGE>

Section 9. Derivative Actions. In addition to the requirements set forth
in Section 3816 of the Delaware Act, a Shareholder may bring a derivative action
on behalf of the Trust only if the following conditions are met:

(a) The Shareholder or Shareholders must make a pre-suit demand upon the
Trustees to bring the subject action unless an effort to cause the Trustees to
bring such an action is not likely to succeed. For purposes of this Section
9(a), a demand on the Trustees shall only be deemed not likely to succeed and
therefore excused if a majority of the Board of Trustees, or a majority of any
committee established to consider the merits of such action, has a personal
financial interest in the transaction at issue, and a Trustee shall not be
deemed interested in a transaction or otherwise disqualified from ruling on the
merits of a Shareholder demand by virtue of the fact that such Trustee receives
remuneration for his service on the Board of Trustees of the Trust or on the
boards of one or more Trusts that are under common management with or otherwise
affiliated with the Trust.

(b) Unless a demand is not required under paragraph (a) of this Section 9,
Shareholders eligible to bring such derivative action under the Delaware Act who
hold at least 10% of the Outstanding Shares of the Trust, or 10% of the
Outstanding Shares of the Series or Class to which such action relates, shall
join in the request for the Trustees to commence such action; and

(c) Unless a demand is not required under paragraph (a) of this Section 9,
the Trustees must be afforded a reasonable amount of time to consider such
shareholder request and to investigate the basis of such claim. The Trustees
shall be entitled to retain counsel or other advisors in considering the merits
of the request and shall require an undertaking by the Shareholders making such
request to reimburse the Trust for the expense of any such advisors in the event
that the Trustees determine not to bring such action.

For purposes of this Section 9, the Board of Trustees may designate a
committee of one Trustee to consider a Shareholder demand if necessary to create
a committee with a majority of Trustees who do not have a personal financial
interest in the transaction at issue. The Trustees shall be entitled to retain
counsel or other advisors in considering the merits of the request and shall
require an undertaking by the

28
<PAGE>

Shareholders making such request to reimburse the Trust for the expense of any
such advisors in the event that the Trustees determine not to bring such action.

IN WITNESS WHEREOF, the Trustees named below does hereby make and enter
into this Declaration of Trust as of the 26th day of January, 2000.

/s/ Deborah A. Docs
- -------------------
Deborah A. Docs

/s/ S. Jane Rose
- ----------------
S. Jane Rose

/s/ Robert C. Rosselot
- ----------------------
Robert C. Rosselot

THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:

Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077

<PAGE>

Exhibit (a)(2)

CERTIFICATE OF TRUST
--------------------

This Certificate of Trust of Strategic Partners Series (the "Trust"),
dated January 26, 2000, is being duly executed and filed to form a business
trust under the Delaware Business Trust Act (12 Del. C. SS 3801 et seq.).
---- -- -- ----

1. Name. The name of the business trust formed hereby is Strategic
----
Partners Series.

2. Registered Agent. The business address of the registered office
----------------
of the Trust in the State of Delaware is Corporation Trust Center, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801. The name of the Trust's
registered agent at such address is The Corporation Trust Company.

3. Effective Date. This Certificate of Trust shall be effective
--------------
upon the date and time of filing.

4. Series Trust. Notice is hereby given that pursuant to Section
------------
3804 of the Delaware Business Trust Act, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series of the Trust shall be enforceable against the assets of such
series only and not against the assets of the Trust generally or any other
series thereof and, unless otherwise provided in the governing instrument of the
Trust, none of the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to the Trust generally or any
other series thereof shall be enforceable against the assets of such series. The
Trust is, or will become prior to or within 180 days following the first
issuance of beneficial interests therein, a registered investment company under
the Investment Company Act of 1940, as amended.
<PAGE>

IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.

/s/ Deborah A. Docs
-------------------
Name: Deborah A. Docs
as Trustee and not individually

/s/ S. Jane Rose
----------------
Name: S. Jane Rose
as Trustee and not individually

/s/ Robert C. Rosselot
----------------------
Name: Robert C. Rosselot
as Trustee and not individually