As filed with the Securities and Exchange Commission
on February 17, 1994
Registration No. 2-55301
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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. 28 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 19 /X/
(Check appropriate box or boxes)
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PRUDENTIAL-BACHE MONEYMART ASSETS INC.
(Exact name of registrant as specified in charter)
ONE SEAPORT PLAZA,
NEW YORK, NEW YORK 10292
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 214-1250
S. Jane Rose, Esq.
One Seaport Plaza
New York, New York 10292
(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.
It is proposed that this filing will become effective
(check appropriate box):
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a), of Rule 485.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
has previously registered an indefinite number of shares of beneficial interest,
par value $.01 per share. The Registrant intends to file a notice under such
Rule for its fiscal year ended December 31, 1993 on or before February 28, 1994.
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<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
<TABLE>
<CAPTION>
N-1A Item No. Location
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<C> <C> <S> <C>
Part A
Item 1. Cover Page.................................................. Cover Page
Item 2. Synopsis.................................................... Fund Expenses
Item 3. Condensed Financial Information............................. Fund Expenses; Financial
Highlights; Calculation of
Yield
Item 4. General Description of Registrant........................... Cover Page; How the Fund
Invests; General Information
Item 5. Management of the Fund...................................... Financial Highlights; How the
Fund is Managed; General
Information
Item 6. Capital Stock and Other Securities.......................... Taxes, Dividends and
Distributions; General
Information
Item 7. Purchase of Securities Being Offered........................ How the Fund is Managed; How
the Fund Values Its Shares
Item 8. Redemption or Repurchase.................................... How the Fund is Managed;
General Information
Item 9. Pending Legal Proceedings................................... Not Applicable
Part B
Item 10. Cover Page.................................................. Cover Page
Item 11. Table of Contents........................................... Table of Contents
Item 12. General Information and History............................. General Information and
History
Item 13. Investment Objectives and Policies.......................... Investment Objective and
Policies; Investment
Restrictions
Item 14. Management of the Fund...................................... Directors and Officers;
Manager; Distributor
Item 15. Control Persons and Principal Holders of Securities......... Not Applicable
Item 16. Investment Advisory and Other Services...................... Manager; Distributor;
Custodian, Transfer and
Dividend Disbursing Agent and
Independent Accountants
Item 17. Brokerage Allocation and Other Practices.................... Portfolio Transactions
Item 18. Capital Stock and Other Securities.......................... Not Applicable
Item 19. Purchase, Redemption and Pricing of Securities Being Purchase and Redemption of
Offered..................................................... Fund Shares; Shareholder
Investment Account
Item 20. Tax Status.................................................. Taxes
Item 21. Underwriters................................................ Distributor
Item 22. Calculation of Performance Data............................. Calculation of Yield
Item 23. Financial Statements........................................ Financial Statements
Part C
Information required to be included in Part C is set forth under the appropriate Item, so
numbered, in Part C to this Post-Effective Amendment to the Registration Statement.
</TABLE>
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Prudential MoneyMart Assets
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Prospectus dated February 16, 1994
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Prudential-Bache MoneyMart Assets Inc., doing business as Prudential MoneyMart
Assets (the Fund), is an open-end, diversified, management investment company,
or mutual fund. Its investment objective is maximum current income consistent
with stability of capital and the maintenance of liquidity. The Fund seeks to
achieve this objective by investing primarily in a portfolio of money market
instruments maturing in thirteen months or less. See "How the Fund
Invests--Investment Objective and Policies."
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to
maintain a stable net asset value of $1.00 per share. See "How the Fund Values
Its Shares."
The Fund's address is One Seaport Plaza, New York, New York 10292, and its
telephone number is (800) 225-1852.
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This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated February 16, 1994, which
information is incorporated herein by reference (is legally considered a part
of this Prospectus) and is available without charge upon request to the Fund
at the address or telephone number noted above.
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Investors are advised to read this Prospectus and retain it for future
reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.<PAGE>
<PAGE>
FUND HIGHLIGHTS
What is Prudential MoneyMart Assets?
Prudential MoneyMart Assets is a mutual fund. A mutual fund pools the
resources of investors by selling its shares to the public and investing the
proceeds of such sale in a portfolio of securities designed to achieve its
investment objective. Technically, the Fund is an open-end, diversified
management investment company.
What Is the Fund's Investment Objective?
The Fund's investment objective is maximum current income consistent with
stability of capital and the maintenance of liquidity. The Fund invests
primarily in a portfolio of money market instruments maturing in thirteen
months or less. See "How the Fund Invests--Investment Objective and Policies"
at page 6.
What Are the Fund's Special Characteristics and Risks?
It is anticipated that the net asset value (NAV) of the Fund will remain
constant at $1.00 per share, although this cannot be assured. In order to
maintain such constant net asset value, the Fund will value its portfolio
securities at amortized cost. While this method provides certainty in
valuation, it may result in periods during which the value of a security in
the Fund's portfolio, as determined by amortized cost, is higher or lower than
the price the Fund would receive if it sold such security. See "How the Fund
Values Its Shares" at page 11.
Who Manages the Fund?
Prudential Mutual Fund Management, Inc. (PMF or the Manager) is the
Manager of the Fund and is compensated for its services at an annual rate of
.50 of 1% of the Fund's average daily net assets up to $50 million and .30 of
1% of the Fund's average daily net assets in excess of $50 million. As of
January 31, 1994, PMF served as manager or administrator to 66 investment
companies, including 37 mutual funds, with aggregate assets of approximately
$51 billion. The Prudential Investment Corporation (PIC or the Subadviser)
furnishes investment advisory services in connection with the management of
the Fund under a Subadvisory Agreement with PMF. See "How the Fund Is
Managed--Manager" at page 9.
Who Distributes the Fund's Shares?
Prudential Mutual Fund Distributors, Inc. (PMFD) acts as the Distributor
of the Fund's shares. The Fund reimburses PMFD for expenses related to the
distribution of the Fund's shares at an annual rate of up to .125 of 1% of the
average daily net assets of the Fund. See "How the Fund Is
Managed--Distributor" at page 9.
What Is the Minimum Investment?
The minimum initial investment is $1,000. Thereafter, the minimum
investment is $100. There is no minimum investment requirement for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. For purchases made through the Automatic Savings Accumulation Plan,
the minimum initial and subsequent investment is $50. See "Shareholder
Guide--How to Buy Shares of the Fund" at page 13 and "Shareholder
Guide--Shareholder Services" at page 19.
2<PAGE>
<PAGE>
How Do I Purchase Shares?
You may purchase shares of the Fund through Prudential Securities, Pruco
Securities Corporation (Prusec) or directly from the Fund, through its
transfer agent, Prudential Mutual Fund Services, Inc. (PMFS or the Transfer
Agent), at the NAV next determined after receipt of your purchase order by the
Transfer Agent or Prudential Securities. See "How the Fund Values Its Shares"
at page 11 and "Shareholder Guide--How to Buy Shares of the Fund" at page 13.
How Do I Sell My Shares?
You may redeem shares of the Fund at any time at the NAV next determined
after Prudential Securities or the Transfer Agent receives your sell order.
See "Shareholder Guide--How to Sell Your Shares" at page 16.
How Are Dividends and Distributions Paid?
The Fund expects to declare daily and pay monthly dividends of net
investment income. Dividends will be automatically reinvested in additional
shares of the Fund at NAV unless you request that they be paid to you in cash.
See "Taxes, Dividends and Distributions" at page 11.
3
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<PAGE>
FUND EXPENSES
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases . . . . . . . . . . . . None
Maximum Sales Load Imposed on Reinvested Dividends. . . . . . . None
Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fee. . . . . . . . . . . . . . . . . . . . . . . . . . None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . .300%
12b-1 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .125%
Other Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .281%
Total Fund Operating Expenses . . . . . . . . . . . . . . . . . .706%
1 3 5 10
Example year years years years
- ------- ----- ----- ----- -----
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period: $7 $23 $39 $88
The above example is based on data for the Fund's fiscal year ended December
31, 1993. The example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
The purpose of the table is to assist an investor in understanding the various
costs and expenses that an investor in the Fund will bear, whether directly or
indirectly. For more complete descriptions of the various costs and expenses,
see "How the Fund is Managed." "Other Expenses" include an estimate of
operating expenses of the Fund, such as directors' and professional fees,
registration fees, reports to shareholders and transfer agency and custodian
fees.
4
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<PAGE>
FINANCIAL HIGHLIGHTS
(for a share of capital stock outstanding throughout each year indicated)
The following information with respect to the five-year period ended
December 31, 1993 has been audited by Deloitte & Touche, independent
accountants, whose report thereon was unqualified. This information should be
read in conjunction with the financial statements and notes thereto, which
appear in the Statement of Additional Information. The following financial
highlights contain selected data for a share of capital stock outstanding,
total return, ratios to average net assets and other supplemental data for the
years indicated. This information is based on data contained in the financial
statements.
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of year . . . . . . . . . . . $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income. . . . . .027 .035 .058 .077 .086
Dividends from net
investment income . . . . . . (.027) (.035) (.058) (.077) (.086)
Net asset value, end of year . $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------
Total Return++ . . . . . . . . 2.70% 3.59% 5.95% 8.00% 8.96%
==== ==== ==== ==== ====
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000). 7,318,633 6,703,281 7,138,159 7,411,932 8,168,972
Average net assets (000) . . . 7,742,989 7,116,739 7,763,251 8,262,329 6,947,060
Ratios to average net assets:
Expenses, including
distribution fee. . . . . . . .71% .66% .68% .73% .69%
Expenses, excluding
distribution fee. . . . . . . .58% .54% .56% .60% .57%
Net investment income. . . . . 2.63% 3.43% 5.72% 7.62% 8.57%
- --------------------
+ On October 17, 1984, shareholders of the Fund approved a Plan of Distribution to reimburse
the distributor of the Fund's shares at an annual rate of .125% of the Fund's average daily
net assets. The Fund's ratios of operating expenses and net investment income to average
net assets have been affected by the Plan since that date.
++ Total return represents the change in net asset value from the first day to the last day of
each period reported and includes reinvestment of dividends and distributions.
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------------------
1988 1987 1986 1985 1984+
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of year . . . . . . . . . . . $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income. . . . . .069 .061 .063 .076 .102
Dividends from net
investment income . . . . . . (.069) (.061) (.063) (.076) (.102)
Net asset value, end of year . $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------
Total Return++ . . . . . . . . 7.11% 6.33% 6.48% 7.92% 10.65%
==== ==== ==== ==== =====
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000). 5,240,662 4,620,542 3,875,978 3,306,841 3,347,669
Average net assets (000) . . . 5,139,264 4,412,175 3,846,982 3,368,056 2,999,467
Ratios to average net assets:
Expenses, including
distribution fee. . . . . . . .71% .69% .64% .62% .52%
Expenses, excluding
distribution fee. . . . . . . .58% .57% .52% .49% .50%
Net investment income. . . . . 6.98% 6.06% 6.22% 7.76% 10.10%
- --------------------
+ On October 17, 1984, shareholders of the Fund approved a Plan of Distribution to reimburse
the distributor of the Fund's shares at an annual rate of .125% of the Fund's average daily
net assets. The Fund's ratios of operating expenses and net investment income to average
net assets have been affected by the Plan since that date.
++ Total return represents the change in net asset value from the first day to the last day of
each period reported and includes reinvestment of dividends and distributions.
5
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<PAGE>
CALCULATION OF YIELD
The Fund calculates its "current yield" based on the net change,
exclusive of realized and unrealized gains or losses, in the value of a
hypothetical account over a seven calendar day base period. The Fund also
calculates its "effective annual yield" assuming weekly compounding. The
following is an example of the current and effective annual yield calculations
as of December 31, 1993:
Value of hypothetical account at end of period. . . . . . . . $1.000541823
Value of hypothetical account at beginning of period. . . . . 1.000000000
------------
Base period return. . . . . . . . . . . . . . . . . . . . . . $0.000541823
============
Current yield (0.000541823 X (365/7)) . . . . . . . . . . . . 2.83%
Effective annual yield, assuming weekly compounding . . . . . 2.87%
The yield will fluctuate from time to time and is not necessarily
representative of future income or dividends.
The weighted average life to maturity of the Fund's portfolio on December
31, 1993 was 42 days.
Yield is computed in accordance with a standardized formula described in
the Statement of Additional Information. Comparative performance information
may be used from time to time in advertising or marketing the Fund's shares,
including data from Lipper Analytical Services, Inc., Donoghue's Money Fund
Report, The Bank Rate Monitor, other industry publications, business
periodicals and market indices.
HOW THE FUND INVESTS
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is maximum current income consistent
with stability of capital and the maintenance of liquidity. The Fund invests
primarily in a portfolio of money market instruments maturing in thirteen
months or less. There can be no assurance that this objective will be
achieved.
The Fund's investment objective is a fundamental policy and, therefore,
may not be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company Act
of 1940, as amended (the Investment Company Act). Policies that are not
fundamental may be modified by the Directors.
The types of instruments utilized in seeking to accomplish this objective
include:
1. U.S. Treasury bills and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
2. Obligations (including certificates of deposit and bankers'
acceptances) of (a) banks organized under the laws of the United States or any
state thereof (including foreign branches of such banks) or (b) U.S. branches
of foreign banks or (c) foreign banks and foreign branches thereof; provided
that such banks have, at the time of acquisition by the Fund of such
obligations, total assets of not less than $1 billion or its equivalent. The
term "certificates of deposit" includes both Eurodollar certificates of
deposit, for which there is generally a market, and Eurodollar time deposits,
for which there is generally not a market. "Eurodollars" are dollars deposited
in banks outside the United States; the Fund invests in Eurodollar instruments
of foreign and domestic banks.
6
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<PAGE>
3. Commercial paper, variable amount demand master notes, bills, notes
and other obligations issued by a U.S. company, a foreign company or a foreign
government, its agencies or instrumentalities, maturing in thirteen months or
less, denominated in U.S. dollars, and, at the date of investment, rated at
least AA or A-2 by Standard & Poor's Corporation (S&P), Aa or Prime-2 by
Moody's Investors Service (Moody's) or AA or Duff 2 by Duff and Phelps, Inc.
(Duff and Phelps) or, if not rated, issued by an entity having an outstanding
unsecured debt issue rated at least AA or A-2 by S&P, Aa or Prime-2 by Moody's
or AA or Duff 2 by Duff and Phelps. If such obligations are guaranteed or
supported by a letter of credit issued by a bank, such bank (including a
foreign bank) must meet the requirements set forth in the preceding paragraph.
If such obligations are guaranteed or insured by an insurance company or other
non-bank entity, such insurance company or other non-bank entity must
represent a credit of high quality, as determined by the Fund's investment
adviser under the supervision of the Fund's Board of Directors.
In selecting commercial paper and other corporate obligations for
investment by the Fund, the investment adviser considers ratings assigned by
major rating services, information concerning the financial history and
condition of the issuer and its revenue and expense prospects. The Board of
Directors monitors the credit quality of securities purchased for the Fund's
portfolio. If commercial paper or another corporate obligation held by the
Fund is assigned a lower rating or ceases to be rated, the investment adviser
under the supervision of the Board of Directors will promptly reassess whether
that security presents minimal credit risks and whether the Fund should
continue to hold the security in its portfolio. If a portfolio security
presents greater than minimal credit risks or is in default, the Fund will
dispose of the security as soon as reasonably practicable unless the Board of
Directors determines that to do so is not in the best interests of the Fund
and its shareholders.
The Fund utilizes the amortized cost method of valuation in accordance
with regulations issued by the Securities and Exchange Commission. See "How
the Fund Values Its Shares." Accordingly, the Fund will limit its portfolio
investments to those instruments which present minimal credit risks and which
are of "eligible quality" as determined by the Fund's investment adviser under
the supervision of the Board of Directors. "Eligible quality," for this
purpose, means (i) a security rated in one of the two highest rating
categories by at least two major rating agencies assigning a rating to the
security or issuer (or, if only one agency assigned a rating, that agency) or
(ii) an unrated security deemed of comparable quality by the Fund's investment
adviser under the supervision of the Board of Directors. The purchase by the
Fund of a security of eligible quality that is rated by only one rating agency
or is unrated must be approved or ratified by the Board of Directors.
As long as the Fund utilizes the amortized cost method of valuation, it
will also comply with certain diversification requirements and will invest no
more than 5% of its total assets in "second-tier securities," with no more
than 1% of its assets in any one issuer of a second-tier security. A
"second-tier security," for this purpose, is a security of eligible quality
that does not have the highest rating from at least two agencies assigning a
rating to that security or issuer (or, if only one agency assigned a rating,
that agency) or an unrated security that is deemed of comparable quality by
the Fund's investment adviser. The Fund will also maintain a dollar-weighted
average portfolio maturity of ninety days or less.
OTHER INVESTMENTS AND POLICIES
Repurchase Agreements.
The Fund may on occasion enter into repurchase agreements, whereby the
seller of a security agrees to repurchase that security from the Fund at a
mutually agreed-upon time and price. The repurchase date is usually within a
day or two of the original purchase, although it may not be for 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 security. The Fund's repurchase agreements will at all
times be fully collateralized in an amount at least equal to the purchase
price including accrued interest earned on the underlying securities. The
instruments held as collateral are valued daily, and as the value of
instruments declines, the Fund will require additional collateral. If the
seller defaults and the value of the
7
<PAGE>
<PAGE>
collateral securing the repurchase agreement declines, the Fund may incur a
loss. The Fund participates in a joint repurchase account with other
investment companies managed by Prudential Mutual Fund Management, Inc.
pursuant to an order of the Securities and Exchange Commission (SEC).
Liquidity Puts.
The Fund also may purchase instruments of the types described above
together with the right to resell the instruments at an agreed-upon price or
yield within a specified period prior to the maturity date of the instruments.
Such a right to resell is commonly known as a "put," and the aggregate price
that the Fund pays for instruments with a put may be higher than the price
that otherwise would be paid for the instruments.
Securities Lending.
The Fund may lend its portfolio securities to brokers or dealers, banks
or other recognized institutional borrowers of securities, provided that the
borrower at all times maintains cash collateral in an amount equal to at least
100% of the market value of the securities loaned. During the time portfolio
securities are on loan, the borrower will pay the Fund an amount equivalent to
any interest paid on such securities and the Fund may invest the cash
collateral and earn additional income. As a matter of fundamental policy, the
Fund cannot lend more than 10% of the value of its total assets.
Risks of Investing in Foreign Securities.
The portfolio may contain obligations of foreign banks and foreign
branches of foreign banks, U.S. branches of foreign banks and foreign branches
of U.S. banks, as well as commercial paper, bills, notes and other obligations
issued in the United States by foreign issuers, including foreign governments,
their agencies and instrumentalities. Accordingly, an investment in the Fund
involves certain additional risks. These risks include future political and
economic developments in the country of the issuer, the possible imposition of
withholding taxes on interest income payable on such obligations held by the
Fund, the possible seizure or nationalization of foreign deposits and the
possible establishment of exchange controls or other foreign governmental laws
or restrictions which might affect adversely the payment of principal and
interest on such obligations held by the Fund. In addition, there may be less
publicly available information about a foreign issuer than about a domestic
one, and foreign issuers may not be subject to the same accounting, auditing
and financial recordkeeping standards and requirements as domestic issuers.
Securities issued by foreign issuers may be subject to greater fluctuations in
price than securities issued by U.S. entities. Finally, in the event of a
default with respect to any such foreign debt obligations, it may be more
difficult for the Fund to obtain or to enforce a judgment against the issuers
of such securities.
Other Considerations.
The Fund may not invest more than 10% of its total assets in repurchase
agreements which have a maturity of longer than seven days or in other
illiquid securities, including securities that are illiquid by virtue of the
absence of a readily available market or legal or contractual restrictions on
resale. Securities that have legal or contractual restrictions on resale but
have a readily available market are not deemed illiquid for purposes of this
limitation. The investment adviser will monitor the liquidity of such
restricted securities under the supervision of the Board of Directors.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period.
Although the Fund provides the advantage of diversification, there is
still an inherent market risk due to the nature of the investment. If interest
rates decline, then yield to shareholders will also decline. If there are
unusually heavy redemption requests because of changes in interest rates or
for any other reason, the Fund may have to sell a portion of its investment
portfolio at a time when it may be disadvantageous to do so. The Fund believes
that its borrowing provision for abnormally heavy redemption requests would
help to mitigate any adverse effects and would make the sale of its portfolio
securities unlikely. When a shareholder redeems shares, it is possible that
the redemption proceeds will be less than the amount invested.
8
<PAGE>
<PAGE>
INVESTMENT RESTRICTIONS
The Fund is subject to certain investment restrictions which, like its
investment objective, constitute fundamental policies. Fundamental policies
cannot be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company
Act. See "Investment Restrictions" in the Statement of Additional Information.
HOW THE FUND IS MANAGED
The Fund has a Board of Directors which, in addition to overseeing the
actions of the Fund's Manager, Subadviser and Distributor, as set forth below,
decides upon matters of general policy. The Fund's Manager conducts and
supervises the daily business operations of the Fund. The Fund's Subadviser
furnishes daily investment advisory services.
For the year ended December 31, 1993, the Fund's total expenses as a
percentage of average net assets were.71%. See "Financial Highlights."
MANAGER
Prudential Mutual Fund Management, Inc. (PMF or the Manager), One Seaport
Plaza, New York, New York 10292, is the manager of the Fund and is compensated
for its services at an annual rate of .50 of 1% of the Fund's average daily
net assets up to $50 million and .30 of 1% of the Fund's average daily net
assets in excess of $50 million. PMF was incorporated in May 1987 under the
laws of the State of Delaware.
For the fiscal year ended December 31, 1993, the Fund paid net management
fees to PMF of .30% of the Fund's average net assets. See "Manager" in the
Statement of Additional Information.
As of January 31, 1994, PMF served as the manager to 37 open-end
investment companies, constituting all of the Prudential Mutual Funds, and as
manager or administrator to 29 closed-end investment companies with aggregate
assets of approximately $51 billion.
Under the Management Agreement with the Fund, PMF manages the investment
operations of the Fund and also administers the Fund's corporate affairs. See
"Manager" in the Statement of Additional Information.
Under a Subadvisory Agreement between PMF and The Prudential Investment
Corporation (PIC or the Subadviser), PIC furnishes investment advisory
services in connection with the management of the Fund and is reimbursed by
PMF for its reasonable costs and expenses incurred in providing such services.
Under the Management Agreement, PMF continues to have responsibility for all
investment advisory services and supervises PIC's performance of such
services.
PMF and PIC are indirect, wholly-owned subsidiaries of The Prudential
Insurance Company of America (Prudential), a major diversified insurance and
financial services company.
DISTRIBUTOR
Prudential Mutual Fund Distributors, Inc. (PMFD or the Distributor), One
Seaport Plaza, New York, New York 10292, is a corporation organized under the
laws of the State of Delaware and serves as the Distributor of the Fund. PMFD
is a wholly-owned subsidiary of PMF.
Under a Distribution and Service Plan (the Plan) adopted by the Fund
under Rule 12b-1 under the Investment Company Act and a distribution agreement
(the Distribution Agreement), the Distributor incurs the expenses of
9
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<PAGE>
distributing the shares of the Fund. These expenses include account servicing
fees paid to, or on account of, financial advisers of Prudential Securities
Incorporated (Prudential Securities) and Pruco Securities Corporation
(Prusec), affiliated broker-dealers, account servicing fees paid to, or on
account of, other broker-dealers or financial institutions (other than
national banks) 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 Prudential Securities
and Prusec associated with the sale of Fund shares, including lease, utility,
communications and sales promotion expenses. The State of Texas requires that
shares of the Fund may be sold in that state only by dealers or other
financial institutions which are registered there as broker-dealers.
Under the Plan, the Fund reimburses the Distributor for its
distribution-related expenses at an annual rate of up to .125 of 1% of the
Fund's average daily net assets. Account servicing fees are paid based on the
average balance of Fund shares held in accounts of customers of financial
advisers. The entire distribution fee may be used to pay account servicing
fees.
For the fiscal year ended December 31, 1993, the Fund paid PMFD a
distribution fee equal on an annual basis to .125% of the average net assets
of the Fund.
The Plan provides that it shall continue in effect from year to year
provided that each such continuance is approved annually by a majority vote of
the Board of Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreement related to the Plan.
The Directors are provided with and review quarterly reports of expenditures
under the Plan.
For the fiscal year ended December 31, 1993, PMFD incurred distribution
expenses in the aggregate of $9,678,736, all of which was recovered through
the distribution fee paid by the Fund. The Fund records all payments under the
Plan as expenses in the calculation of its net investment income.
In addition to distribution and service fees paid by the Fund under the
Plan, the Manager (or one of its affiliates) may make payments to dealers and
other persons which distribute shares of the Fund. Such payments may be
calculated by reference to the net asset value of shares sold by such persons
or otherwise.
PORTFOLIO TRANSACTIONS
Prudential Securities may act as a broker for the Fund, provided that the
commissions, fees or other remuneration it receives are fair and reasonable.
See "Portfolio Transactions and Brokerage" in the Statement of Additional
Information.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities
and cash and, in that capacity, maintains certain financial and accounting
books and records pursuant to an agreement with the Fund. Its mailing address
is P.O. Box 1713, Boston, Massachusetts 02105.
Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison,
New Jersey 08837, serves as Transfer Agent and Dividend Disbursing Agent and,
in those capacities, maintains certain books and records for the Fund. PMFS is
a wholly-owned subsidiary of PMF. Its mailing address is P.O. Box 15005, New
Brunswick, New Jersey 08906-5005.
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HOW THE FUND VALUES ITS SHARES
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. The Board of Directors has
fixed the specific time of day for the computation of the Fund's NAV to be as
of 4:30 P.M., New York time, immediately after the declaration of dividends.
The Fund will compute its NAV once daily on days that 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 materially affect the net
asset value. The New York Stock Exchange is closed on the following holidays:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
The Fund determines the value of its portfolio securities by the
amortized cost method. This method involves valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity of any discount or
premium regardless of impact of fluctuating interest rates on the market value
of the instrument. While this method provides certainty in valuation, it may
result in periods during which the value of a security in the Fund's portfolio
as determined by amortized cost, is higher or lower than the price the Fund
would receive if it sold such security. During these periods, the yield to a
shareholder may differ somewhat from that which could be obtained from a
similar fund which marks its portfolio securities to the market each day. For
example, during periods of declining interest rates, if the use of the
amortized cost method resulted in a lower value of the Fund's portfolio on a
given day, a prospective investor in the Fund would be able to obtain a
somewhat higher yield and existing shareholders would receive correspondingly
less income. The converse would apply during periods of rising interest rates.
The Directors have established procedures designed to stabilize, to the extent
reasonably possible, the NAV of the shares of the Fund at $1.00 per share. See
"Net Asset Value" in the Statement of Additional Information.
TAXES, DIVIDENDS AND DISTRIBUTIONS
Taxation of the Fund.
The Fund has elected to qualify and intends to remain qualified as a
regulated investment company under the Internal Revenue Code of 1986, as
amended. Accordingly, the Fund will not be subject to federal income taxes on
its net investment income and capital gains, if any, that it distributes to
shareholders.
Taxation of Shareholders.
All dividends out of net investment income, together with distributions
of short-term capital gains, will be taxable as ordinary income to the
shareholders whether or not reinvested. The Fund does not expect to realize
long-term capital gains or losses. In general, tax-exempt shareholders will
not be required to pay taxes on amounts distributed to them.
The Internal Revenue Code imposes a 4% nondeductible excise tax to the
extent the Fund does not meet certain minimum distribution requirements by the
end of each calendar year. For this purpose, dividends declared in October,
November or December and paid in the following January will be treated as
having been paid by the Fund and received by shareholders in such prior year.
Under this rule, a shareholder may be taxed in one year on dividends or
distributions actually received in January of the following year.
Shareholders are advised to consult their own tax advisers regarding
specific questions as to federal, state or local taxes. See "Taxes" in the
Statement of Additional Information.
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Withholding Taxes.
Under U.S. Treasury Regulations, the Fund is required to withhold and
remit to the U.S. Treasury 31% of dividends, capital gain income and
redemption proceeds on the accounts of those shareholders who fail to furnish
their tax identification numbers on IRS Form W-9 (or IRS Form W-8 in the case
of certain foreign shareholders) with the required certifications regarding
the shareholder's status under the federal income tax law. However, dividends
of net investment income and short-term capital gains to a foreign shareholder
will generally be subject to U.S. withholding tax at the rate of 30% (or lower
treaty rate).
Dividends and Distributions.
All the Fund's net income is declared as dividends daily to the
shareholders of record at the time of such declaration. Unless otherwise
requested by the shareholder, such dividends are automatically invested
monthly in additional Fund shares at net asset value. Shareholders may receive
cash payments from the Fund equal to the dividends earned during the month by
completing the appropriate section on the application form or by notifying
PMFS at least five business days prior to the payable date. Cash distributions
are paid by check within five business days after the dividend payment date.
In the event that all of a shareholder's shares are redeemed on a date other
than the monthly dividend payment date, the proceeds of such redemption will
equal the net asset value of the shares redeemed plus the amount of all
dividends declared through the date of redemption. The dividend payment date
is generally on or about the 25th day of each month although the Fund reserves
the right to change this date without further notice to shareholders. Because
declared dividends remain invested by the Fund until the dividend payment date
of each month in the same manner as funds invested in shares, the foregoing
procedure results in income to shareholders in substantially the same amounts
as if dividends were reinvested in shares on a daily basis.
The Fund's net income for dividend purposes is determined immediately
prior to the calculation of net asset value at 4:30 P.M., New York time. Thus,
a shareholder begins to earn dividends on the first business day after his or
her order becomes effective and continues to earn dividends through the day on
which his or her shares are redeemed. Net income of the Fund consists of
interest accrued and discount earned less the estimated expenses of the Fund
and all realized gains and losses on the portfolio securities of the Fund. Net
income earned on Saturdays, Sundays and holidays is accrued in calculating the
dividend on the previous business day. Accordingly, a shareholder who redeems
his or her shares effective as of 4:30 P.M., New York time, on a Friday earns
a dividend which reflects the income earned by the Fund on the following
Saturday and Sunday. On the other hand, an investor whose purchase order is
effective as of 4:30 P.M., New York time, on a Friday does not begin earning
dividends until the following business day.
GENERAL INFORMATION
DESCRIPTION OF SHARES
The Fund was incorporated in Maryland on December 22, 1975. The
authorized capital stock of the Fund consists of 15 billion shares of Common
Stock having a par value of $.10 per share.
The Board of Directors of the Fund is authorized to classify or to
reclassify any unissued shares of the Fund. However, the Board may not
reclassify shares that are issued and outstanding, and it may not create a
class or series of stock which is prior to any class or series of stock
outstanding with respect to rights upon liquidation, dissolution or winding
up, or distribution of the assets of the Fund. Each of the Fund's outstanding
shares has equal dividend, distribution, liquidation and voting rights and is
redeemable at the option of the holder. Shares are also redeemable at the
option of the Fund under certain circumstances as described under "Shareholder
Guide--How to Sell Your Shares." There are no conversion, pre-emptive or
exchange rights in connection with any shares of the Fund, nor are there
cumulative voting rights. All shares are fully paid and nonassessable when
issued.
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The Fund does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold annual
meetings of shareholders unless, for example, the election of Directors 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 a
vote of 10% of the Fund's outstanding shares for the purpose of voting on the
removal of one or more Directors or to transact any other business.
ADDITIONAL INFORMATION
This Prospectus, including the Statement of Additional Information which
has been incorporated by reference herein, does not contain all the
information set forth in the Registration Statement filed by the Fund with the
SEC under the Securities Act of 1933. Copies of the Registration Statement may
be obtained at a reasonable charge from the SEC or may be examined, without
charge, at the office of the SEC in Washington, D.C.
SHAREHOLDER GUIDE
HOW TO BUY SHARES OF THE FUND
You may purchase shares of the Fund through Prudential Securities,
Prusec, or directly from the Fund, through its Transfer Agent, Prudential
Mutual Fund Services, Inc. (PMFS or the Transfer Agent). The minimum initial
investment is $1,000. The minimum subsequent investment is $100. All minimum
investment requirements are waived for certain retirement and employee savings
plans and custodial accounts for the benefit of minors. For purchases made
through the Automatic Savings Accumulation Plan, the minimum initial and
subsequent investment is $50. See "Shareholder Services" below.
Shares of the Fund are sold, without a sales charge, at the NAV next
determined after receipt and acceptance by PMFS of a purchase order and
payment in proper form [i.e., a check or Federal Funds wired to State Street
Bank and Trust Company (State Street)]. See "How the Fund Values Its Shares."
When payment is received by PMFS prior to 4:30 P.M., New York time, in proper
form, a share purchase order will be entered at the price determined as of
4:30 P.M., New York time, on that day, and the shares purchased will begin to
earn dividends on the business day following such investment. See "Taxes,
Dividends and Distributions."
Application Forms can be obtained from PMFS, Prudential Securities or
Prusec. If a stock certificate is desired, it must be requested in writing for
each transaction. Certificates are issued only for full shares. Shareholders
who hold their shares through Prudential Securities will not receive stock
certificates. Shareholders cannot utilize Expedited Redemption or Check
Redemption or have a Systematic Withdrawal Plan if they have been issued share
certificates.
The Fund reserves the right, in its discretion, to reject any purchase
order (including an exchange) or to suspend or modify the continuous
offering of its shares. See "How to Sell Your Shares" below.
Your dealer is responsible for forwarding payment promptly to the Fund.
The Distributor reserves the right to cancel any purchase order for which
payment has not been received by the fifth business day following the
investment.
Transactions in Fund shares made through dealers other than Prudential
Securities or Prusec may be subject to postage and other charges imposed by
the dealer. You may avoid such charges by placing orders directly with
Prudential Mutual Fund Services, Inc., Attention: Investment Services, P.O.
Box 15020, New Brunswick, New Jersey 08906-5020.
Purchases through Prudential Securities.
If you have an account with Prudential Securities (or open such an
account) you may ask Prudential Securities to purchase shares of the Fund on
your behalf. On the business day following confirmation that a free credit
balance (i.e.,
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immediately available funds) exists in your account, Prudential Securities
will effect a purchase order for shares of the Fund in an amount up to such
balance at the NAV determined on that day. Funds held by Prudential Securities
on behalf of its clients in the form of free credit balances are delivered to
the Fund by Prudential Securities and begin earning dividends the second
business day after receipt of the order by Prudential Securities. Accordingly,
Prudential Securities will have the use of such free credit balances during
this period.
Shares of the Fund purchased by Prudential Securities on behalf of its
clients will be held by Prudential Securities as record holder. Prudential
Securities will therefore receive statements and dividends directly from the
Fund and will in turn provide investors with Prudential Securities account
statements reflecting purchases, redemptions and dividend payments. Although
Prudential Securities clients who purchase shares of the Fund through
Prudential Securities may not redeem shares of the Fund by check, Prudential
Securities provides its clients with alternative forms of immediate access to
monies invested in shares of the Fund.
Prudential Securities clients wishing additional information concerning
investment in Fund shares made through Prudential Securities should call their
Prudential Securities financial adviser.
Automatic Investment. Prudential Securities has advised the Fund that it
has instituted procedures pursuant to which, upon enrollment by a Prudential
Securities client, Prudential Securities will make automatic investments of
free credit balances of $1,000 or more ($1.00 for IRAs) (Eligible Credit
Balances) held in such client's account in shares of the Fund (Autosweep). To
effect the automatic investment of Eligible Credit Balances representing the
proceeds from the sale of securities, Prudential Securities will enter orders
for the purchase of Fund shares at the opening of business on the day
following the settlement of such securities transaction; to effect the
automatic investment of Eligible Credit Balances representing non-trade
related credits, Prudential Securities will enter orders for the purchase of
Fund shares at the opening of business semi-monthly. All shares purchased
pursuant to such procedures will be issued at the NAV of such shares
determined on the date the order is entered and will receive the next dividend
declared after such shares are issued.
Self-Directed Investment. Prudential Securities clients not electing the
automatic investment of Eligible Credit Balances may continue to place orders
for the purchase of Fund shares through Prudential Securities, subject to
minimum initial and subsequent investment requirements as described above.
A Prudential Securities client who has not elected Autosweep (see
"Automatic Investment" above) and who does not place a purchase order promptly
after funds are credited to his or her Prudential Securities account will have
a free credit balance with Prudential Securities and will not begin earning
dividends on shares of the Fund until the second business day after receipt of
a purchase order by Prudential Securities. Accordingly, Prudential Securities
will have the use of such free credit balances during this period.
Purchases through Prusec.
You may purchase shares of the Fund by placing an order with your Prusec
registered representative accompanied by payment for the purchase price of
such shares and, in the case of a new account, a completed application form.
You should also submit an IRS Form W-9. The Prusec registered representative
will then forward these items to the Transfer Agent. See "Purchase by Mail"
below.
Purchase by Wire.
For an initial purchase of shares of the Fund by wire, you must first
telephone PMFS at (800) 225-1852 (toll-free) to receive an account number. The
following information will be requested: your name, address, tax
identification number, 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, Boston, Massachusetts,
Custody and Shareholder Services Division, Attention: Prudential MoneyMart
Assets, specifying on the wire the account number assigned by PMFS and your
name.
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If you arrange for receipt by State Street of Federal Funds prior to 4:30
P.M., New York time, on a business day, you may purchase shares of the Fund as
of that day and receive dividends commencing on the next business day.
In making a subsequent purchase order by wire, you should wire State
Street directly and should be sure that the wire specifies Prudential
MoneyMart Assets and your name and individual account number. It is not
necessary to call PMFS to make subsequent purchase orders by wire. The minimum
amount which may be invested by wire is $1,000.
Purchase by Mail.
Purchase orders for which remittance is to be made by check or money
order may be submitted directly by mail to Prudential Mutual Fund Services,
Inc., Attention: Investment Services, P.O. Box 15020, New Brunswick, New
Jersey 08906-5020, together with payment of the purchase price of such shares
and, in the case of a new account, a completed Application Form. You should
also submit an IRS Form W-9. If PMFS receives an order to purchase shares of
the Fund and payment in proper form prior to 4:30 P.M., New York time, the
purchase order will be effective on that day and you will begin earning
dividends on the following business day. See "Taxes, Dividends and
Distributions." Checks should be made payable to Prudential MoneyMart Assets.
Certified checks are not necessary, but checks must be drawn on a bank located
in the United States. There are restrictions on the redemption of shares
purchased by check while the funds are being collected. See "How to Sell Your
Shares" below.
The Prudential Advantage Account Program.
Shares of the Fund are offered to participants in the Prudential
Advantage Account Program (the Advantage Account Program), a financial
services program available to clients of Pruco Securities Corporation.
Investors participating in the Advantage Account Program may select the Fund
as their primary investment vehicle. Such investors will have free credit cash
balances of $1.00 or more in their Securities Account (Available Cash) (a
component of the Advantage Account Program carried through Prudential
Securities) automatically invested in shares of the Fund. Specifically, an
order to purchase shares of the Fund is placed (i) in the case of Available
Cash resulting from the proceeds of securities sales, on the settlement date
of the securities sale, and (ii) in the case of Available Cash resulting from
non-trade related credits (i.e., receipt of dividends and interest payments,
or a cash payment by the participant into his or her Securities Account), on
the business day after receipt by Prudential Securities of the non-trade
related credit.
All shares purchased pursuant to these automatic purchase procedures will
begin earning dividends on the business day after the order is placed.
Prudential Securities will arrange for investment in shares of the Fund at
4:30 P.M. on the day the order is placed and cause payment to be made in
federal funds for the shares prior to 4:30 P.M. on the next business day.
Prudential Securities will have the use of free credit cash balances until
delivery to the Fund.
Redemptions will be automatically effected by Prudential Securities to
satisfy debit balances in a Securities Account created by activity therein or
arising under the Advantage Account Program, such as those incurred by use of
the Visa Gold Account, including Visa purchases, cash advances and Visa
Account checks. Each Advantage Account Program Securities Account will be
automatically scanned for debits each business day as of the close of business
on that day and after application of any free credit cash balances in the
account to such debits, a sufficient number of shares of the Fund (if selected
as the Primary Fund) and, if necessary, shares of other Advantage Account
funds owned by the Advantage Account Program participant which have not been
selected as his or her primary fund or shares of a participant's money market
funds managed by PMF which are not primary Advantage Account Funds will be
redeemed as of that business day to satisfy any remaining debits in the
Securities Account. Margin loans will be utilized to satisfy debits remaining
after the liquidation of all shares of the Fund in a Securities Account, and
shares may not be purchased until all debits, margin loans and other
requirements in the Securities Account are satisfied.
Advantage Account Program charges and expenses are not reflected in the
table of Fund Expenses. See "Fund Expenses."
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For information on participation in the Advantage Account Program,
investors should telephone (800) 235-7637 (toll-free).
HOW TO SELL YOUR SHARES
You can redeem your shares at any time for cash at the NAV per share next
determined after the redemption request is received in proper form by the
Transfer Agent or Prudential Securities. See "How The Fund Values Its Shares."
Shares for which a redemption request is received by PMFS prior to 4:30
P.M., New York time, are entitled to a dividend on the day on which the
request is received. By pre-authorizing Expedited Redemption, you may arrange
to have payment for redeemed shares made in Federal Funds wired to your bank,
normally on the next bank business day following the date of receipt of the
redemption instructions. Should you redeem all of your shares, you will
receive the amount of all dividends declared for the month-to-date on those
shares. See "Taxes, Dividends and Distributions."
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, Inc., Attention: Redemption
Services, P.O. Box 15010, New Brunswick, New Jersey 08906-5010.
If the proceeds of the redemption (a) exceed $50,000, (b) are to be paid
to a person other than the record owner, (c) are to be sent to an address
other than the address on the Transfer Agent's records or (d) are to be paid
to a corporation, partnership, trust or fiduciary, the signature(s) on the
redemption request 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.
For clients of Prusec, a signature guarantee may be obtained from the agency
or office manager of most Prudential Insurance and Financial Services or
Prudential Preferred Financial Services offices.
Normally, the Fund makes payment on the next business day for all shares
redeemed, but in any event, payment will be made within seven days after
receipt by PMFS of stock certificates and/or of a redemption request in proper
form. However, the Fund may suspend the right of redemption or postpone the
date of payment (a) for any periods during which the New York Stock Exchange
is closed (other than for customary weekend or holiday closings), (b) for any
periods when trading in the markets which the Fund normally utilizes is closed
or restricted or an emergency exists as determined by the SEC so that disposal
of the Fund's investments or determination of its net asset value is not
reasonably practicable or (c) for such other periods as the SEC may permit for
protection of the Fund's shareholders.
Payment for redemption of recently purchased shares will be delayed until
the Fund or its Transfer Agent has been advised that the purchase check has
been honored up to 10 calendar days from the time of receipt of the purchase
check by the Transfer Agent. Such delay may be avoided by purchasing shares by
wire or by certified or official bank checks. The Fund makes no charge for
redemption.
Redemption of Shares Purchased through Prudential Securities.
Prudential Securities clients for whom Prudential Securities has
purchased shares of the Fund may have these shares redeemed only by
instructing their Prudential Securities financial adviser orally or in
writing.
Prudential Securities has advised the Fund that it has established
procedures pursuant to which shares of the Fund held by a Prudential
Securities client having a deficiency in his or her Prudential Securities
account will be redeemed automatically to the extent of that deficiency to the
nearest highest dollar, unless the client notifies Prudential Securities to
the contrary. The amount of the redemption will be the lesser of (a) the total
NAV of Fund shares held in the client's Prudential Securities account or (b)
the deficiency in the client's Prudential Securities account at the close of
business on the date such deficiency is due. Accordingly, a Prudential
Securities client utilizing this automatic redemption
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procedure and who wishes to pay for a securities transaction or meet any
market action related deficiency in his or her account other than through such
automatic redemption procedure must do so not later than the day of settlement
for such securities transaction or the date such market action related
deficiency is incurred. Prudential Securities clients who have elected to
utilize Autosweep will not be entitled to dividends declared on the date of
redemption.
Redemption of Shares Purchased through PMFS.
If you purchase shares of the Fund through PMFS, you may use Check
Redemption, Expedited Redemption or Regular Redemption. Prudential Securities
clients for whom Prudential Securities has purchased shares may not use such
services.
Regular Redemption. You may redeem your shares by sending a written
request, accompanied by duly endorsed stock certificates, if issued, to PMFS,
Attention: Redemption Services, P.O. Box 15010, New Brunswick, New Jersey
08906-5010. In this case, all stock certificates and all written requests for
redemption must be endorsed by the shareholder with signature guaranteed, as
described above. PMFS may request further documentation from corporations,
executors, administrators, trustees or guardians. Regular redemption is made
by check sent to the shareholder's address.
Expedited Redemption. By pre-authorizing Expedited Redemption, you may
arrange to have payment for redeemed shares made in Federal Funds wired to
your bank, normally on the next business day following redemption. In order to
use Expedited Redemption, you may so designate at the time the initial
investment is made or at a later date. Once an Expedited Redemption
authorization form has been completed, the signature on the authorization form
guaranteed as set forth above and the form returned to PMFS, requests for
redemption may be made by telegraph, letter or telephone. To request Expedited
Redemption by telephone, you should call PMFS at (800) 255-1852. Calls must be
received by PMFS before 4:30 P.M., New York time, to permit redemption as of
such date. Requests by letter should be addressed to Prudential Mutual Fund
Services, Inc., Att: Redemption Services, P.O. Box 15010, New Brunswick, New
Jersey 08906-5010.
A signature guarantee is not required under Expedited Redemption once
the authorization form is properly completed and returned. The Expedited
Redemption privilege may be used only to redeem shares in an amount of $200 or
more, except that, if an account for which Expedited Redemption is requested
has an NAV of less than $200, the entire account must be redeemed. The
proceeds of redeemed shares in the amount of $1,000 or more are transmitted by
wire to your account at a domestic commercial bank which is a member of the
Federal Reserve System. Proceeds of less than $1,000 are forwarded by check to
your designated bank account.
During periods of severe market or economic conditions, expedited
redemption may be difficult to implement, and shareholders should redeem
shares by mail as described above.
Check Redemption. At your request, State Street will establish a personal
checking account for you. Checks drawn on this account can be made payable to
the order of any person in any amount greater than $500. When such check is
presented to State Street for payment, State Street presents the check to the
Fund as authority to redeem a sufficient number of shares of the Fund in the
shareholder's account to cover the amount of the check. If insufficient shares
are in the account, or if the purchase was made by check within 10 calendar
days, the check will be returned marked "insufficient funds." Checks in an
amount less than $500 will not be honored. Shares for which certificates have
been issued cannot be redeemed by check. PMFS reserves the right to impose a
service charge to establish a checking account and order checks.
Involuntary Redemption.
Because of the relatively high cost of maintaining an account, the Fund
reserves the right to redeem, upon 60 days' written notice, an account which
is reduced by a shareholder to an NAV of $500 or less due to redemption. You
may avoid such redemption by increasing the NAV of your account to an amount
in excess of $500.
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Redemption in Kind. If the Directors determine that it would be
detrimental to the best interests of the remaining shareholders of the Fund to
make payment wholly or partially in cash, the Fund may pay the redemption
price in whole or in part by a distribution in kind of securities from the
portfolio of the Fund, in lieu of cash, in conformity with the applicable
rules of the SEC. Securities will be readily marketable and will be valued in
the same manner as in a regular redemption. See "How the Fund Values Its
Shares." If your shares are redeemed in kind, you will incur brokerage 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
one percent of the net asset value of the Fund during any 90-day period for
any one shareholder.
30-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 30 days after the date of the
redemption. Exercise of the repurchase privilege will not affect the federal
income tax treatment of any gain realized upon the redemption. If the
redemption resulted in a loss, some or all of the loss, depending on the
amount reinvested, will not be allowed.
Class B Purchase Privilege.
You may direct that the proceeds of a redemption of Fund shares be
invested in Class B shares of any Prudential Mutual Fund by calling your
Prudential Securities financial adviser or the Transfer Agent at (800)
225-1852. The transaction will be effected on the basis of the relative NAV
per share.
HOW TO EXCHANGE YOUR SHARES.
As a shareholder of the Fund, you have an exchange privilege (the
Exchange Privilege) with certain other Prudential Mutual Funds, including one
or more specified money market funds and funds sold with an initial sales
charge, subject to the minimum investment requirements of such funds on the
basis of the relative NAV. You may exchange your shares for Class A shares of
the Prudential Mutual Funds on the basis of relative NAV, plus the applicable
sales charge. No additional sales charge is imposed in connection with
subsequent exchanges. You may not exchange your shares for Class B shares of
the Prudential Mutual Funds, except that shares acquired prior to January 22,
1990 subject to a contingent deferred sales charge can be exchanged for Class
B shares. See "How to Sell Your Shares--Class B Purchase Privilege" above and
"Shareholder Investment Account--Exchange Privilege" in the Statement of
Additional Information. An exchange will be treated as a redemption and
purchase for tax purposes.
In order to exchange shares by telephone, you must authorize the
telephone exchange privilege on your initial application form or by written
notice to the Transfer Agent and hold shares in non-certificate form.
Thereafter, you may call the Fund at (800) 225-1852 to execute a telephone
exchange of shares weekdays, except holidays, between the hours of 8:00 A.M.
and 6:00 P.M., New York time. For your protection and to prevent fraudulent
exchanges, your telephone call will be recorded and you will be asked to
provide your personal identification number. A written confirmation of the
exchange transaction will be sent to you. All exchanges will be made on the
basis of the relative NAV of the two funds next determined after the request
is received in good order. The Exchange Privilege is available only in states
where the exchange may legally be made.
If you hold shares through Prudential Securities you must exchange your
shares by contacting your Prudential Securities financial adviser.
If you hold certificates, the certificates, signed in the name(s) shown
on the face of the certificates, must be returned in order for the shares to
be exchanged. See "How to Sell Your Shares" above.
Neither the Fund nor its agents will be liable for any loss, liability or
cost which results from acting upon instructions reasonably believed to be
genuine under the foregoing procedures.
18
<PAGE>
<PAGE>
You may exchange shares by mail by writing to Prudential Mutual Fund
Services, Inc., Attention: Exchange Processing, P.O. Box 15010, New Brunswick,
New Jersey 08906-5010.
In periods of severe market or economic conditions the telephone exchange
of shares may be difficult to implement and you should make exchanges by mail
by writing to Prudential Mutual Fund Services, Inc., at the address noted
above.
The Exchange Privilege may be modified or terminated at any time on sixty
days' notice to shareholders.
SHAREHOLDER SERVICES
In addition to the Exchange Privilege, as a shareholder in the Fund, you
can take advantage of the following additional services and privileges:
* Automatic Reinvestment of Dividends and/or Distributions. For your
convenience, all dividends and distributions are automatically reinvested in
full and fractional shares of the Fund at NAV. You may direct the Transfer
Agent in writing not less than 5 full business days prior to the record date
to have subsequent dividends and/or distributions sent in cash rather than
reinvested. If you hold shares through Prudential Securities, you should
contact your financial adviser.
* Automatic Savings Accumulation Plan (ASAP). Under ASAP you may make
regular purchases of Fund shares in amounts as little as $50 via an automatic
charge to a bank account or Prudential Securities account (including a Command
Account). For additional information about this service, you may contact your
Prudential Securities financial adviser, Prusec registered representative or
the Transfer Agent directly.
* Tax-Deferred Retirement Plans. Various tax-deferred retirement plans,
including a 401(k) plan, self-directed individual retirement accounts and
"tax-sheltered accounts" under Section 403(b)(7) of the Internal Revenue Code
are available through the Distributor. These plans are for use by both
self-employed individuals and corporate employers. These plans permit either
self-direction of accounts by participants, or a pooled account arrangement.
Information regarding the establishment of these plans, the administration,
custodial fees and other details is available from Prudential Securities or
the Transfer Agent. If you are considering adopting such a plan, you should
consult with your own legal or tax adviser with respect to the establishment
and maintenance of such a plan.
* Systematic Withdrawal Plan. A systematic withdrawal plan is available
for shareholders having shares of the Fund which provides for monthly or
quarterly checks. If you hold your shares through Prudential Securities, you
should contact your financial adviser.
* Multiple Accounts. Special procedures have been designed for banks and
other institutions that wish to open multiple accounts. An institution may
open a single master account by filing an Application Form with the Transfer
Agent, Attention: Customer Service, P.O. Box 15005, New Brunswick, New Jersey
08906, signed by personnel authorized to act for the institution. Individual
sub-accounts may be opened at the time the master account is opened by listing
them on the application form, or they may be added at a later date by written
advice or by filing forms supplied by the Fund. Procedures are available to
identify sub-accounts by name and number within the master account name. The
investment minimums set forth above are applicable to the aggregate amounts
invested by a group and not to the amount credited to each sub-account.
* Purchase by Holders of Prudential Securities Unit Trusts. Holders of
Prudential sponsored Unit Trusts may elect to have monthly distributions paid
by such Unit Trusts reinvested in shares of the Fund without compliance with
the investment minimums described under "How to Buy Shares of the Fund."
19<PAGE>
<PAGE>
* Reports to Shareholders. The Fund will send you annual and semi-annual
reports. The financial statements appearing in annual reports are audited by
independent accountants. In order to reduce duplicate mailing and printing
expenses, the Fund will provide one annual and semi-annual shareholder report
and annual prospectus per household. You may request additional copies of such
reports by calling (800) 225-1852 or by writing to the Fund at One Seaport
Plaza, New York, NY 10292.
* Shareholder Inquiries. Inquiries should be addressed to the Fund at One
Seaport Plaza, New York, New York 10292, or by telephone, at (800) 225-1852
(toll free) or, from outside the U.S.A., at (908) 417-7555 (collect).
For additional information regarding the services and privileges
described above, see "Shareholder Investment Account" in the Statement of
Additional Information.
20
<PAGE>
<PAGE>
THE PRUDENTIAL MUTUAL FUND FAMILY
Prudential Mutual Fund Management offers a broad range of mutual funds
designed to meet your individual needs. We welcome you to review the
investment options available through our family of funds. For more information
on the Prudential Mutual Funds, including charges and expenses, contact your
Prudential Securities financial adviser or Prusec registered representative or
telephone the Fund at (800) 225-1852 for a free prospectus. Read the
prospectus carefully before you invest or send money.
Taxable Bond Funds
Prudential Adjustable Rate Securities Fund, Inc.
Prudential GNMA Fund
Prudential Government Plus Fund
Prudential Government Securities Trust
Intermediate Term Series
Prudential High Yield Fund
Prudential Structured Maturity Fund
Income Portfolio
Prudential U.S. Government Fund
The BlackRock Government Income Trust
Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Yield Series
Insured Series
Modified Term Series
Prudential Municipal Series Fund
Arizona Series
Florida Series
Georgia Series
Maryland Series
Massachusetts Series
Michigan Series
Minnesota Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund
Global Funds
Prudential Global Fund, Inc.
Prudential Global Genesis Fund
Prudential Global Natural Resources Fund
Prudential Intermediate Global Income Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Short-Term Global Income Fund, Inc.
Global Assets Portfolio
Short-Term Global Income Portfolio
Global Utility Fund, Inc.
Equity Funds
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential FlexiFund
Conservatively Managed Portfolio
Strategy Portfolio
Prudential Growth Fund, Inc.
Prudential Growth Opportunity Fund
Prudential IncomeVertible(REGISTER MARK) Fund, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Utility Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Money Market Funds
* Taxable Money Market Funds
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund
Money Market Series
Prudential MoneyMart Assets
* Tax-Free Money Market Funds
Prudential Tax-Free Money Fund
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
* Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
* Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
A-1
<PAGE>
<PAGE>
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus, in connection with the offer contained herein,
and, if given or made, such other information or representations must not be
relied upon as having been authorized by the Fund or the Distributor. This
Prospectus does not constitute an offer by the Fund or by the Distributor to
sell or a solicitation of any offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer in such jurisdiction.
- ---------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
FUND HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FINANCIAL HIGHLIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . 5
CALCULATION OF YIELD. . . . . . . . . . . . . . . . . . . . . . . . . . 6
HOW THE FUND INVESTS. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . 6
Other Investments and Policies . . . . . . . . . . . . . . . . . . . . 7
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . 9
HOW THE FUND IS MANAGED . . . . . . . . . . . . . . . . . . . . . . . . 9
Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . 10
Custodian and Transfer and
Dividend Disbursing Agent . . . . . . . . . . . . . . . . . . . . . . 10
HOW THE FUND VALUES ITS SHARES. . . . . . . . . . . . . . . . . . . . . 11
TAXES, DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . 11
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Description of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 12
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . 13
SHAREHOLDER GUIDE . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
How to Buy Shares of the Fund. . . . . . . . . . . . . . . . . . . . . 13
How to Sell Your Shares. . . . . . . . . . . . . . . . . . . . . . . . 16
How to Exchange Your Shares. . . . . . . . . . . . . . . . . . . . . . 18
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . 19
PRUDENTIAL MUTUAL FUND FAMILY . . . . . . . . . . . . . . . . . . . . . A-1
- ---------------------------------------------------------------------------
MF 108A 430230J
- ---------------------------------------------------------------------------
/ CUSIP No.:74435H-10-2 /
- ---------------------------------------------------------------------------
PROSPECTUS
February 16, 1994
Prudential
MoneyMart
Assets
----------------
(Prudential Mutual Funds Logo)
<PAGE>
<PAGE>
PRUDENTIAL
MONEYMART ASSETS
Statement of Additional Information
Dated February 16, 1994
Prudential-Bache MoneyMart Assets Inc., doing business as Prudential
MoneyMart Assets (the Fund), is an open-end, diversified, management investment
company whose investment objective is maximum current income consistent with
stability of capital and maintenance of liquidity. The Fund pursues this
objective by investing primarily in a portfolio of short-term money market
instruments maturing within thirteen months of the date of acquisition. The
Fund's address is One Seaport Plaza, New York, New York 10292, 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 Fund's Prospectus, dated February 16, 1994, a copy
of which may be obtained from the Fund upon request at the address noted above.
TABLE OF CONTENTS
</TABLE>
<TABLE>
<CAPTION>
Cross-
reference
to page in
Page Prospectus
---- ----------------
<S> <C> <C>
General Information and History............................................. B-2 12
Investment Objective and Policies........................................... B-2 6
Investment Restrictions..................................................... B-2 9
Suitability for Investors................................................... B-4 --
Calculation of Yield........................................................ B-4 6
Directors and Officers...................................................... B-4 9
Manager..................................................................... B-7 9
Distributor................................................................. B-8 9
Purchase and Redemption of Fund Shares...................................... B-9 13
Shareholder Investment Account.............................................. B-10 19
Dividends................................................................... B-12 11
Net Asset Value............................................................. B-12 11
Portfolio Transactions...................................................... B-12 10
Taxes....................................................................... B-13 11
Custodian, Transfer and Dividend Disbursing Agent and Independent
Accountants............................................................... B-14 10
Independent Auditors' Report................................................ B-15 --
Financial Statements........................................................ B-16 --
Appendix A--Description of Ratings.......................................... A-1 --
</TABLE>
- --------------------------------------------------------------------------------
MF108B
<PAGE>
<PAGE>
GENERAL INFORMATION AND HISTORY
On February 25, 1991, Prudential-Bache Securities Inc. changed its name to
Prudential Securities Incorporated (Prudential Securities). Effective March 15,
1991, the Fund began doing business as ``Prudential MoneyMart Assets.''
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is maximum current income consistent with
stability of capital and maintenance of liquidity. This objective is pursued by
investing primarily in a portfolio of money market instruments maturing in
thirteen months or less.
Puts. The Fund may purchase instruments of the types described in its
Prospectus under ``How the Fund Invests--Investment Objective and Policies''
together with the right to resell the instruments at an agreed-upon price or
yield within a specified period prior to the maturity date of the instruments.
Such a right to resell is commonly known as a ``put,'' and the aggregate price
which the Fund pays for instruments with puts may be higher than the price which
otherwise would be paid for the instruments. Consistent with the Fund's
investment objective and applicable rules issued by the Securities and Exchange
Commission (SEC) and subject to the supervision of the Board of Directors, the
purpose of this practice is to permit the Fund to be fully invested while
preserving the necessary liquidity to meet unusually large redemptions and to
purchase at a later date securities other than those subject to the put. Puts
may be exercised prior to the expiration date in order to fund obligations to
purchase other securities or to meet redemption requests. These obligations may
arise during periods in which proceeds from sales of Fund shares and from recent
sales of portfolio securities are insufficient to meet such obligations or when
the funds available are otherwise allocated for investment. In addition, puts
may be exercised prior to the expiration date in the event the Fund's investment
adviser revises its evaluation of the creditworthiness of the issuer of the
underlying security. In determining whether to exercise puts prior to their
expiration date and in selecting which puts to exercise in such circumstances,
the Fund's investment adviser considers, among other things, the amount of cash
available to the Fund, the expiration dates of the available puts, any future
commitments for securities purchases, the yield, quality and maturity dates of
the underlying securities, alternative investment opportunities and the
desirability of retaining the underlying securities in the Fund's portfolio.
The Fund values instruments which are subject to puts at amortized cost; no
value is assigned to the put. The cost of the put, if any, is carried as an
unrealized loss from the time of purchase until it is exercised or expires.
Since the value of the put is dependent on the ability of the put writer to
meet its obligation to repurchase, the Fund's policy is to enter into put
transactions only with such brokers, dealers or financial institutions which
present minimal credit risks. There is a credit risk associated with the
purchase of puts in that the broker, dealer or financial institution might
default on its obligation to repurchase an underlying security. In the event
such a default should occur, the Fund is unable to predict whether all or any
portion of any loss sustained could subsequently be recovered from the broker,
dealer or financial institution.
The Fund will invest no more than 5% of its total assets in securities
issued by or subject to puts from the same institution. For purposes of this
limitation, unconditional puts or guarantees with respect to a security will not
be deemed to be issued by the institution providing the guarantee or put if the
value of all securities held by the Fund and issued or guaranteed by the issuer
providing the guarantee or put are limited to 10% of the Fund's total assets.
Repurchase Agreements. The Fund participates in a joint repurchase account
with other investment companies managed by Prudential Mutual Fund Management,
Inc. pursuant to an order of the SEC. 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.
Illiquid Securities. The Fund may not invest more than 10% of its total
assets in repurchase agreements which have a maturity of longer than seven days
or in other illiquid securities, including securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restrictions on resale. Securities that have legal or contractual restrictions
on resale but have a readily available market are not deemed illiquid for
purposes of this limitation. The investment adviser will monitor the liquidity
of such restricted securities subject to the supervision of the Board of
Directors. In reaching liquidity decisions, the investment adviser will
consider, inter alia, 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 (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer). Repurchase agreements subject to demand are deemed to have a
maturity equal to the notice period.
INVESTMENT RESTRICTIONS
The Fund invests primarily in money market instruments maturing in thirteen
months or less. In connection with its investment objective and policies as set
forth in the Prospectus, the Fund has adopted the following investment
restrictions, none of which may be changed without the approval of the holders
of a majority of the Fund's outstanding voting securities.
B-2
<PAGE>
<PAGE>
The Fund may not engage in any of the practices described in paragraphs
1-13 below:
1. Purchase common stock or other voting securities, preferred stock,
warrants or other equity securities.
2. Purchase any securities (other than obligations of the U.S. Government,
its agencies and instrumentalities) if as a result 25% or more of the value of
the Fund's total assets (determined at the time of investment) would be invested
in the securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to money market instruments of domestic banks, U.S. branches of foreign
banks that are subject to the same regulations as U.S. banks and foreign
branches of domestic banks (provided that the domestic bank is unconditionally
liable in the event of the failure of the foreign branch to make payment on its
instruments for any reason).
3. Purchase the securities of any one issuer, other than the U.S.
Government or its agencies and instrumentalities, if more than 5% of the value
of the Fund's total assets would be invested in securities of such issuer.
4. Make cash loans except through the purchase of debt obligations and the
entry into repurchase agreements permitted under ``Investment Objective and
Policies.'' The Fund may also engage in the practice of lending its securities
only against fully comparable collateral. See paragraph 13 below.
5. Borrow money, except from banks for temporary or emergency purposes and
then only in amounts up to 10% of the value of the Fund's net assets. This
borrowing provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate abnormally heavy redemption requests, if
they should occur, or to permit the Fund to obtain short-term credits necessary
for the settlement of transactions, and is not for investment purposes. Interest
paid on borrowings is not available for investment by the Fund. Secured
temporary borrowings may take the form of reverse repurchase agreements,
pursuant to which the Fund would sell portfolio securities for cash and
simultaneously agree to repurchase them at a specified date for the same amount
of cash plus an interest component. The SEC has issued a release requiring, in
effect, that the Fund maintain, in a segregated account with State Street Bank
and Trust Company (State Street), liquid assets equal in value to the amount
owed.
6. Mortgage, pledge or hypothecate any assets, except in an amount up to
15% of the value of the Fund's net assets, but only to secure borrowings for
temporary or emergency purposes as described in paragraph 5 above.
7. Purchase or sell real estate, real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests.
8. Act as an underwriter of securities.
9. Purchase securities on margin, except for the use of short-term credit
necessary for clearance of purchases or sales of portfolio securities, or make
short sales of securities or maintain a short position.
10. Purchase securities, other than obligations of the U.S. Government, its
agencies or instrumentalities, of any issuer having a record, together with
predecessors, of less than three years of continuous operations if, immediately
after such purchase, more than 5% of the Fund's total assets would be invested
in such securities.
11. Make investments for the purpose of exercising control or management.
12. Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization.
13. The Fund may lend its portfolio securities if such loans are secured
continuously by collateral in cash maintained on a daily basis at an amount at
least equal at all times to the market value of the securities loaned. The Fund
must maintain the right to call such loans and to obtain the securities loaned
at any time on five days' notice. During the existence of a loan, the Fund
continues to receive the equivalent of the interest paid by the issuer on the
securities loaned and also has the right to receive the interest on investment
of the cash collateral in short-term money market instruments. If the management
of the Fund determines to make securities loans, the value of the securities
loaned will not exceed 10% of the value of the Fund's total assets.
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 action is taken, 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.
Although the Fund has the right, pursuant to paragraph 6 above, to
mortgage, pledge or hypothecate in excess of 10% of its net assets, it will not
do so as a matter of operating policy, so as to comply with certain state
statutes or investment restrictions.
B-3
<PAGE>
<PAGE>
SUITABILITY FOR INVESTORS
The Fund is designed primarily to provide a convenient means of investing
short-term funds where the direct purchase of money market instruments may be
impractical, uneconomical or undesirable.
Money market instruments such as those to be purchased by the Fund are
generally available only in denominations of $100,000 or more. Frequently,
higher yields may be obtained by the purchase of instruments in blocks or
denominations of $1,000,000, $5,000,000 or more. As compared with direct
purchase, an investment in the Fund permits participation in such money market
instruments while affording the advantage of diversification and a high degree
of liquidity. Further, the Fund relieves the investor of most investment
decisions and bookkeeping problems associated with the direct purchase of money
market instruments, such as making numerous buy and sell decisions, scheduling
maturities, reinvesting income, providing for safekeeping and investing in round
lots.
Although the Fund provides the advantage of diversification, there is still
an inherent market risk due to the nature of the investment. If interest rates
decline, then yield to shareholders will also decline. If there are unusually
heavy redemption requests because of changes in interest rates or for any other
reason, the Fund may have to sell a portion of its investment portfolio at a
time when it may be disadvantageous to do so. The Fund believes that its
borrowing provision for abnormally heavy redemption requests would help to
mitigate any adverse effects and would make the sale of its portfolio securities
unlikely. When a shareholder redeems shares, it is possible that the redemption
proceeds will be less than the amount invested.
The Fund has developed special procedures to assist banks and other
institutions choosing to establish multiple accounts. Banks should consult their
legal advisers regarding state and federal laws applicable to the purchase of
Fund shares for fiduciary accounts.
CALCULATION OF YIELD
The Fund will prepare a current quotation of yield from time to time. The
yield quoted will be the simple annualized yield for an identified seven
calendar day period. The yield calculation will be based on a hypothetical
account having a balance of exactly one share at the beginning of the seven-day
period. The base period return will be the change in the value of the
hypothetical account during the seven-day period, including dividends declared
on any shares purchased with dividends on the share but excluding any capital
changes. The yield will vary as interest rates and other conditions affecting
money market instruments change. Yield also depends on the quality, length of
maturity and type of instruments in the Fund's portfolio, and its operating
expenses. The Fund may also prepare an effective annual yield computed by
compounding the unannualized seven-day period return as follows: by adding 1 to
the unannualized seven-day period return, raising the sum to a power equal to
365 divided by 7, and subtracting 1 from the result.
The Fund's 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. Actual yields will depend upon not only changes in
interest rates generally during the period in which the investment in the Fund
is held, but also on any realized or unrealized gains and losses and changes in
the Fund's expenses.
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the last five years, are shown below.
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C>
John C. Davis Chairman of the Retired (since December 1982); formerly Senior Vice
c/o Prudential Mutual Board President, Executive Department and Director of
Fund Management, Inc. and Director The Atchison, Topeka and Santa Fe Railway
One Seaport Plaza Company; Vice President and Director of Santa Fe
New York, New York Industries, Inc. (transportation and natural
10292 resources).
*William S. Field Director Chairman, Prudential Equity Investors, Inc., a
717 Fifth Avenue subsidiary of The Prudential Insurance Company of
New York, New York America (Prudential) (since 1984); Senior Vice
10022 President, Prudential (since 1979); served in
various capacities at Prudential (since 1953);
Director of Hambro America, Inc., Egghead, Inc.,
Office Mart Holdings, Simpson and Fisher, Inc.,
Director of Keystone Investment Management, Inc.,
Sunglass Hut, Inc. and Commodities Corp.
Delayne Dedrick Gold Director Marketing and Management Consultant.
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, New York
10292
</TABLE>
B-4
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C>
*Harry A. Jacobs, Jr. Director Interim Chairman and Chief Executive Officer (June
One Seaport Plaza 1993-October 1993) of Prudential Mutual Fund
New York, New York Management, Inc. (PMF); Senior Director of
10292 Prudential Securities (since January 1986);
formerly Chairman of the Board and Chief
Executive Officer of Bache Group Inc.
(1977-1982); formerly Chairman of the Board of
Prudential-Bache Securities Inc. (1982-1985);
Director of The First Australia Fund, Inc., The
First Australia Prime Income Fund, Inc., The
Global Government Plus Fund, Inc., The Global
Yield Fund, Inc. and the Center for National
Policy; Trustee of The Trudeau Institute.
*Lawrence C. McQuade President and Vice Chairman of PMF (since 1988); Managing
One Seaport Plaza Director Director, Investment Banking, Prudential
New York, New York 10292 Securities (1988-1991); Director of Quixote
Corporation (since February 1992) and BUNZL, PLC
(since June 1991); formerly Director of Crazy
Eddie Inc. (1987-1990)and Kaiser Tech., Ltd. and,
Kaiser Aluminum and Chemical Corp. (March
1987-November 1988); formerly Executive Vice
President and Director of W.R. Grace & Co.
(1975-1987); President and Director of The Global
Government Plus Fund, Inc., The Global Yield
Fund, Inc. and The High Yield Income Fund Inc.
Thomas A. Owens, Jr. Director Consultant; Director of EMCORE Corp. (manufacturer
c/o Prudential Mutual of electronic materials).
Fund Management, Inc.
One Seaport Plaza
New York, New York
10292
*Richard A. Redeker Director President, Chief Executive Officer and Director
One Seaport Plaza (since October 1993), PMF; Director and Member of
New York, New York 10292 the Operating Committee (since October 1993),
Prudential Securities Incorporated (Prudential
Securities); Director (since October 1993) of
Prudential Securities Group, Inc.; formerly
Senior Executive Vice President and Director of
Kemper Financial Services, Inc. (September
1978-September 1993); Director of The Global
Government Plus Fund, Inc. and The High Yield
Income Fund, Inc.
Robert J. Schultz Director Retired (since January 1987); formerly Financial
c/o Prudential Mutual Vice President, Commonwealth Edison Company
Fund Management, Inc. (electric power company).
One Seaport Plaza
New York, New York
10292
*Sidney M. Spielvogel Director Vice President (since January 1992) of Reich & Co.,
c/o Prudential Mutual Inc.; Vice President (March 1988-January 1992) of
Fund Management, Inc. Josephthal & Co. Inc.; formerly Managing
One Seaport Plaza Director, Corporate Finance (January 1986-January
New York, New York 1988) of Prudential Securities; prior thereto,
10292 Senior Vice President (more than five years) of
Prudential Securities; Director of Supreme
Equipment & Systems Corporation.
Nancy H. Teeters Director Economist; formerly Vice President and Chief
c/o Prudential Mutual Economist (March 1986-June 1990) of International
Fund Management, Inc. Business Machines Corporation; Member of the
One Seaport Plaza Board of Governors of the Horace H. Rackham
New York, New York School of Graduate Studies of the University of
10292 Michigan; Director of Inland Steel Corporation
(since July 1991), Global Utility Fund, Inc., The
First Financial Fund, Inc. and The Global Yield
Fund, Inc.
</TABLE>
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<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C>
Robert H. Wellington Director Retired Chairman and Chief Executive Officer (since
c/o Prudential Mutual September 1990), Active Chairman and CEO
Fund Management, Inc. (1988-September 1990), President and Chief
One Seaport Plaza Executive Officer (1981-1988), AMSTED Industries
New York, New York 10292 Incorporated (diversified manufacturer of
railroad, construction and building and
industrial products); Director of AMSTED
Industries Incorporated, Central Corporation,
L.E. Meyers, Co., and DeSoto Inc.
Robert F. Gunia Vice President Chief Administrative Officer (since July 1990),
One Seaport Plaza Director (since January 1989), Executive Vice
New York, New York 10292 President, Treasurer and Chief Financial Officer
(since June 1987) of PMF; Senior Vice President
(since March 1987) of Prudential Securities; Vice
President and Director of The Asia Pacific Fund,
Inc. (since May 1989).
S. Jane Rose Secretary Senior Vice President (since January 1991), Senior
One Seaport Plaza Counsel (since June 1987) and First Vice
New York, New York 10292 President (June 1987-December 1990) of PMF;
Senior Vice President and Senior Counsel (since
July 1992) of Prudential Securities; formerly
Vice President and Associate General Counsel of
Prudential Securities.
Susan C. Cote Treasurer Senior Vice President of PMF; Senior Vice President
One Seaport Plaza (since January 1992) and Vice President (January
New York, New York 10292 1986-December 1991) of Prudential Securities.
Deborah A. Docs Assistant Secretary Vice President (since January 1993), Associate Vice
One Seaport Plaza President (January 1990-December 1992), Assistant
New York, New York 10292 General Counsel (since November 1991), Assistant
Vice President (January 1989-December 1989) and
Legal Associate (1987-1991) of PMF; Vice
President (since January 1993), Associate Vice
President (January 1992-December 1992) and
Assistant General Counsel (since January 1992) of
Prudential Securities.
- ---------------
* ``Interested'' Director, as defined in the Investment Company Act of 1940, as amended (Investment
Company Act), by reason of his affiliation with PMF, Prudential Securities, Prudential or a
broker-dealer.
</TABLE>
Directors and officers of the Fund are also trustees, directors and
officers of some or all of the other investment companies distributed by
Prudential Securities or Prudential Mutual Fund Distributors, Inc.
The officers conduct and supervise the daily business operations of the
Fund, while the Directors, in addition to their functions set forth under
``Manager'' and ``Distributor,'' review such actions and decide on general
policy.
Mr. Davis receives his Director's fee pursuant to a deferrred fee agreement
with the Fund. Under the terms of the agreement, the Fund accrues daily the
amount of such Director's 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 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 Director. The Fund's obligation to
make payments of deferred Directors' fees, together with interest thereon, is a
general obligation of the Fund.
Each Director who is not an affiliated person of PMF or The Prudential
Investment Corporation (PIC) currently receives $10,000 as an annual Director's
fee, plus expenses, and $1,000 plus expenses for service on each Board
committee. The Chairman of the Board receives an additional $1,000 per year. An
aggregate of approximately $97,000 in fees was paid by the Fund to such
Directors as a group for 1993.
As of January 31, 1994, the Directors and officers of the Fund, as a group,
beneficially owned less than one percent of the outstanding Common Stock of the
Fund.
As of January 31, 1994, Prudential Securities held, solely of record on
behalf of other persons, 7,363,589,907 shares of the Fund's Common Stock,
representing approximately 96% of the shares then outstanding. Prudential
Securities had the sole power to vote 72,670,424.46 shares held as of January
31, 1993 for the benefit of participating employees of Prudential Securities in
the Prudential Securities 401(k) Plan, representing about 1% of the shares then
outstanding.
B-6
<PAGE>
<PAGE>
MANAGER
The manager of the Fund is Prudential Mutual Fund Management, Inc. (PMF or
the Manager), One Seaport Plaza, New York, New York 10292. PMF serves as manager
to all of the other investment companies that, together with the Fund, comprise
the ``Prudential Mutual Funds.'' See ``How the Fund Is Managed--Manager'' in the
Prospectus. As of January 31, 1994, PMF managed and/or administered open-end and
closed-end management investment companies with assets of approximately
$51billion and, according to the Investment Company Institute, the Prudential
Mutual Funds were the 11th largest family of mutual funds in the United States.
For its services, PMF receives, pursuant to a management agreement (the
Management Agreement), a fee at an annual rate of .50 of 1% of the Fund's
average daily net assets up to $50 million and .30 of 1% of the Fund's average
daily net assets in excess of $50 million. The fee is computed daily and payable
monthly. The Management Agreement also provides that in the event the expenses
of the Fund (including the fees of the Manager, but excluding interest, taxes,
brokerage commissions, distribution fees and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Fund's business) for any fiscal year exceed the lowest applicable annual
expense limitation established and enforced pursuant to the statutes or
regulations of any jurisdiction in which shares of the Fund are then qualified
for offer and sale, the Manager will reduce its fee by the amount of such
excess. Expenses in excess of the total compensation payable to PMF will be paid
by PMF. Any such reductions of payments are subject to readjustment during the
year. Currently, the Fund believes that the most restrictive expense limitation
of state securities commissions is 2 1/2% of the Fund's average daily net assets
up to $30 million, 2% of the next $70 million of such assets and 1 1/2% of such
assets in excess of $100 million.
In connection with its management of the corporate affairs of the Fund, PMF
bears the following expenses:
(a) the salaries and expenses of all personnel of the Fund and the
Manager, except the fees and expenses of Directors who
are not affiliated persons of the Manager or the Fund's investment adviser;
(b) all expenses incurred by the Manager 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 PIC pursuant to the subadvisory
agreement between PMF and PIC (the Subadvisory
Agreement).
Under the terms of the Management Agreement, the Fund is responsible for
the payment of the following expenses, including (a) the fees payable to the
Manager, (b) the fees and expenses of Directors who are not affiliated with PMF
or the Fund's investment adviser, (c) the fees and certain expenses of the
Fund's Custodian and Transfer and Dividend Disbursing 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 fees and charges of the Fund's legal counsel and independent accountants,
(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
association of which the Fund is a member, (h) the cost of stock certificates
representing shares of the Fund, (i) the cost of fidelity and liability
insurance, (j) the fees and expenses involved in registering and maintaining
registration of the Fund and of its shares with the SEC and registering the Fund
as a broker or dealer and qualifying its shares under state securities laws,
including the preparation and printing of the Fund's registration statements and
prospectuses for such purposes, (k) allocable communications expenses with
respect to investor services and all expenses of shareholders' and Directors'
meetings and of preparing, printing and mailing reports, proxy statements and
prospectuses to shareholders, (l) litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business, and (m) distribution expenses.
The Management Agreement also provides that PMF 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
a breach of fiduciary duty with respect to the receipt of compensation for
services or 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 provides that it 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
accordance with the requirements of the Investment Company Act.
The Management Agreement was last approved by the Board of Directors of the
Fund, including a majority of the Directors who are not parties to such contract
or interested persons of such parties (as defined in the Investment Company
Act), on May 12, 1993, and was approved by shareholders of the Fund on April 27,
1988.
For the fiscal years ended December 31, 1993, 1992 and 1991, PMF received
net management fees of $23,332,701, $21,422,436, and $23,158,839, respectively.
PMF has entered into the Subadvisory Agreement with PIC, a wholly-owned
subsidiary of Prudential. The Subadvisory Agreement provides that PIC furnish
investment advisory services in connection with the management of the Fund. In
connection therewith, PIC is
B-7
<PAGE>
<PAGE>
obligated to keep certain books and records of the Fund. PMF continues to have
responsibility for all investment advisory services pursuant to the Management
Agreement and supervises PIC's performance of such services. PIC is reimbursed
by PMF for the reasonable costs and expenses incurred by PIC in furnishing those
services.
The Subadviser maintains a corporate credit unit which provides credit
analysis and research on taxable fixed-income securities including money market
instruments. The portfolio manager consults routinely with the credit unit in
managing the Fund's portfolio. The credit unit, which currently maintains a
staff of 17 persons including 12 credit analysts, reviews on an ongoing basis
commercial paper issuers, commercial banks, non-bank financial institutions and
issuers of other taxable fixed-income obligations. Credit analysts have broad
access to research and financial reports, data retrieval services and industry
analysts. They maintain relationships with the management of corporate issuers
and from time to time visit companies in whose securities the Fund may invest.
The Subadvisory Agreement was last approved by the Board of Directors,
including a majority of the Directors who are not parties to such contract or
interested persons of such parties, as defined in the Investment Company Act, on
May 12, 1993, and was approved by shareholders of the Fund on April 27, 1988.
The Subadvisory Agreement provides that it will terminate in the event of
its assignment (as defined in the Investment Company Act) or upon the
termination of the Management Agreement. The Subadvisory Agreement may be
terminated by the Fund, PMF or PIC upon not less than 30 days' or more than 60
days' written notice. The Subadvisory Agreement provides that it will continue
in effect for a period of more than two years from its execution only so long as
such continuance is specifically approved by the Board of Directors at least
annually in accordance with the requirements of the Investment Company Act.
DISTRIBUTOR
Prudential Mutual Fund Distributors, Inc. (PMFD), One Seaport Plaza, New
York, New York 10292, acts as the Fund's distributor.
Plan of Distribution
See ``How the Fund Is Managed--Distributor'' in the Prospectus.
Under the Fund's Plan of Distribution and the Distribution Agreement with
PMFD, the Fund pays PMFD, as distributor, a distribution fee of up to 0.125% of
the average daily net assets of the Fund, computed daily and payable monthly, to
reimburse PMFD for distribution expenses.
For the fiscal year ended December 31, 1993, PMFD incurred distribution
expenses in the aggregate of $9,678,736, all of which was recovered through the
distribution fee paid by the Fund.
It is estimated that of this amount, 1.1% ($102,220) was spent on printing
and mailing of prospectuses to other than current shareholders and 98.9%
($9,576,516) on (i) the aggregate of (i) account servicing fee credits to
Prudential Securities branch offices for payments of account servicing fees to
account executives (80.0% or $7,742,902) and (ii) an allocation of overhead and
other branch office distribution-related expenses (18.9% or $1,833,614). The
term ``overhead and other branch office distribution-related expenses''
represents (a) the expenses of operating branch offices of Prudential Securities
and Pruco Securities Corporation (Prusec), affiliated broker-dealers, in
connection with the sale of Fund shares, including lease costs, the salaries and
employee benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies, (b) the costs of
client sales seminars, (c) travel expenses of mutual fund sales coordinators to
promote the sale of Fund shares and (d) other incidental expenses relating to
branch promotion of Fund sales. No interest or carrying charges are included as
part of the Fund's distribution expenses.
Pursuant to Rule 12b-1 under the Investment Company Act, the Plan of
Distribution was last approved by the Board of Directors, including a majority
of the Directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan, cast in person at a meeting called for the
purpose of voting on the Plan, on May 12, 1993. The Plan of Distribution was
approved by a majority of the Fund's outstanding voting securities on April 27,
1988.
The Plan continues in effect from year to year, provided that each such
continuance is approved at least annually by a vote of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan, cast in person at a meeting called
for the purpose of voting on such continuance. The Plan may be terminated at any
time, without penalty, by the vote of a majority of the Directors who are not
interested persons or by the vote of the holders of a majority of the
outstanding voting securities of the Fund on not more than 30 days' written
notice to any other party to the Plan. The Plan may not be amended to increase
materially the amounts to be spent by the Fund thereunder without shareholder
approval, and all material amendments are required to be approved by the Board
of Directors in the manner described above. The Plan will automatically
terminate in the event of its assignment.
Pursuant to the Plan, Directors are provided with, and they receive, at
least quarterly a written report of the distribution expenses incurred on behalf
of the Fund by PMFD. The report includes an itemization of the distribution
expenses and the purpose of such
B-8
<PAGE>
<PAGE>
expenditures. In addition, as long as the Plan remains in effect, the selection
and nomination of Directors who are not interested persons of the Fund shall be
committed to the Directors who are not interested persons of the Fund.
Pursuant to the Distribution Agreement, the Fund has agreed to indemnify
PMFD to the extent permitted by applicable law against certain liabilities under
the Securities Act of 1933, as amended. The Distribution Agreement was last
approved by the Board of Directors, including a majority of the Directors who
are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan, on May 12, 1993.
PURCHASE AND REDEMPTION OF FUND SHARES
Purchase of Shares
The Fund reserves the right to reject any initial or subsequent purchase
order (including an exchange) and the right to limit investments in the Fund
solely to existing or past shareholders of the Fund.
Reopening an Account
Subject to the minimum investment restrictions, an investor may reopen an
account, without filing a new Application Form, at any time during the calendar
year the account is closed, provided that the information on the old form is
still applicable.
Redemption of Shares
Investors who purchase shares directly from Prudential Mutual Fund
Services, Inc. (PMFS or the Transfer Agent) may use the following procedures:
Check Redemption. At a shareholder's request, State Street will establish a
personal checking account for the shareholder. Checks drawn on this account can
be made payable to the order of any person in any amount equal to or greater
than $500. The payee of the check may cash or deposit it like any other check
drawn on a bank. When such a check is presented to State Street for payment,
State Street presents the check to the Fund as authority to redeem a sufficient
number of shares in a shareholder's account in the Fund to cover the amount of
the check. This enables the shareholder to continue earning daily dividends
until the check is cleared. Canceled checks are returned to the shareholder by
State Street.
Shareholders are subject to State Street's rules and regulations governing
checking accounts, including the right of State Street not to honor checks in
amounts exceeding the value of the shareholder's account at the time the check
is presented for payment.
Shares for which certificates have been issued are not available for
redemption to cover checks. A shareholder should be certain that adequate shares
for which certificates have not been issued are in his or her account to cover
the amount of the check. See ``Shareholder Guide--How to Sell Your Shares'' in
the Prospectus. Since the dollar value of an account is constantly changing, it
is not possible for a shareholder to determine in advance the total value of his
or her account so as to write a check for the redemption of the entire account.
The Fund reserves the right to assess a service charge, payable to State
Street Bank and Trust Company, to establish a checking account and to order
checks. State Street, PMFS and the Fund have reserved the right to modify this
checking account privilege or to place a charge for each check presented for
payment for any individual account or for all accounts in the future.
The Fund, PMFS or State Street may terminate Check Redemption at any time
upon 30 days' notice to participating shareholders. To receive further
information, contact Prudential Mutual Fund Services, Inc., Attention:
Redemption Services, P.O. Box 15010, New Brunswick, New Jersey 08906-5010, or
telephone (800) 225-1852 (toll-free). Check Redemption is not available to
investors for whom Prudential Securities has purchased shares.
Expedited Redemption. In order to use Expedited Redemption, a shareholder
may so designate at the time the initial Application Form is filed or at a later
date. Once the Expedited Redemption authorization form has been completed, the
signature(s) on the authorization form guaranteed as set forth below and the
form returned to PMFS, requests for redemption may be made by telegraph, letter
or telephone. A signature guarantee is not required under Expedited Redemption
once the authorization form is properly completed and returned. The Expedited
Redemption privilege may be used only to redeem shares in an amount of $200 or
more, except that, if an account for which Expedited Redemption is requested has
a net asset value of less than $200, the entire account must be redeemed. The
proceeds of redeemed shares in the amount of $1,000 or more are transmitted by
wire to the shareholder's account at a domestic commercial bank which is a
member of the Federal Reserve System. Proceeds of less than $1,000 are forwarded
by check to the shareholder's designated bank account. See ``Shareholder
Guide--How to Sell Your Shares'' in the Prospectus.
To request Expedited Redemption by telephone, a shareholder should call
PMFS at (800) 225-1852. Calls must be received by PMFS before 4:30 P.M., New
York time, in order for the redemption to be effective on that day. Requests by
letter should be addressed to Prudential Mutual Fund Services, Inc., Attention:
Account Maintenance, P.O. Box 15015, New Brunswick, New Jersey 08906-5015.
B-9
<PAGE>
<PAGE>
In order to change the name of the commercial bank or account designated to
receive redemption proceeds, it is necessary to execute a new Expedited
Redemption authorization form and submit it to PMFS at the address set forth
above. Each signature must be guaranteed by an ``eligible guarantor
institution,'' which 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. Guarantees
must be signed by an authorized signatory of the eligible guarantor institution,
and ``Signature Guaranteed'' should appear with the signature. For clients of
Prusec signature guarantees may be obtained from the agency or office manager of
most Prudential Insurance and Financial Services or Prudential Preferred
Financial Services offices. PMFS may request further documentation from
corporations, executors, administrators, trustees or guardians.
Regular Redemption. Shareholders may redeem their shares by sending to
Prudential Mutual Fund Services, Inc., Attention: Redemption Services, P.O. Box
15010, New Brunswick, New Jersey 08906-5010, a written request, accompanied by
duly endorsed stock certificates, if issued. In this case, all stock
certificates and all written requests for redemption must be endorsed by the
shareholder with the signature guaranteed, as described above. PMFS may request
further documentation from corporations, executors, administrators, trustees or
guardians. Regular redemption is made by check mailed to the shareholder's
address.
SHAREHOLDER INVESTMENT ACCOUNT
Upon the initial purchase of shares of the Fund, a Shareholder Investment
Account is established for each investor under which a record of the shares held
is maintained by the Transfer Agent. If a stock 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. Whenever a transaction
takes place in the Shareholder Investment Account, the shareholder will be
mailed a statement showing the transaction and the status of such account.
Procedure for Multiple Accounts
Special procedures have been designed for banks and other institutions that
wish to open multiple accounts. An institution may open a single master account
by filing an Application and Order Form with PMFS, signed by personnel
authorized to act for the institution. Individual sub-accounts may be opened at
the time the master account is opened by listing them, or they may be added at a
later date by written advice or by filing forms supplied by PMFS. Procedures are
available to identify sub-accounts by name and number within the master account
name. The investment minimums described in the Prospectus under ``Shareholder
Guide--How to Buy Shares of the Fund'' are applicable to the aggregate amounts
invested by a group, and not to the amount credited to each sub-account.
PMFS provides each institution with a written confirmation for each
transaction in a sub-account and, on a monthly basis, with a statement which
sets forth for each master account its share balance and income earned for the
month. In addition, each institution receives a statement for each individual
account setting forth transactions in the sub-account for the year-to-date, the
total number of shares owned as of the dividend payment date and the dividends
paid for the current month, as well as for the year-to-date. For further
information on the sub-accounting system and procedures, contact PMFS.
Exchange Privilege
The Fund makes available to its shareholders the privilege of exchanging
their shares for shares of certain other Prudential Mutual Funds, including one
or more specified money market funds, subject in each case to the minimum
investment requirements of such funds. Class A shares of such other Prudential
Mutual Funds may also be exchanged for shares of the Fund. All exchanges are
made on the basis of relative net asset value next determined after receipt of
an order in proper form and any applicable sales charge. An exchange will be
treated as a redemption and purchase for tax purposes. Shares may be exchanged
for shares of another fund only if shares of such fund may legally be sold under
applicable state laws.
It is contemplated that the exchange privilege may be applicable to new
mutual funds whose shares may be distributed by the Distributor.
Shareholders of the Fund may exchange their shares for Class A shares of
the Prudential Mutual Funds and shares of the money market funds specified
below.
The following other money market funds participate in the Class A Exchange
Privilege:
Prudential California Municipal Fund
(California Money Market Series)
Prudential Government Securities Trust
(Money Market Series)
(U.S. Treasury Money Market Series)
B-10
<PAGE>
<PAGE>
Prudential Municipal Series Fund
(Connecticut Money Market Series)
(Massachusetts Money Market Series)
(New Jersey Money Market Series)
(New York Money Market Series)
Prudential Tax-Free Money Fund
Shareholders of the Fund may not exchange their shares for Class B shares
of the Prudential Mutual Funds or shares of Prudential Special Money Market
Fund, a money market fund, except that shares acquired prior to January 22, 1990
subject to a contingent deferred sales charge can be exchanged for Class B
shares.
Additional details about the Exchange Privilege and prospectuses for each
of the Prudential Mutual Funds are available from the Fund's Transfer Agent,
Prudential Securities or Prusec. The Exchange Privilege may be modified,
terminated or suspended on sixty days' notice, and any fund, including the Fund,
or the Distributor, has the right to reject any exchange application relating to
such fund's shares.
Automatic Savings Accumulation Plan (ASAP)
Under ASAP, 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
Prudential Securities Account (including a Command 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 ASAP participants.
Further details about this program and an application form are available
from the Transfer Agent, Prudential Securities or Prusec.
Systematic Withdrawal Plan
A systematic withdrawal plan is available for shareholders having shares of
the Fund held through Prudential Securities or the Transfer Agent. 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.
In the case of shares held through the Transfer Agent (i) a $10,000 minimum
account value applies, (ii) withdrawals may not be for less than $100 and (iii)
the shareholder must elect to have all dividends and/or distributions
automatically reinvested in additional full and fractional shares of the
applicable series at net asset value of shares held under this plan. See
``Shareholder Investment Account-- Automatic Reinvestment of Dividends and
Distributions.''
Prudential Securities and the Transfer Agent act as agents for the
shareholder in redeeming sufficient full and fractional shares to provide the
amount of the periodic withdrawal payment. The 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. 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 Plans
Various tax-deferred retirement plans, including a 401(k) plan,
self-directed individual retirement accounts and ``tax-sheltered accounts''
under Section 403(b)(7) of the Internal Revenue Code are available through the
Distributor. These plans are for use by both self-employed individuals and
corporate employers. These plans permit either self-direction of accounts by
participants, or a pooled account arrangement. Information regarding the
establishment of these plans, the administration, custodial fees and other
details are available from Prudential Securities or the Transfer Agent.
Investors who are considering the adoption of such a plan should consult
with their own legal counsel or tax adviser with respect to the establishment
and maintenance of any such 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 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.
B-11
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Tax-Deferred Compounding1
<S> <C> <C>
Contributions Personal
Made Over: Savings IRA
- -------------- --------- ---------
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
the IRA account will be subject to tax when withdrawn from the account.
DIVIDENDS
The Fund's net income is declared as dividends daily and is automatically
reinvested monthly in additional shares of the Fund unless the shareholder
elects in writing not less than five full business days prior to the payable
date to receive such distribution in cash. The dividend payment date is
generally on or about the 25th day of each month although the Fund reserves the
right to change this date without further notice to the shareholders. The Fund
endeavors to maintain its net asset value at $1.00 per share. As a result of a
significant expense or realized loss, it is possible that the Fund's net asset
value may fall below $1.00 per share. Should the Fund incur or anticipate any
unusual or unexpected significant expense or loss which would disproportionately
affect the Fund's income for a particular period, the Board of Directors at that
time would consider whether to adhere to the present dividend policy described
in the Prospectus or to revise it in light of the then prevailing circumstances
in order to ameliorate to the extent possible the disproportionate effect of
such expense or loss on then existing shareholders. Such expenses or losses may
nevertheless result in a shareholder's receiving no dividends for the period
during which he or she held shares of the Fund and in his or her receiving a
price per share upon redemption lower than that which he or she paid.
Dividends derived from interest received by the Fund on portfolio
securities, together with distributions of any net short-term capital gains, are
taxable to the shareholders as ordinary income. Distributions of net long-term
capital gains are taxed to the shareholders at capital gains rates regardless of
the length of their holding period of Fund shares. However, the Fund's portfolio
generally will be managed in such a way as not to realize any net long-term
capital gains. Dividends and distributions are taxable to shareholders even if
reinvested in additional shares.
NET ASSET VALUE
The Fund uses the amortized cost method of valuation to determine the value
of its portfolio securities. In that regard, the Fund's Board of Directors has
determined to maintain a dollar-weighted average portfolio maturity of 90 days
or less, to purchase only instruments having remaining maturities of thirteen
months or less, and to invest only in securities determined by the Manager or
the Subadviser, under the direction of the Board of Directors, to be of minimal
credit risk and of eligible quality. Subject to the Fund's compliance with the
conditions of applicable rules promulgated by the SEC relating to the amortized
cost method of valuation, the remaining maturity of an instrument held by the
Fund that is subject to a put is deemed to be the period remaining until the
principal amount can be recovered through demand or, in the case of a variable
rate instrument, the next interest reset date, if longer. The value assigned to
the put is zero. The Board of Directors also has established procedures designed
to stabilize, to the extent reasonably possible, the Fund's price per share as
computed for the purpose of sales and redemptions at $1.00. Such procedures will
include review of the Fund's portfolio holdings by the Board, at such intervals
as deemed appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations deviates from $1.00 per share
based on amortized cost. The extent of any deviation will be examined by the
Board, and if such deviation exceeds 1/2 of 1%, the Board will promptly consider
what action, if any, will be initiated. In the event the Board of Directors
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, the Board will take
such corrective action as it regards necessary and appropriate, including the
sale of portfolio instruments prior to maturity to realize gains or losses, the
shortening of average portfolio maturity, the withholding of dividends or the
establishment of net asset value per share by using available market quotations.
PORTFOLIO TRANSACTIONS
The Manager is responsible for decisions to buy and sell securities for the
Fund, the selection of brokers and dealers to effect the transactions and the
negotiation of brokerage commissions, if any. For purposes of this section the
term ``Manager'' includes the Subadviser. The Fund does not normally incur any
brokerage commission expense on such transactions. In the market for money
market
B-12
<PAGE>
<PAGE>
instruments, 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 may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
In placing orders for portfolio securities of the Fund, the Manager is
required to give primary consideration to obtaining the most favorable price and
efficient execution. This means that the Manager will seek to execute each
transaction at a price and commission, if any, which provide the most favorable
total cost or proceeds reasonably attainable under the circumstances. While the
Manager generally seeks reasonably competitive spreads or commissions, the Fund
will not necessarily be paying the lowest spread or commission available. Within
the framework of this policy, the Manager may consider research and investment
services provided by brokers or dealers who effect or are parties to portfolio
transactions of the Fund, the Manager or the Manager's other clients. Such
research and investment services are those which brokerage houses customarily
provide to institutional investors and include statistical and economic data and
research reports on particular companies and industries. Such services are used
by the Manager in connection with all of its investment activities, and some of
such services obtained in connection with the execution of transactions for the
Fund may be used in managing other investment accounts. Conversely, brokers
furnishing such services may be selected for the execution of transactions of
such other accounts, whose aggregate assets are far larger than those of the
Fund, and the services furnished by such brokers may be used by the Manager in
providing investment management for the Fund. While such services are useful and
important in supplementing its own research and facilities, the Manager believes
that the value of such services is not determinable and does not significantly
reduce expenses. The Fund does not reduce the fee it pays to the Manager by any
amount that may be attributed to the value of such services. The Fund will not
effect any securities transactions with or through Prudential Securities as
broker or dealer. The Fund paid no brokerage commissions for the fiscal years
ended December 31, 1993, 1992 and 1991.
TAXES
Federal
The Fund has elected to qualify, and intends to remain qualified, as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the Internal Revenue Code). This relieves the Fund (but not
its shareholders) from paying federal income tax on income which is distributed
to shareholders. Qualification of the Fund as a regulated investment company
requires, among other things, that (a) at least 90% of the Fund's annual gross
income (without reduction for losses from the sale or other disposition of
securities) be derived from dividends, interest, proceeds from loans of
securities and gains from the sale or other disposition of securities, options
thereon, futures contracts, options thereon, forward contracts and foreign
currencies; (b) the Fund derives less than 30% of its gross income from gains
(without reduction for losses) from the sale or other disposition of securities,
options thereon, futures contracts, options thereon, forward contracts and
foreign currencies held for less than three months and (c) the Fund diversifies
its holdings so that, at the end of each quarter of the taxable year, (i) at
least 50% of the market value of its 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 assets of the Fund and 10% of the
outstanding voting securities of such issuer, and (ii) 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). In addition, in order not to be subject to federal
income tax, the Fund must distribute to its shareholders at least 90% of its net
investment income including short-term capital gains.
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. Other gains or losses on the sale of securities will be
short-term capital gains or losses. In addition, debt securities acquired by the
Fund may be subject to original issue discount and market discount rules.
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
twelve months ending on October 31 of such calendar year, as well as 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 year,
respectively. To the extent it does not meet these distribution requirements,
the Fund will be subject to a non-deductible 4% excise tax on the undistributed
amount. The Fund intends to distribute its income and capital gains in the
manner necessary to avoid imposition of the 4% excise tax. For purposes of this
excise tax, income on which the Fund pays income tax is treated as distributed.
Distributions of net investment income and of the excess of net short-term
capital gains over net long-term capital losses will be taxable to the
shareholder at ordinary income rates regardless of whether the shareholder
receives such distributions in additional shares or cash. Distributions of net
capital gains (i.e., the excess of net long-term capital gains over net
short-term capital losses), if any, are taxable as long-term capital gains
regardless of how long the investor has held his or her shares. However, if a
shareholder holds shares in the Fund for not more than six months, then any loss
recognized on the sale of such shares will be treated as long-term capital
B-13
<PAGE>
<PAGE>
loss to the extent of any distribution on the shares which was treated as
long-term capital gain. Because none of the Fund's net income is anticipated to
arise from dividends on common or preferred stock, none of its distributions to
shareholders will be eligible for the dividends received deduction for
corporations under the Internal Revenue Code. Shareholders will be notified
annually by the Fund as to the federal tax status of distributions made by the
Fund.
Any gain or loss realized upon a sale or redemption of shares by a
shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held more than one year and
otherwise as short-term capital gain or loss. Any such loss, however, although
otherwise treated as a short-term capital loss, will be treated as long-term
capital loss to the extent of any net long-term capital gain distributions
received by the shareholder, if the shares have been held for six months or
less.
A shareholder may realize a gain or loss on the redemption of his or her
shares depending upon the net asset value when redeemed. The Fund, however,
intends to maintain a constant net asset value.
In general, tax-exempt shareholders will not be required to pay taxes on
amounts distributed to them. If such shareholders incurred debt in order to
acquire or hold their shares in the Fund, amounts distributed to them may be
subject to the unrelated business income tax.
State and Local
Under the laws of certain states, distributions of net income may be
taxable to shareholders as income even though a portion of such distributions
may be derived from interest on U.S. Government obligations which, if realized
directly, would be exempt from state income taxes. Shareholders are advised to
consult their tax advisers concerning the application of state and local taxes.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT ACCOUNTANTS
State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities and
cash, and in that capacity maintains certain financial and accounting books and
records pursuant to an agreement with the Fund.
Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison,
New Jersey 08818, serves as Transfer and Dividend Disbursing Agent and in those
capacities maintains certain books and records for the Fund. PMFS is a
wholly-owned subsidiary of PMF. 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, a new account
set-up fee for each manually established account and a monthly inactive zero
balance account fee per shareholder account. PMFS is also reimbursed for its
out-of-pocket expense, including but not limited to postage, stationery,
printing, allocable communications expenses and other costs. For the fiscal year
ended December 31, 1993, the Fund incurred fees of approximately $15,961,000 for
such services. As of December 31, 1993, approximately $1,325,000 of such fees
were due to PMFS.
Deloitte & Touche, 1633 Broadway, New York, NY 10019, serves as the Fund's
independent public accountants and, in this capacity, audits the Fund's annual
financial statements.
B-14
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
Prudential MoneyMart Assets
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Prudential MoneyMart Assets, as of December 31,
1993, the related statements of operations for the year then ended and of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
December 31, 1993 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential MoneyMart
Assets as of December 31, 1993, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods
in conformity with generally accepted accounting principles.
Deloitte & Touche
New York, New York
February 2, 1994
B-15
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(In thousands) Description (Note 1)
<C> <S> <C>
ASSET BACKED SECURITIES--1.4%
Capital Auto Receivables Asset Trust
$ 11,250 3.30%, 10/15/94............ $ 11,247,189
Case Equipment Loan Trust
4,495 3.25%, 5/15/94............. 4,494,702
Money Market Auto Loan Trust
86,450 3.54%, 1/18/94............. 86,450,000
--------------
Total Asset Backed
Securities
(amortized cost
$102,191,891)............ 102,191,891
--------------
BANK HOLDING COMPANY--1.8%
Bankers Trust New York Corp.
5,000 3.33%, 2/15/94............. 4,979,188
10,000 3.35%, 2/18/94............. 9,955,333
32,000 3.22%, 3/23/94............. 31,768,160
KeyCorp
1,246 3.55%, 1/3/94.............. 1,245,754
NationsBank Corp.
71,000 3.34%, 2/11/94............. 70,729,924
15,000 3.28%, 5/9/94.............. 14,825,067
--------------
Total Bank Holding Company
(amortized cost
$133,503,426)............ 133,503,426
--------------
BANK NOTES--2.7%
Bank of New York
10,000 3.50%, 2/3/94.............. 10,000,015
Bank of New York (Delaware)
32,000 3.60%, 6/30/94............. 31,974,467
Northern Trust Co.
17,000 3.63%, 6/9/94.............. 16,985,525
PNC Bank, Louisville
84,000 3.23%, 4/29/94............. 83,962,174
Society National Bank of Cleveland
39,000 3.35%, 3/10/94............. 38,991,411
12,900 3.25%, 4/21/94............. 12,883,834
--------------
Total Bank Notes
(amortized cost
$194,797,426)............ 194,797,426
--------------
CERTIFICATES OF DEPOSIT--
CANADA--2.6%
Bank of Nova Scotia
$ 93,000 3.38%, 1/28/94............. $ 93,000,000
100,000 3.25%, 1/31/94............. 100,000,000
--------------
Total Certificates of Deposit--Canada
(amortized cost
$193,000,000)............ 193,000,000
--------------
CERTIFICATES OF DEPOSIT--
EURODOLLAR--3.0%
Sanwa Bank, Ltd.
40,000 3.32%, 1/26/94............. 39,995,953
50,000 3.29%, 1/31/94............. 49,999,526
Sumitomo Bank, Ltd.
37,000 3.32%, 1/25/94............. 36,999,626
68,000 3.33%, 1/26/94............. 67,994,243
22,000 3.40%, 2/4/94.............. 22,000,000
--------------
Total Certificates of Deposit--Eurodollar
(amortized cost
$216,989,348)............ 216,989,348
--------------
CERTIFICATES OF DEPOSIT--
YANKEE--8.0%
ABN Amro Bank N.V.
50,000 3.20%, 3/31/94............. 49,977,414
24,000 3.24%, 3/31/94............. 23,991,492
Banque Francaise Commerce
84,000 3.37%, 3/1/94.............. 84,000,000
Banque Nationale De Paris
17,000 3.33%, 4/27/94............. 16,994,540
Dai-Ichi Kangyo Bank, Ltd.
13,000 3.45%, 2/7/94.............. 13,000,132
Sanwa Bank, Ltd.
15,000 3.35%, 1/27/94............. 14,998,898
Societe Generale Bank
384,000 3.38%, 3/2/94.............. 384,000,000
--------------
Total Certificates of Deposit--Yankee
(amortized cost
$586,962,476)............ 586,962,476
--------------
</TABLE>
B-16 See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(In thousands) Description (Note 1)
<C> <S> <C>
Commercial Paper-Canada--6.0%
Bank of Nova Scotia
$ 55,000 3.22%, 2/1/94.............. $ 54,847,497
55,000 3.22%, 2/2/94.............. 54,842,578
Canadian Imperial Holding, Inc.
32,000 3.22%, 1/31/94............. 31,914,133
295,000 3.22%, 2/1/94.............. 294,182,031
--------------
Total Commercial
Paper-Canada
(amortized cost
$435,786,239)............ 435,786,239
--------------
COMMERCIAL PAPER--DOMESTIC--45.3%
American Express Credit Corp.
35,000 3.21%, 2/2/94.............. 34,900,133
87,000 3.23%, 2/2/94.............. 86,750,213
Aristar, Inc.
8,000 3.46%, 1/24/94............. 7,982,316
13,000 3.42%, 2/8/94.............. 12,953,070
Asset Securitization Cooperative Corp.
60,000 3.35%, 2/16/94............. 59,743,167
100,000 3.35%, 2/17/94............. 99,562,639
Associates Corp. of North America
50,000 3.20%, 1/4/94.............. 49,986,667
50,000 3.20%, 1/5/94.............. 49,982,222
44,000 3.20%, 1/10/94............. 43,964,800
Avco Financial Services, Inc.
28,000 3.33%, 2/9/94.............. 27,898,990
25,000 3.35%, 2/10/94............. 24,906,944
38,000 3.35%, 2/11/94............. 37,855,019
Beneficial Corp.
82,000 3.35%, 1/28/94............. 81,793,975
56,000 3.33%, 1/31/94............. 55,844,600
66,000 3.35%, 2/7/94.............. 65,772,758
25,000 3.35%, 2/11/94............. 24,904,618
Ciesco, Inc.
$ 9,000 3.25%, 1/25/94............. $ 8,980,500
7,950 3.30%, 2/10/94............. 7,920,850
24,600 3.35%, 2/11/94............. 24,506,144
14,000 3.35%, 2/16/94............. 13,940,072
15,000 3.35%, 2/22/94............. 14,927,417
19,550 3.35%, 3/7/94.............. 19,431,750
CIT Group Holdings, Inc.
12,000 3.22%, 1/25/94............. 11,974,240
71,000 3.22%, 2/1/94.............. 70,803,133
100,000 3.22%, 2/2/94.............. 99,713,778
55,000 3.22%, 2/7/94.............. 54,817,980
21,000 3.34%, 2/28/94............. 20,886,997
34,000 3.50%, 3/28/94............. 33,715,722
Commercial Credit Co.
28,000 3.35%, 2/1/94.............. 27,919,228
27,000 3.34%, 2/3/94.............. 26,917,335
Corporate Asset Funding Co., Inc.
3,288 3.33%, 1/24/94............. 3,281,005
7,810 3.34%, 1/26/94............. 7,791,885
27,800 3.35%, 2/7/94.............. 27,704,283
33,000 3.35%, 3/1/94.............. 32,818,821
30,400 3.35%, 3/2/94.............. 30,230,267
Corporate Receivables Corp.
30,000 3.21%, 2/7/94.............. 29,901,025
20,500 3.20%, 3/7/94.............. 20,381,556
Dresser Industries Inc.
8,000 3.33%, 1/24/94............. 7,982,980
Falcon Asset Securitization Corp.
19,000 3.38%, 1/28/94............. 18,951,835
</TABLE>
B-17 See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(In thousands) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--DOMESTIC--(cont'd.)
Ford Motor Credit Corp.
$ 64,000 3.32%, 1/21/94............. $ 63,881,956
60,000 3.37%, 1/28/94............. 59,848,350
50,000 3.33%, 2/15/94............. 49,791,875
120,400 3.33%, 2/16/94............. 119,887,698
General Electric Capital Corp.
48,000 3.22%, 2/11/94............. 47,823,973
33,000 3.22%, 2/14/94............. 32,870,127
139,000 3.32%, 2/24/94............. 138,307,780
88,000 3.32%, 2/25/94............. 87,553,644
21,000 3.32%, 2/28/94............. 20,887,673
40,000 3.35%, 2/28/94............. 39,784,111
19,000 3.22%, 4/6/94.............. 18,838,553
General Motors Acceptance Corp.
95,000 3.53%, 1/18/94............. 94,841,865
300,000 3.53%, 1/19/94............. 299,471,250
Golden Peanut Company
5,000 3.35%, 2/18/94............. 4,977,667
Heller Financial Services, Inc.
34,000 3.30%, 1/13/94............. 33,962,600
Honeywell, Inc.
10,000 3.36%, 1/11/94............. 9,990,667
Household Finance Corp.
75,000 3.30%, 1/31/94............. 74,793,750
46,000 3.35%, 1/31/94............. 45,871,583
K mart Corp.
5,000 3.35%, 1/24/94............. 4,989,299
29,000 3.35%, 2/14/94............. 28,881,261
Merrill Lynch & Co., Inc.
37,000 3.37%, 2/2/94.............. 36,889,164
48,000 3.22%, 2/3/94.............. 47,858,320
17,900 3.23%, 2/10/94............. 17,835,759
65,100 3.23%, 2/14/94............. 64,843,000
Merrill Lynch & Co., Inc. (cont'd.)
$ 20,000 3.35%, 2/28/94............. $ 19,892,055
23,000 3.35%, 3/1/94.............. 22,873,724
16,000 3.37%, 3/2/94.............. 15,910,133
Morgan Stanley Group, Inc.
30,000 3.39%, 1/31/94............. 29,915,250
NYNEX Corp.
59,000 3.37%, 2/14/94............. 58,756,986
150,000 3.37%, 2/22/94............. 149,269,833
Preferred Receivables Funding Corp.
13,000 3.40%, 1/24/94............. 12,971,761
23,500 3.34%, 2/23/94............. 23,384,445
29,700 3.35%, 2/23/94............. 29,553,521
Smith Barney Shearson, Inc.
10,000 3.35%, 1/21/94............. 9,981,389
15,000 3.28%, 1/26/94............. 14,965,833
20,000 3.27%, 1/27/94............. 19,952,767
10,000 3.38%, 2/2/94.............. 9,969,956
United States Leasing Capital
9,175 3.40%, 1/14/94............. 9,163,735
Xerox Credit Corp.
53,000 3.37%, 1/21/94............. 52,900,772
14,000 3.35%, 2/11/94............. 13,946,586
--------------
Total Commercial Paper--Domestic
(amortized cost
$3,318,391,605).......... 3,318,391,605
--------------
COMMERCIAL PAPER--YANKEE--11.9%
Abbey National North America Corp.
158,000 3.34%, 3/15/94............. 156,929,901
122,500 3.22%, 3/18/94............. 121,667,272
45,000 3.22%, 3/23/94............. 44,673,975
13,000 3.22%, 4/7/94.............. 12,888,373
44,100 3.40%, 4/26/94............. 43,621,025
ANZ Bank, Ltd. (Delaware)
49,775 3.33%, 4/4/94.............. 49,346,811
</TABLE>
B-18 See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(In thousands) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--YANKEE--(cont'd.)
Bayerische Vereinsbank (Cayman)
$ 68,000 3.31%, 3/3/94.............. $ 67,618,614
BHF Finance (USA), Inc.
20,000 3.25%, 2/22/94............. 19,906,111
13,000 3.35%, 3/7/94.............. 12,921,368
Bradford & Bingley Building Society
20,000 3.22%, 1/12/94............. 19,980,322
20,000 3.23%, 1/12/94............. 19,980,261
20,000 3.35%, 2/7/94.............. 19,931,139
Cheltenham & Glouster Building Society
15,000 3.22%, 1/12/94............. 14,985,242
15,000 3.32%, 3/9/94.............. 14,907,317
Grand Metropolitan Finance, Plc.
15,000 3.35%, 3/30/94............. 14,877,167
Hanson Finance (U.K.), Plc.
43,000 3.37%, 2/16/94............. 42,814,837
23,000 3.34%, 2/28/94............. 22,876,234
50,000 3.37%, 2/28/94............. 49,728,528
13,000 3.35%, 3/1/94.............. 12,928,626
28,600 3.36%, 3/2/94.............. 28,439,840
National Australia Funding, Delaware Inc.
47,000 3.36%, 1/21/94............. 46,912,267
Sumitomo Corp. of America
10,000 3.20%, 3/3/94.............. 9,945,778
Westpac Capital Corp., Delaware
26,000 3.39%, 2/14/94............. 25,892,273
--------------
Total Commercial Paper--Yankee
(amortized cost
$873,773,281)............ 873,773,281
--------------
CORPORATE BONDS--0.4%
American General Finance Corp.
10,960 9.25%, 7/1/94.............. 11,240,635
CIT Group Holdings, Inc.
20,900 8.63%, 1/1/94.............. 20,900,000
--------------
Total Corporate Bonds
(amortized cost
$32,140,635)............. 32,140,635
--------------
LOAN PARTICIPATIONS--1.5%
Bear Stearns Co., Inc.
$100,000 3.50%, 1/4/94.............. $ 100,000,000
Morgan Stanley Group, Inc.
6,030 3.35%, 1/3/94.............. 6,030,000
--------------
Total Loan Participations
(amortized cost
$106,030,000)............ 106,030,000
--------------
MEDIUM TERM OBLIGATIONS--5.4%
Goldman Sachs Group, L.P.
381,000 3.69%, 10/18/94............ 381,000,000
IBM Credit Corp.
10,000 5.52%, 5/16/94............. 10,074,031
--------------
Total Medium Term
Obligations
(amortized cost
$391,074,031)............ 391,074,031
--------------
PROMISSORY NOTE--0.2%
Goldman Sachs Group, L.P.
3.60%, 2/2/94
15,000 (amortized cost
$15,000,000)............. 15,000,000
--------------
VARIABLE RATE INSTRUMENTS+--10.1%
Avco Financial Services, Inc.
61,000 3.37%, 1/27/94............. 61,000,000
Federal Home Loan Mortgage Corp.
137,000 3.08%, 3/15/94............. 137,000,000
Lehman Brothers Hldgs., Inc.
210,000 3.52%, 1/28/94............. 210,000,000
Merrill Lynch & Co., Inc.
153,000 3.33%, 1/20/94............. 152,934,098
Morgan Stanley Group, Inc.
55,000 3.41%, 1/18/94............. 55,000,000
10,000 3.61%, 1/19/94............. 10,000,000
28,000 3.58%, 1/19/94............. 28,000,000
85,000 3.53%, 2/15/94............. 85,000,000
--------------
Total Variable Rate
Instruments
(amortized cost
$738,934,098)............ 738,934,098
--------------
</TABLE>
B-19 See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Description
Value
(Note 1)
<C> <S> <C>
Total Investments--100.3%
(amortized cost
$7,338,574,456).......... $7,338,574,456
Liabilities in excess of
other
assets--(0.3%)........... (19,941,263)
--------------
Net Assets--100%........... $7,318,633,193
--------------
--------------
</TABLE>
+ The maturity date presented for these instruments is the later of the next
date on which the security can be redeemed at par or the next date on which
the rate of interest is adjusted.
The industry classification of portfolio holdings and other assets (net) shown
as a percentage of net assets as of December 31, 1993 was as follows:
<TABLE>
<S> <C>
Commercial Banks........................... 31.7%
Personal Credit Institutions............... 19.4
Security Brokers & Dealers................. 18.5
Short-Term Business Credit................. 12.6
Asset Backed Securities.................... 8.0
Telephone Communications................... 2.9
Tobacco.................................... 2.2
Federal Credit Agencies.................... 1.9
Bank Holding Companies - Domestic.......... 1.8
Variety Stores............................. 0.5
Food & Related Products.................... 0.3
Commodity Trade Firms...................... 0.1
Computer Rental & Leasing.................. 0.1
Finance Lessor............................. 0.1
General Industry Machine................... 0.1
Industrial Control Systems................. 0.1
-----
100.3
Liabilities in excess of other assets...... (0.3)
-----
100.0%
-----
-----
</TABLE>
B-20 See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
December 31,
Assets 1993
--------------
<S> <C>
Investments, at amortized cost which approximates value................................. $7,338,574,456
Cash.................................................................................... 1,344,475
Receivable for Fund shares sold......................................................... 108,477,879
Interest receivable..................................................................... 14,147,546
Other assets............................................................................ 218,198
--------------
7,462,762,554
--------------
Liabilities
Payable for Fund shares reacquired...................................................... 137,719,012
Accrued expenses........................................................................ 2,786,580
Due to Manager.......................................................................... 1,923,281
Dividends payable....................................................................... 1,085,272
Due to Distributor...................................................................... 439,504
Deferred directors' fees................................................................ 175,712
--------------
144,129,361
--------------
Net Assets.............................................................................. $7,318,633,193
--------------
--------------
Net assets were comprised of:
Common stock, at par ($.10 par value; 15,000,000,000 shares authorized for
issuance)............................................................................. $ 731,863,319
Paid-in capital in excess of par...................................................... 6,586,769,874
--------------
Net assets at December 31, 1993......................................................... $7,318,633,193
--------------
--------------
Net asset value, offering price and redemption price per share ($7,318,633,193 divided by
7,318,633,193 shares of common stock issued and outstanding.)......................... $1.00
--------------
--------------
</TABLE>
See Notes to Financial Statements.
B-21
<PAGE>
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
December 31,
Net Investment Income 1993
------------
<S> <C>
Income
Interest............................ $258,182,763
------------
Expenses
Management fee...................... 23,332,701
Distribution fee.................... 9,678,736
Transfer agent's fees and
expenses............................ 17,739,000
Shareholder reports................. 1,465,000
Custodian's fees and expenses....... 1,031,000
Registration fees................... 962,000
Insurance expense................... 196,000
Directors' fees..................... 100,000
Audit fee........................... 36,000
Legal fees.......................... 25,000
Miscellaneous....................... 93,083
------------
Total expenses.................... 54,658,520
------------
Net investment income................. 203,524,243
Net Realized Gain on Investments
Net realized gain on investment
transactions........................ 2,572,145
------------
Net Increase in Net Assets
Resulting from Operations............. $206,096,388
------------
------------
</TABLE>
PRUDENTIAL MONEYMART ASSETS
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
Increase (Decrease) -----------------------------------
in Net Assets 1993 1992
---------------- ----------------
<S> <C> <C>
Operations
Net investment
income.......... $ 203,524,243 $ 244,290,524
Net realized gain
on
investment
transactions.... 2,572,145 7,374,034
---------------- ----------------
Net increase in
net
assets resulting
from
operations...... 206,096,388 251,664,558
---------------- ----------------
Dividends and
distributions to
shareholders...... (206,096,388) (251,664,558)
---------------- ----------------
Fund share
transactions
(at $1 per share)
Proceeds from
shares sold..... 33,414,007,948 28,154,172,600
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions... 196,483,621 240,525,509
Cost of shares
reacquired...... (32,995,139,159) (28,829,576,812)
---------------- ----------------
Net increase
(decrease) in
net assets from
Fund share
transactions.... 615,352,410 (434,878,703)
---------------- ----------------
Total increase
(decrease)...... 615,352,410 (434,878,703)
Net Assets
Beginning of year... 6,703,280,783 7,138,159,486
---------------- ----------------
End of year......... $ 7,318,633,193 $ 6,703,280,783
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
B-22
<PAGE>
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Notes to Financial Statements
Prudential-Bache MoneyMart Assets Inc., doing business as Prudential
MoneyMart Assets (the ``Fund''), is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund
invests primarily in a portfolio of money market instruments maturing in
thirteen months or less whose ratings are within the two highest rating
categories by a nationally recognized statistical rating organization or, if not
rated, are of comparable quality. The ability of the issuers of the securities
held by the Fund to meet their obligations may be affected by economic
developments in a specific industry or region.
Note 1. Accounting The following is a summary
Policies of significant accounting
policies followed by the Fund in the preparation
of its financial statements.
SECURITIES VALUATIONS: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of the difference between the principal amount due at
maturity and cost.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The cost of portfolio securities for federal income tax purposes
is substantially the same as for financial reporting purposes.
FEDERAL INCOME TAXES: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income to its shareholders.
Therefore, no federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: All of the Fund's net investment income and net
realized gains or losses, if any, are declared as dividends daily to the
shareholders of record at the time of such declaration. Net investment income of
the Fund consists of interest accrued and discount earned less estimated
expenses applicable to the dividend period. Payment of dividends is made
monthly.
Note 2. Management The Fund has a management
and Distribution agreement with Prudential
Mutual Fund Management, Agreements
Inc. (``PMF''). Pursuant to this agreement, PMF
has responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PMF has entered into a subadvisory
agreement with The Prudential Investment Corporation (``PIC''); PIC furnishes
investment advisory services in connection with the management of the Fund. PMF
pays for the cost of the subadviser's services, the compensation of officers of
the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The
Fund bears all other costs and expenses.
The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the Fund's average monthly net assets up to $50
million and .30 of 1% of the Fund's average monthly net assets in excess of $50
million.
The Fund has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. (``PMFD''). To reimburse PMFD for its expenses incurred
pursuant to a plan of distribution, the Fund pays PMFD a reimbursement, accrued
daily and payable monthly at an annual rate of .125 of 1% of the Fund's average
daily net assets. PMFD pays various broker-dealers, including Prudential
Securities Incorporated (``PSI'') and Pruco Securities Corporation, affiliated
broker-dealers, for account servicing fees and other expenses incurred by such
broker-dealers.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund
Transactions Services, Inc. (``PMFS''), a
with Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent. During
the year ended December 31, 1993, the Fund incurred fees of approximately
$15,961,000 for the services of PMFS. As of December 31, 1993, approximately
$1,325,000 of such fees were due to PMFS. Transfer agent fees and expenses in
the Statement of Operations include certain out-of-pocket expenses paid to
non-affiliates.
B-23
<PAGE>
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Financial Highlights
Selected data for a share of common stock outstanding throughout each of the
years indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains........ .027 .035 .058 .077 .086
Dividends and distributions to shareholders......... (.027) (.035) (.058) (.077) (.086)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
TOTAL RETURN#:...................................... 2.70% 3.59% 5.95% 8.00% 8.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)....................... $7,318,633 $6,703,281 $7,138,159 $7,411,932 $8,168,972
Average net assets (000)............................ $7,742,989 $7,116,739 $7,763,251 $8,262,329 $6,947,060
<CAPTION>
Ratios to average net assets:
<S> <C> <C> <C> <C> <C>
Expenses, including distribution fee.............. .71% .66% .68% .73% .69%
Expenses, excluding distribution fee.............. .58% .54% .56% .60% .57%
Net investment income............................. 2.63% 3.43% 5.72% 7.62% 8.57%
</TABLE>
- ---------------
#Total return is calculated assuming a purchase of shares on the first day and a
sale on the last day of each year reported and includes reinvestment of
dividends and distributions.
See Notes to Financial Statements.
B-24
<PAGE>
<PAGE>
APPENDIX A
DESCRIPTION OF RATINGS
Bond Ratings
Moody's Investors Service--Bonds which are rated Aaa are judged to be of
the best quality. They carry the smallest degree of investment risk and are
generally referred to as ``gilt edged.'' Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than Aaa securities. Bonds
which are rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future. Moody's
applies numerical modifiers ``1'', ``2'' and ``3'' in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier ``1'' indicates that the security ranks in the higher end of its
generic rating category; the modifier ``2'' indicates a mid-range ranking; and
the modifier ``3'' indicates that the issue ranks in the lower end of its
generic rating category.
Standard & Poor's Corporation--Debt rated AAA has the highest rating
assigned by Standard & Poor's. Capacity to pay interest and repay principal is
extremely strong. Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in small degree.
Debt rated A has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Duff and Phelps, Inc.--Bonds which are rated AAA are considered to be of
the highest credit quality. The risk factors are negligible, being only slightly
more than for risk-free U.S. Treasury debt. Bonds rated AA are considered to be
of high credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions. Bonds which are
rated A have protection factors which are average but adequate; however, risk
factors are more variable and greater in periods of economic stress.
Commercial Paper Ratings
Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations which have an original maturity not
exceeding one year. Moody's employs the following three designations, all judged
to be investment grade, to indicate the relative repayment ability of rated
issuers (or related supporting institutions): Prime-1--Superior ability for
repayment; Prime-2--Strong ability for repayment; Prime-3--Acceptable ability
for repayment.
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment. Ratings are divided into four categories, ranging
from ``A'' for the highest quality obligations to ``D'' for the lowest. Issues
assigned the highest rating, A, are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the
designations 1, 2, and 3 to indicate the relative degree of safety. The
designation A-1 indicates that the degree of safety regarding timely payment is
either overwhelming or very strong. A "+" designation is applied to those
issues rated A-1 which possess overwhelming safety characteristics. Capacity for
timely payment on issues with the designation A-2 is strong. However, the
relative degree of safety is not as high as for issues designated A-1. Issues
carrying the designation A-3 have a satisfactory capacity for timely payment.
They are however, somewhat more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
Duff and Phelps commercial paper ratings are divided into three categories,
ranging from ``1'' for the highest quality obligations to ``3'' for the lowest.
No ratings are issued for companies whose paper is not deemed investment grade.
Issues assigned the Duff 1 rating are considered top grade. This category is
further divided into three gradations as follows: Duff 1 plus--highest certainty
of timely payment, short-term liquidity, including internal operating factors
and/or ready access to alternative sources of funds, is clearly outstanding and
safety is just below risk-free U.S. Treasury short-term obligations; Duff
1--very high certainty of timely payment, liquidity factors are excellent and
supported by strong fundamental protection factors, risk factors are minor; Duff
1 minus--high certainty of timely payment, liquidity factors are strong and
supported by good fundamental protection factors, risk factors are very small.
Issues rated Duff 2 represent a good certainty of timely payment; liquidity
factors and company fundamentals are sound; although ongoing internal funds
needs may enlarge total financing requirements, access to capital markets is
good; risk factors are small. Duff 3 represents a satisfactory grade;
satisfactory liquidity and other protection factors qualify issue as to
investment grade; risk factors are larger and subject to more variation;
nevertheless timely payment is expected.
A-1
<PAGE>
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
(1) Financial Statements included in the Prospectus constituting Part A
of this Post-Effective Amendment to the Registration Statement:
Financial Highlights.
(2) Financial Statements included in the Statement of Additional
Information constituting Part B of this Post-Effective Amendment to
the Registration Statement:
Portfolio of Investments as of December 31, 1993
Statement of Assets and Liabilities as of December 31, 1993
Statement of Operations for the Year Ended December 31, 1993
Statement of Changes in Net Assets for the Years Ended December 31,
1993 and 1992
Notes to Financial Statements
Financial Highlights
Independent Auditors' Report
(b) Exhibits:
1.(a) Articles of Amendment, incorporated by reference to Exhibit No. 1
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301). Amendment to
Articles of Incorporation, incorporated by reference to Exhibit No. 1
to Post-Effective Amendment No. 20 to the Registration Statement on
Form N-1A (File No. 2-55301). Articles of Incorporation, incorporated
by reference to Exhibit No. 1 to the Registration Statement and
Post-Effective Amendment No. 1 to the Registration Statement (File No.
2-55301), as amended on Form N-1Q filed on July 29, 1982 (File No.
811-2619).
(b) Articles Supplementary, incorporated by reference to Exhibit No.
1(b) to Post-Effective Amendment No. 24 to the Registration Statement
on Form N-1A filed on March 2, 1990 (File No. 2-55301).
2.Amendment to By-Laws, incorporated by reference to Exhibit No. 2 to
Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A filed on February 29, 1988 (File No. 2-55301). By-Laws, as
amended on October 17, 1984, incorporated by reference to Exhibit No.
2 to Post-Effective Amendment No. 19 to the Registration Statement on
Form N-1A (File No. 2-55301).
4.(a) Form of stock certificate, incorporated by reference to Exhibit
No. 4 to Post-Effective Amendment No. 22 to the Registration Statement
on Form N-1A filed on February 29, 1988 (File No. 2-55301).
(b) Instruments defining rights of shareholders, incorporated by
reference to Exhibits 1(a), 1(b) and 2 to this Post-Effective
Amendment No. 28 to the Registration Statement filed on February 17,
1994 (File No. 2-55301)
5.(a) Management Agreement between the Registrant and Prudential Mutual
Fund Management, Inc., incorporated by reference to Exhibit No. 5(a)
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301).
(b) Subadvisory Agreement between Prudential Mutual Fund Management,
Inc. and The Prudential Investment Corporation, incorporated by
reference to Exhibit No. 5(b) to Post-Effective Amendment No. 23 to
the Registration Statement on Form N-1A filed on May 1, 1989 (File No.
2-55301).
6.(a) Distribution Agreement between the Registrant and Prudential
Mutual Fund Distributors, Inc., incorporated by reference to Exhibit
No. 6 to Post-Effective Amendment No. 23 to the Registration Statement
on Form N-1A filed on May 1, 1989 (File No. 2-55301).
(b) Amended and Restated Distribution Agreement between the Registrant
and Prudential Mutual Fund Distributors, Inc.*
C-1
<PAGE>
<PAGE>
8.Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit No. 8 to Post-Effective Amendment
No. 25 to the Registration Statement on Form N-1A filed on April 12,
1991 (File No. 2-55301).
9.Transfer Agency and Service Agreement, incorporated by reference to
Exhibit No. 9(a) to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A filed on February 29, 1988 (File
No. 2-55301).
10.(a) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit No. 3(b) to Post-Effective Amendment No. 9 to the Registration
Statement on Form N-1A (File No. 2-55301).
(b) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit No. 10(b) to Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A (File No. 2-55301).
11.Consent of Independent Accountants.*
15.(a) Plan of Distribution, incorporated by reference to Exhibit No. 15
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301).
(b) Distribution and Service Plan between the Registrant and
Prudential Mutual Fund Distributors, Inc.*
- ------------------
*Filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
As of January 31, 1994, there were 7,681,788,436.474 record holders of
common stock, $.10 par value per share.
Item 27. Indemnification.
As permitted by Sections 17(h) and 17(i) of the Investment Company Act of
1940 (``Investment Company Act'') and pursuant to Article X of the Registrant's
By-Laws (Exhibit 2 to the Registration Statement) and Section 2-418 of the
Maryland General Corporation Law, officers, directors, employees and agents of
the Registrant may be indemnified against certain liabilities in connection with
the Registrant except liabilities arising from misfeasance, bad faith, gross
negligence or reckless disregard in the conduct of their respective duties. As
permitted by Section 17(i) of the Investment Company Act, pursuant to Section 9
of the Distribution Agreement (Exhibit 6 to the Registration Statement),
Prudential Mutual Fund Distributors, Inc., as Distributor of the Fund, may be
indemnified against certain liabilities it may incur. Such Article X of the
By-Laws and Section 9 of the Distribution Agreement are hereby incorporated by
reference in their entirety.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the ``Securities Act'') may be permitted to directors, officers and
controlling persons of the Registrant and the principal underwriter pursuant to
the foregoing provisions or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission (the ``Commission'') such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
and the principal underwriter in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person or the principal underwriter in connection with
the shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
Section 8 of the Management Agreement (Exhibit 5(a) to the Registration
Statement) limits the liability of Prudential Mutual Fund Management, Inc.
(``PMF'') to losses resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the Investment Company Act) or losses resulting from willful misfeasance, bad
faith or gross negligence in the performance of its duties or from reckless
disregard by PMF of its obligations and duties under the Management Agreement.
Section 4 of the Subadvisory Agreement (Exhibit 5(b) to the Registration
Statement) limits the liability of The Prudential Investment Corporation
(``PIC'') to losses resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or from reckless disregard by PIC
of its obligations and duties under the Subadvisory Agreement.
The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Commission under the Investment Company Act so long as the interpretation of
Sections 17(h) and 17(i) of such Act remain in effect and are consistently
applied.
C-2
<PAGE>
<PAGE>
The Registrant maintains an insurance policy insuring its officers and
directors against certain liabilities and certain costs of defending claims
against such officers and directors, to the extent such officers and directors
are not found to have committed conduct constituting conflict of interest,
intentional non-compliance with statutes or regulations or dishonesty,
fraudulent or criminal acts or omissions. The insurance policy also insures the
Registrant against the costs of indemnification payments to officers and
directors under certain circumstances.
Item 28. Business and other Connections of Investment Adviser.
(a) Prudential Mutual Fund Management, Inc.
See ``Manager'' in the Statement of Additional Information.
The business and other connections of PMF directors and officers are listed
in Schedules A and D of Form ADV of PMF as currently on file with the
Commission, the text of which is hereby incorporated by reference (File No.
801-31104, filed on October 13, 1993).
The business and other connections of the directors and officers of PMF are
set forth below. Except as otherwise indicated, the address of each person is
One Seaport Plaza, New York, NY 10292.
<TABLE>
<CAPTION>
Name and Address Position with PMF Principal Occupations
- -------------------------- ---------------------- --------------------------------------------------------
<S> <C> <C>
Maureen Behning-Doyle Executive Vice Executive Vice President, PMF; Senior Vice President,
President Prudential Securities Incorporated (Prudential
Securities)
John D. Brookmeyer, Jr. Director Senior Vice President, PIC; Senior Vice President, The
Two Gateway Center Prudential Insurance
Newark, NJ 07102 Company of America (Prudential)
Susan C. Cote Senior Vice President Senior Vice President, PMF; Senior Vice President,
Prudential Securities
Fred A. Fiandaca Executive Vice Executive Vice President, Chief Operating Officer and
Raritan Plaza One President, Chief Director, PMF; Chairman, Chief Operating Officer and
Edison, NJ 08847 Operating Officer and Director, Prudential Mutual Fund Services, Inc.
Director
Stephen P. Fisher Senior Vice President Senior Vice President, PMF; Senior Vice President,
Prudential Securities
Frank W. Giordano Executive Vice Executive Vice President, General Counsel and Secretary,
President, General PMF; Senior Vice President, Prudential Securities
Counsel and Secretary
Robert F. Gunia Executive Vice Executive Vice President, Chief Administrative Officer,
President, Chief Chief Financial Officer, Treasurer and Director, PMF;
Administrative Senior Vice President, Prudential Securities
Officer, Chief
Financial Officer,
Treasurer and Director
Eugene B. Heimberg Director Senior Vice President, Prudential
Prudential Plaza
Newark, NJ 07101
Lawrence C. McQuade Vice Chairman Vice Chairman, PMF
Leland B. Paton Director Executive Vice President and Director, Prudential
Securities; Director, Prudential Securities Group,
Inc. (``PSG'')
Richard A. Redeker President, Chief President, Chief Executive Officer and Director, PMF;
Executive Officer and Director and Member of Operating Committee, Prudential
Director Securities; Director, PSG
</TABLE>
C-3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Name and Address Position with PMF Principal Occupations
- -------------------------- ---------------------- --------------------------------------------------------
<S> <C> <C>
S. Jane Rose Senior Vice President Senior Vice President, Senior Counsel and Assistant
and Senior Counsel and Secretary, PMF; Senior Vice President and Senior
Assistant Secretary Counsel, Prudential Securities
Donald G. Southwell Director Senior Vice President, Prudential; Director, PSG
213 Washington Street
Newark, NJ 07102
</TABLE>
(b) Prudential Investment Corporation (PIC).
See ``How the Fund is Managed--Subadviser'' in the Prospectus constituting
Part A of this Registration Statement and ``Subadviser'' 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 07101.
<TABLE>
<CAPTION>
Name and Address Position with PIC Principal Occupations
- -------------------------- ---------------------- --------------------------------------------------------
<S> <C> <C>
Martin A. Berkowitz Senior Vice President, Senior Vice President, Chief Compliance Officer and
Chief Financial Chief Financial Officer, PIC; Vice President,
Officer and Chief Prudential
Compliance Officer
William M. Bethke Senior Vice President Senior Vice President, Prudential
Two Gateway Center
Newark, NJ 07102
John D. Brookmeyer, Jr. Senior Vice President Senior Vice President, Prudential; Senior Vice
Two Gateway Center President, PIC
Newark, NJ 07102
Eugene B. Heimberg Senior Vice President Senior Vice President, Prudential
and Director
Garnett L. Keith, Jr. President and Director Vice Chairman and Director, Prudential
William P. Link Executive Vice Executive Vice President, Prudential
Four Gateway Center President
Newark, NJ 07102
Robert E. Riley Executive Vice Executive Vice President, Prudential; Director, PSG
800 Boylston Avenue President
Boston, MA 02199
James W. Stevens Executive Vice Executive Vice President, Prudential; Director, PSG
Four Gateway Center President
Newark, NJ 07102
Robert C. Winters Director Chairman of the Board and Chief Executive Officer,
Prudential; Chairman of the Board and Director, PSG
Claude J. Zinngrabe, Jr. Vice President Vice President, Prudential
</TABLE>
Item 29. Principal Underwriters
(i) Prudential Mutual Fund Distributors, Inc. is distributor for
Command Government Fund, Command Money Fund, Command Tax-Free Fund, Prudential
Adjustable Rate Securities Fund, Inc., Prudential-Bache MoneyMart Assets Inc.
(d/b/a Prudential MoneyMart Assets), Prudential California Municipal Fund
(California Money Market Series and Class A shares of the California Series and
C-4
<PAGE>
<PAGE>
California Income Series), Prudential Institutional Liquidity Portfolio, Inc.,
Prudential Municipal Series Fund (Connecticut Money Market Series, Massachusetts
Money Market Series, New York Money Market Series, New Jersey Money Market
Series and for Class A shares of all other Series), Prudential-Bache Special
Money Market Fund, Inc. (d/b/a Prudential Special Money Market Fund),
Prudential-Bache Tax-Free Money Fund, Inc. (d/b/a Prudential Tax-Free Money
Fund) and for Class A shares of The BlackRock Government Income Trust,
Prudential Adjustable Rate Securities Fund, Inc., Prudential Equity
Fund, Inc., Prudential Equity Income Fund, Prudential FlexiFund, Prudential
Global Fund, Inc., Prudential-Bache Global Genesis Fund, Inc. (d/b/a Prudential
Global Genesis Fund), Prudential-Bache Global Natural Resources Fund, Inc.
(d/b/a Prudential Global Natural Resources Fund), Prudential-Bache GNMA Fund,
Inc. (d/b/a Prudential GNMA Fund), Prudential-Bache Government Plus Fund,
Inc. (d/b/a Prudential Government Plus Fund), Prudential Government Securities
Trust (Money Market Series and U.S. Treasury Money Market Series), Prudential
Growth Fund, Inc., Prudential-Bache Growth Opportunity Fund, Inc. (d/b/a
Prudential Growth Opportunity Fund), Prudential-Bache High Yield Fund, Inc.
(d/b/a Prudential High Yield Fund), Prudential IncomeVertible(R) Fund, Inc.,
Prudential Intermediate Global Income Fund, Inc., Prudential-Bache Multi-Sector
Fund, Inc. (d/b/a Prudential Multi-Sector Fund), Prudential Municipal Bond Fund,
Prudential Municipal Series Fund, Prudential-Bache National Municipals Fund,
Inc. (d/b/a Prudential National Municipals Fund), Prudential Pacific Growth
Fund, Inc., Prudential Short-Term Global Income Fund, Inc., Prudential-Bache
Structured Maturity Fund, Inc. (d/b/a Prudential Structured Maturity Fund),
Prudential U.S. Government Fund, Prudential-Bache Utility Fund, Inc. (d/b/a
Prudential Utility Fund), Global Utility Fund, Inc. and Nicholas-Applegate Fund,
Inc. (Nicholas-Applegate Growth Equity Fund).
(b)(i) Prudential Mutual Fund Distributors, Inc.
<TABLE>
<CAPTION>
Positions and Positions and
Offices with Offices with
Name(1) Underwriter Registrant
- --------------------------------- -------------------------------------- -------------------------
<S> <C> <C>
Joanne Accurso-Soto.............. Vice President None
Dennis Annarumma................. Vice President, Assistant Treasurer None
and Assistant Comptroller
Phyllis J. Berman................ Vice President None
Fred A. Fiandaca................. President, Chief Executive Officer and None
Raritan Plaza One Director
Edison, NJ 08847
Stephen P. Fisher................ Vice President None
Frank W. Giordano................ Executive Vice President, General None
Counsel, Secretary and Director
Robert F. Gunia.................. Executive Vice President, Director, Vice President
Treasurer and Comptroller
Andrew J. Varley................. Vice President None
Anita Whelan..................... Vice President and Assistant Secretary None
- ------------------
(1)The address of each person named is One Seaport Plaza, New York, NY 10292 unless otherwise
indicated.
</TABLE>
(c) Registrant has no principal underwriter who is not an affiliated person
of the Registrant.
Item 30. 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 Registrant, One Seaport Plaza, New York, New
York, and Prudential Mutual Fund Services, Inc., Raritan Plaza One, Edison, New
Jersey. Documents required by Rules 31a-1(b)(5), (6), (7), (9), (10) and (11)
and 31a-1(f) will be kept at Two Gateway Center, documents required by Rules
31a-1(b)(4) and (11) and 31a-1(d) at One Seaport Plaza 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, Inc.
Item 31. Management Services
Other than as set forth under the captions ``How the Fund Is
Managed--Manager'' and ``How the Fund Is Managed--Distributor'' in the
Prospectus and the captions ``Manager'' and ``Distributor'' 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.
C-5
<PAGE>
<PAGE>
Item 32. Undertakings
The Registrant hereby undertakes to furnish to each person to whom a
Prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
C-6
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, and State of New York, on the 16th day of February, 1994.
PRUDENTIAL-BACHE MONEYMART
ASSETS INC.
(doing business as Prudential MoneyMart Assets)
/s/ Lawrence C. McQuade
--------------------------------------------
(Lawrence C. McQuade, President)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the 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/ Lawrence C. McQuade President and Director February 16, 1994
- --------------------------------------
Lawrence C. McQuade
/s/ John C. Davis Chairman and Director February 16, 1994
- --------------------------------------
John C. Davis
/s/ William S. Field Director February 16, 1994
- --------------------------------------
William S. Field
/s/ Delayne D. Gold Director February 16, 1994
- --------------------------------------
Delayne D. Gold
/s/ Harry A. Jacobs, Jr. Director February 16, 1994
- --------------------------------------
Harry A. Jacobs, Jr.
/s/ Thomas A. Owens, Jr. Director February 16, 1994
- --------------------------------------
Thomas A. Owens, Jr.
/s/ Richard A. Redeker Director February 16, 1994
- --------------------------------------
Richard A. Redeker
Director
- --------------------------------------
Robert J. Schultz
/s/ Sidney M. Spielvogel Director February 16, 1994
- --------------------------------------
Sidney M. Spielvogel
/s/ Nancy Hays Teeters Director February 16, 1994
- --------------------------------------
Nancy Hays Teeters
/s/ Robert H. Wellington Director February 16, 1994
- --------------------------------------
Robert H. Wellington
/s/ Susan C. Cote Principal Financial and Accounting February 16, 1994
- -------------------------------------- Officer
Susan C. Cote
</TABLE>
<PAGE>
<PAGE>
EXHIBIT INDEX
1.(a) Articles of Amendment, incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 23 to the Registration Statement on Form
N-1A filed on May 1, 1989 (File No. 2-55301). Amendment to Articles of
Incorporation, incorporated by reference to Exhibit No. 1 to
Post-Effective Amendment No. 20 to the Registration Statement on Form
N1-A (File No. 2-55301). Articles of Incorporation, incorporated by
reference to Exhibit No. 1 to the Registration Statement and
Post-Effective Amendment No. 1 to the Registration Statement (File No.
2-55301), as amended in Form N-1Q filed on July 29, 1982 (File No.
811-2619).
(b) Articles Supplementary, incorporated by reference to Exhibit No.
1(b) to Post-Effective Amendment No. 24 to the Registration Statement
on Form N-1A filed on March 2, 1990 (File No. 2-55301).
2.Amended to By-Laws, incorporated by reference to Exhibit No. 2 to
Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A filed on February 28, 1988 (File No. 2-55301). By-Laws, as
amended on October 17, 1984, incorporated by reference to Exhibit No.
2 to Post-Effective Amendment No. 19 to the Registration Statement on
Form N-1A (File No. 2-55301).
4.(a) Form of stock certificate, incorporated by reference to Exhibit
No. 4 to Post-Effective Amendment No. 22 to the Registration Statement
on Form N-1A filed on February 28, 1988 (File No. 2-55301).
(b) Instruments defining rights of shareholders, incorporated by
reference to Exhibits 1(a), 1(b) and 2 of this Post-Effective
Amendment No. 28 to this Registration Statement filed on
February 17, 1994 (File No. 2-55301).
5.(a) Management Agreement between the Registrant and Prudential Mutual
Fund Management, Inc., incorporated by reference to Exhibit No. 5(a)
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A filed on May 1, 1989 (File No. 2-55301).
(b) Subadvisory Agreement between Prudential Mutual Fund Management,
Inc. and The Prudential Investment Corporation, incorporated by
reference to Exhibit No. 5(b) to Post-Effective Amendment No. 23 to
the Registration Statement on Form N-1A filed on May 1, 1989 (File No.
2-55301).
6.(a) Distribution Agreement between the Registrant and Prudential
Mutual Fund Distributors, Inc., incorporated by reference to Exhibit
No. 6 to Post-Effective Amendment No. 23 to the Registration Statement
on Form N-1A filed on May 1, 1989 (File No. 2-55301).
(b) Amended and Restated Distribution Agreement between the Registrant
and Prudential Mutual Fund Distributors, Inc.*
8.Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit No. 8 to Post-Effective Amendment
No. 25 to the Registration Statement on Form N-1A filed on April 12,
1992 (File No. 2-55301).
9.Transfer Agency and Service Agreement, incorporated by reference to
Exhibit No. 9(a) to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A filed on February 28, 1988 (File
No. 2-55301).
10.(a) Opinion of Gardner, Carton & Douglas, incorporated by reference to
Exhibit No. 3(b) to Post-Effective Amendment No. 9 to the Registration
Statement (File No. 2-55301).
(b) Opinion of Gardner, Carton & Douglas, incorporated by reference
to Exhibit 10(b) to Post-Effective Amendment No. 27 to the
Registration Statement (File No. 2-55301).
11.Consent of Independent Accountants.*
15.(a) Plan of Distribution, incorporated by reference to Exhibit No. 15
to Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A (File No. 2-55301).
(b) Distribution and Service Plan between the Registrant and
Prudential Mutual Fund Services, Inc.*
- ------------------
*Filed herewith.
Exhibit 6(b)
PRUDENTIAL MONEYMART ASSETS
Distribution Agreement
Agreement, dated as of May 1, 1988 and amended and restated as
of July 1, 1993, between Prudential MoneyMart Assets, a Delaware
Corporation (the Fund), and Prudential Mutual Fund Distributors,
Inc., a Delaware Corporation (the Distributor).
WITNESSETH
WHEREAS, the Fund is registered under the Investment Company
Act of 1940, as amended (the Investment Company Act), as a
diversified, open-end, management investment company and it is in
the interest of the Fund to offer its Shares for sale continuously;
WHEREAS, the Distributor is a broker-dealer registered under
the Securities Exchange Act of 1934, as amended, and is engaged in
the business of selling Shares of registered investment companies
either directly or through other broker-dealers;
WHEREAS, the Fund has previously offered its Shares pursuant
to a distribution agreement dated as of May 1, 1988 (the "Former
Agreements") and adopted plans of distribution pursuant to Rule
12b-1 under the Investment Company Act authorizing payments by the
Fund to Prudential Securities Incorporated and Prudential Mutual
Fund Distributors (the "Former Plans"); and
WHEREAS, the Fund and the Distributor wish to enter into an
agreement with each other, superseding the former agreement, with
respect to the continuous offering of the Fund's Shares from and
after the date hereof in order to promote the growth of the Fund
and facilitate the distribution of its Shares.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor
The Fund hereby appoints the Distributor as the principal
underwriter and distributor of the Fund to sell Shares to the
public and the Distributor hereby accepts such appointment and
agrees to act hereunder. The Fund hereby agrees during the term of
this Agreement to sell Shares of the Fund to the Distributor on the
terms and conditions set forth below.
Section 2. Exclusive Nature of Duties
The Distributor shall be the exclusive representative of the
Fund to act as principal underwriter and distributor of the Fund's
Shares, except that:
<PAGE>
<PAGE>
2.1 The exclusive rights granted to the Distributor to
purchase Shares from the Fund shall not apply to Shares of the Fund
issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the
acquisition by purchase or otherwise of all (or substantially all)
the assets or the outstanding Shares of any such company by the
Fund.
2.2 Such exclusive rights shall not apply to Shares issued by
the Fund pursuant to reinvestment of dividends or capital gains
distributions.
2.3 Such exclusive rights shall not apply to Shares issued by
the Fund pursuant to the reinstatement privilege afforded redeeming
shareholders.
2.4 Such exclusive rights shall not apply to purchases made
through the Fund's transfer and dividend disbursing agent in the
manner set forth in the currently effective Prospectus of the Fund.
The term "Prospectus" shall mean the Prospectus and Statement of
Additional Information included as part of the Fund's Registration
Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time, and
the term "Registration Statement" shall mean the Registration
Statement filed by the Fund with the Securities and Exchange
Commission and effective under the Securities Act of 1933, as
amended (Securities Act), and the Investment Company Act, as such
Registration Statement is amended from time to time.
Section 3. Purchase of Shares from the Fund
3.1 The Distributor shall have the right to buy from the Fund
the Shares needed, but not more than the Shares needed (except for
clerical errors in transmission) to fill unconditional orders for
Shares placed with the Distributor by investors or registered and
qualified securities dealers and other financial institutions
(selected dealers). The price which the Distributor shall pay for
the Shares so purchased from the Fund shall be the net asset value,
determined as set forth in the Prospectus.
3.2 The Shares are to be resold by the Distributor or
selected dealers, as described in Section 6.4 hereof, to investors
at the offering price as set forth in the Prospectus.
3.3 The Fund shall have the right to suspend the sale of its
Shares at times when redemption is suspended pursuant to the
conditions in Section 4.3 hereof or at such other times as may be
determined by the Board of Directors. The Fund shall also have the
right to suspend the sale of its Shares if a banking moratorium
shall have been declared by federal or New York authorities.
2
<PAGE>
<PAGE>
3.4 The Fund, or any agent of the Fund designated in writing
by the Fund, shall be promptly advised of all purchase orders for
Shares received by the Distributor. Any order may be rejected by
the Fund; provided, however, that the Fund will not arbitrarily or
without reasonable cause refuse to accept or confirm orders for the
purchase of Shares. The Fund (or its agent) will confirm orders
upon their receipt, will make appropriate book entries and upon
receipt by the Fund (or its agent) of payment therefor, will
deliver deposit receipts for such Shares pursuant to the
instructions of the Distributor. Payment shall be made to the Fund
in New York Clearing House funds or federal funds. The Distributor
agrees to cause such payment and such instructions to be delivered
promptly to the Fund (or its agent).
Section 4. Repurchase or Redemption of Shares by the Fund
4.1 Any of the outstanding Shares of the Fund may be tendered
for redemption at any time, and the Fund agrees to repurchase or
redeem the Shares so tendered in accordance with its Declaration of
Trust as amended from time to time, and in accordance with the
applicable provisions of the Prospectus. The price to be paid to
redeem the Shares of the Fund shall be equal to the net asset value
determined as set forth in the Prospectus. All payments by the
Fund hereunder shall be made in the manner set forth in Section 4.2
below.
4.2 The Fund shall pay the total amount of the redemption
price as defined in the above paragraph pursuant to the
instructions of the Distributor on or before the seventh calendar
day subsequent to its having received the notice of redemption in
proper form. The proceeds of any redemption of Shares shall be
paid by the Fund to or for the account of the redeeming
shareholder, in each case in accordance with applicable provisions
of the Prospectus.
4.3 Redemption of Shares of the Fund or payment may be
suspended at times when the New York Stock Exchange is closed for
other than customary weekends and holidays, when trading on said
Exchange is restricted, 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 during any
other period when the Securities and Exchange Commission, by order,
so permits.
3
<PAGE>
<PAGE>
Section 5. Duties of the Fund
5.1 Subject to the possible suspension of the sale of Shares
of the Fund as provided herein, the Fund agrees to sell its Shares
so long as it has Shares available.
5.2 The Fund shall furnish the Distributor copies of all
information, financial statements and other papers which the
Distributor may reasonably request for use in connection with the
distribution of Shares, and this shall include one certified copy,
upon request by the Distributor, of all financial statements
prepared for the Fund by independent public accountants. The Fund
shall make available to the Distributor such number of copies of
its Prospectus and annual and interim reports as the Distributor
shall reasonably request.
5.3 The Fund shall take, from time to time, but subject to
the necessary approval of the Board of Directors and the
shareholders, all necessary action to fix the number of authorized
Shares and such steps as may be necessary to register the same
under the Securities Act, to the end that there will be available
for sale such number of Shares as the Distributor reasonably may
expect to sell. The Fund agrees to file from time to time such
amendments, reports and other documents as may be necessary in
order that there will be no untrue statement of a material fact in
the Registration Statement, or necessary in order that there will
be no omission to state a material fact in the Registration
Statement which omission would make the statements therein
misleading.
5.4 The Fund shall use its best efforts to qualify and
maintain the qualification of any appropriate number of its Shares
for sales under the securities laws of such states as the
Distributor and the Fund may approve; provided that the Fund shall
not be required to amend its Articles of Incorporation or By-Laws
to comply with the laws of any state, to maintain an office in any
state, to change the terms of the offering of its Shares in any
state from the terms set forth in its Registration Statement, to
qualify as a foreign corporation in any state or to consent to
service of process in any state other than with respect to claims
arising out of the offering of its Shares. Any such qualification
may be withheld, terminated or withdrawn by the Fund at any time in
its discretion. As provided in Section 8.1 hereof, the expense of
qualification and maintenance of qualification shall be borne by
the Fund. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required
by the Fund in connection with such qualifications.
4
<PAGE>
<PAGE>
Section 6. Duties of the Distributor
6.1 The Distributor shall devote reasonable time and effort
to effect sales of Shares of the Fund, but shall not be obligated
to sell any specific number of Shares. Sales of the Shares shall
be on the terms described in the Prospectus. The Distributor may
enter into like arrangements with other investment companies. The
Distributor shall compensate the selected dealers as set forth in
the Prospectus.
6.2 In selling the Shares, the Distributor shall use its best
efforts in all respects duly to conform with the requirements of
all federal and state laws relating to the sale of such securities.
Neither the Distributor nor any selected dealer nor any other
person is authorized by the Fund to give any information or to make
any representations, other than those contained in the Registration
Statement or Prospectus and any sales literature approved by
appropriate officers of the Fund.
6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the
collection of amounts payable by investors and selected dealers on
such sales and the cancellation of unsettled transactions, as may
be necessary to comply with the requirements of the National
Association of Securities Dealers, Inc. (NASD).
6.4 The Distributor shall have the right to enter into
selected dealer agreements with registered and qualified securities
dealers and other financial institutions of its choice for the sale
of Shares, provided that the Fund shall approve the forms of such
agreements. Within the United States, the Distributor shall offer
and sell Shares only to such selected dealers as are members in
good standing of the NASD. Shares sold to selected dealers shall
be for resale by such dealers only at the offering price determined
as set forth in the Prospectus.
Section 7. Reimbursement of the Distributor under the Plan
7.1 The Fund shall reimburse the Distributor for costs
incurred by it in performing its duties under the Distribution and
Service Plan and this Agreement including amounts paid on a
reimbursement basis to Prudential Securities Incorporated
(Prudential Securities) and Pruco Securities Corporation (Prusec),
affiliates of the Distributor, under the selected dealer agreements
between the Distributor and Prudential Securities and Prusec,
respectively, amounts paid to other securities dealers or financial
institutions under selected dealer agreements between the
Distributor and such dealers and institutions and amounts paid for
personal service and/or the maintenance of shareholder accounts.
Amounts reimbursable under the Plan shall be accrued daily and paid
monthly or at such other intervals as the Board of Directors may
5
<PAGE>
<PAGE>
determine but shall not be paid at a rate that exceeds .125 of 1%.
Payment of the distribution and service fee shall be subject to the
limitations of Article III, Section 26 of the NASD Rules of Fair
Practice.
7.2 So long as the Plan or any amendment thereto is in
effect, the Distributor shall inform the Board of Directors of the
commissions and account servicing fees to be paid by the
Distributor to account executives of the Distributor and to
broker-dealers and financial institutions which have dealer
agreements with the Distributor. So long as the Plan (or any
amendment thereto) is in effect, at the request of the Board of
Directors or any agent or representative of the Fund, the
Distributor shall provide such additional information as may
reasonably be requested concerning the activities of the
Distributor hereunder and the costs incurred in performing such
activities.
7.3 Costs of the Distributor subject to reimbursement
hereunder are costs of performing distribution activities and may
include, among others:
(a) amounts paid to Prudential Securities in
reimbursement of costs incurred by Prudential
Securities in performing services under a
selected dealer agreement between Prudential
Securities and the Distributor for sale of
Shares of the Fund, including sales commissions
and trailer commissions paid to, or on account
of, account executives and indirect and
overhead costs associated with the performance
of distribution activities, including central
office and branch expenses;
(b) amounts paid to Prusec in reimbursement of
costs incurred by Prusec in performing services
under a selected dealer agreement between
Prusec and the Distributor for sale of Shares
of the Fund, including sales commissions and
trailer commissions paid to, or on account of,
agents and indirect and overhead costs
associated with distribution activities;
(c) sales commissions and trailer commissions paid
to, or on account of, broker-dealers and
financial institutions (other than Prudential
Securities and Prusec) which have entered into
selected dealer agreements with the Distributor
with respect to shares of the Fund;
6
<PAGE>
<PAGE>
(d) amounts paid to, or on account of, account
executives of Prudential Securities, Prusec, or
of other broker-dealers or financial
institutions for personal services and/or the
maintenance of shareholder accounts; and
(e) advertising for the Fund in various forms
through any available medium, including the
cost of printing and mailing Fund Prospectuses,
and periodic financial reports and sales
literature to persons other than current
shareholders of the Fund.
Indirect and overhead costs referred to in clause (b) of the
foregoing sentence include (i) lease expenses, (ii) salaries and
benefits of personnel including operations and sales support
personnel, (iii) utility expenses, (iv) communications expenses,
(v) sales promotion expenses, (vi) expenses of postage, stationery
and supplies and (vii) general overhead.
Section 8. Allocation of Expenses
8.1 The Fund shall bear all costs and expenses of the
continuous offering of its Shares, including fees and disbursements
of its counsel and auditors, in connection with the preparation and
filing of any required Registration Statements and/or Prospectuses
under the Investment Company Act or the Securities Act, and
preparing and mailing annual and periodic reports and proxy
materials to shareholders (including but not limited to the expense
of setting in type any such Registration Statements, Prospectuses,
annual or periodic reports or proxy materials). The Fund shall
also bear the cost of expenses of qualification of the Shares for
sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the
United States or other jurisdictions as shall be selected by the
Fund and the Distributor pursuant to Section 5.4 hereof and the
cost and expense payable to each such state for continuing
qualification therein until the Fund decides to discontinue such
qualification pursuant to Section 5.4 hereof. As set forth in
Section 7 above, the Fund shall also bear the expenses it assumes
pursuant to the Plan with respect to Shares of the Fund, so long as
the Plan is in effect.
8.2 If the Plan is terminated or discontinued, the costs
previously incurred by the Distributor in performing the duties set
forth in Section 6 hereof shall be borne by the Distributor and
will not be subject to reimbursement by the Fund.
7
<PAGE>
<PAGE>
Section 9. Indemnification
9.1 The Fund agrees to indemnify, defend and hold the
Distributor, its officers and trustees and any person who controls
the Distributor within the meaning of Section 15 of the Securities
Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which the
Distributor, its officers, trustees or any such controlling person
may incur under the Securities Act, or under common law or
otherwise, arising out of or based upon any untrue statement of a
material fact contained in the Registration Statement or Prospectus
or arising out of or based upon any alleged omission to state a
material fact required to be stated in either thereof or necessary
to make the statements in either thereof not misleading, except
insofar as such claims, demands, liabilities or expenses arise out
of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by the Distributor
to the Fund for use in the Registration Statement or Prospectus;
provided, however, that this indemnity agreement shall not inure to
the benefit of any such officer, trustee or controlling person
unless a court of competent jurisdiction shall determine in a final
decision on the merits, that the person to be indemnified was not
liable by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement
(disabling conduct), or, in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that
the indemnified person was not liable by reason of disabling
conduct, by (a) a vote of a majority of a quorum of trustees who
are neither "interested persons" of the Fund as defined in Section
2(a)(19) of the Investment Company Act nor parties to the
proceeding, or (b) an independent legal counsel in a written
opinion. The Fund's agreement to indemnify the Distributor, its
officers and trustees and any such controlling person as aforesaid
is expressly conditioned upon the Fund's being promptly notified of
any action brought against the Distributor, its officers or
trustees, or any such controlling person, such notification to be
given by letter or telegram addressed to the Fund at its principal
business office. The Fund agrees promptly to notify the
Distributor of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with
the issue and sale of any Shares.
9.2 The Distributor agrees to indemnify, defend and hold the
Fund, its officers and Directors and any person who controls the
Fund, if any, within the meaning of Section 15 of the Securities
Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
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investigating or defending against such claims, demands or
liabilities and any counsel fees incurred in connection therewith)
which the Fund, its officers and Directors or any such controlling
person may incur under the Securities Act or under common law or
otherwise, but only to the extent that such liability or expense
incurred by the Fund, its Directors or officers or such controlling
person resulting from such claims or demands shall arise out of or
be based upon any alleged untrue statement of a material fact
contained in information furnished in writing by the Distributor to
the Fund for use in the Registration Statement or Prospectus or
shall arise out of or be based upon any alleged omission to state a
material fact in connection with such information required to be
stated in the Registration Statement or Prospectus or necessary to
make such information not misleading. The Distributor's agreement
to indemnify the Fund, its officers and Directors and any such
controlling person as aforesaid, is expressly conditioned upon the
Distributor's being promptly notified of any action brought against
the Fund, its officers and Board of Directors or any such
controlling person, such notification being given to the
Distributor at its principal business office.
Section 10. Duration and Termination of this Agreement
10.1 This Agreement shall become effective as of the date
first above written and shall remain in force for two years from
the date hereof and thereafter, but only so long as such
continuance is specifically approved at least annually by (a) the
Board of Directors of the Fund, or by the vote of a majority of the
outstanding voting securities of the Shares of the Fund, and (b) by
the vote of a majority of those Directors who are not parties to
this Agreement or interested persons of any such parties and who
have no direct or indirect financial interest in this Agreement or
in the operation of the Fund's Plan or in any agreement related
thereto (Rule 12b-1 Directors), cast in person at a meeting called
for the purpose of voting upon such approval.
10.2 This Agreement may be terminated at any time, without the
payment of any penalty, by a majority of the Rule 12b-1 Directors
or by vote of a majority of the outstanding voting securities of
the Shares of the Fund, or by the Distributor, on sixty (60) days'
written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
10.3 The terms "affiliated person," "assignment," "interested
person" and "vote of a majority of the outstanding voting
securities", when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act.
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Section 11. Amendments to this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by (a) the Board of Directors of
the Fund, or by the vote of a majority of the outstanding voting
securities of the Shares of the Fund, and (b) by the vote of a
majority of the Rule 12b-1 Directors cast in person at a meeting
called for the purpose of voting on such amendment.
Section 13. Governing Law
The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York as
at the time in effect and the applicable provisions of the
Investment Company Act. To the extent that the applicable law of
the State of New York, or any of the provisions herein, conflict
with the applicable provisions of the Investment Company Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year above written.
Prudential Mutual Fund
Distributors, Inc.
By:/s/ Robert F. Gunia
-------------------------
Executive Vice President,
Treasurer and Controller
-------------------------
(Title)
PRUDENTIAL MONEY MART ASSETS
By:/s/ Lawrence C. McQuade
-------------------------
(Name)
(Title)
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Exhibit 11
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in Post-Effective Amendment No. 28 to
Registration Statement No. 2-55301 of Prudential-Bache MoneyMart
Assets Inc. of our report dated February 2, 1994, appearing in
the Statement of Additional Information, which is a part of such
Registration Statement, and to the references to us under the
headings "Financial Highlights" in the Prospectus, which is a
part of such Registration Statement, and "Custodian, Transfer and
Dividend Disbursing Agent and Independent Accountants" in the
Statement of Additional Information.
/s/Deloitte & Touche
Deloitte & Touche
New York, New York
February 16, 1994
Exhibit 15(b)
PRUDENTIAL MONEYMART ASSETS
Distribution and Service Plan
Introduction
The Distribution and Service Plan (the Plan) set forth below
which is designed to conform to the requirements of Rule 12b-1
under the Investment Company Act of 1940 (the Investment Company
Act) and Article III, Section 26 of the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. (NASD) has
been adopted by Prudential MoneyMart Assets, (the Fund) and by
Prudential Mutual Fund Distributors, Inc., the Fund's distributor
(the Distributor).
The Fund has entered into a distribution agreement (the
Distribution Agreement) pursuant to which the Fund will employ the
Distributor to distribute shares of the Fund issued by the Fund
(Shares). Under the Plan, the Fund intends to reimburse the
Distributor for costs incurred by the Distributor in distributing
Shares of the Fund and to pay the Distributor a service fee for the
maintenance of shareholder accounts.
A majority of the Board of Directors of the Fund, including a
majority of those Directors who are not "interested persons" of the
Fund (as defined in the Investment Company Act) and who have no
direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the Rule 12b-1 Board of Directors),
have determined by votes cast in person at a meeting called for the
purpose of voting on this Plan that there is a reasonable likelihood
that adoption of this Plan will benefit the
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Fund and its shareholders. Expenditures under this Plan by the
Fund for Distribution Activities (defined below) are primarily
intended to result in the sale of Shares of the Fund within the
meaning of paragraph (a)(2) of Rule 12b-1 promulgated under the
Investment Company Act.
The purpose of the Plan is to create incentives to the
Distributor and/or other qualified broker-dealers and their account
executives to provide distribution assistance to their customers
who are investors in the Fund, to defray the costs and expenses
associated with the preparation, printing and distribution of
prospectuses and sales literature and other promotional and
distribution activities and to provide for the servicing and
maintenance of shareholder accounts.
The Plan
The material aspects of the Plan are as follows:
1. Distribution Activities
The Fund shall engage the Distributor to distribute Shares of
the Fund and to service shareholder accounts using all of the
facilities of the distribution networks of Prudential Securities
Incorporated (Prudential Securities) and Pruco Securities
Corporation (Prusec), including sales personnel and branch office
and central support systems, and also using such other qualified
broker-dealers and financial institutions as the Distributor may
select. Services provided and activities undertaken to distribute
Shares of the Fund are referred to herein as "Distribution
Activities."
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2. Payment of Service Fee
The Fund shall reimburse the Distributor for costs incurred by
it in providing personal service and/or maintaining shareholder
accounts at a rate not to exceed .125 of 1% per annum of the
average daily net assets of the Shares of the Fund (service fee).
The Fund shall calculate and accrue daily amounts reimbursable by
the Shares of the Fund hereunder and shall pay such amounts monthly
or at such other intervals as the Board of Directors may determine.
Costs of the Distributor subject to reimbursement hereunder include
account servicing fees and indirect and overhead costs associated
with providing personal service and/or maintaining shareholder
accounts.
3. Payment for Distribution Activities
The Fund shall reimburse the Distributor for costs incurred by
it in performing Distribution Activities at a rate which, together
with the service fee (described in Section 2 hereof), shall not
exceed .125% per annum of the average daily net assets of the
Shares of the Fund. The Fund shall calculate and accrue daily
amounts reimbursable by the Shares of the Fund hereunder and shall
pay such amounts monthly or at such other intervals as the Board of
Directors may determine.
Costs of the Distributor subject to reimbursement hereunder
are costs of performing Distribution Activities and may include,
among others:
(a) amounts paid to Prudential Securities in
reimbursement of costs incurred by Prudential
Securities in performing services under a
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selected dealer agreement between Prudential
Securities and the Distributor for sale of
Shares of the Fund, including sales
commissions and trailer commissions paid to,
or on account of, account executives and
indirect and overhead costs associated with
Distribution Activities, including central
office and branch expenses;
(b) amounts paid to Prusec in reimbursement of
costs incurred by Prusec in performing
services under a selected dealer agreement
between Prusec and the Distributor for sale of
Shares of the Fund, including sales
commissions and trailer commissions paid to,
or on account of, agents and indirect and
overhead costs associated with Distribution
Activities;
(c) advertising for the Fund in various forms
through any available medium, including the
cost of printing and mailing Fund
prospectuses, statements of additional
information and periodic financial reports and
sales literature to persons other than current
shareholders of the Fund; and
(d) sales commissions (including trailer
commissions) paid to, or on account of,
broker-dealers and financial institutions
(other than Prudential Securities and Prusec)
which have entered into selected dealer
agreements with the Distributor with respect
to shares of the Fund.
4. Quarterly Reports; Additional Information
An appropriate officer of the Fund will provide to the Board
of Directors of the Fund for review, at least quarterly, a written
report specifying in reasonable detail the amounts expended for
Distribution Activities (including payment of the service fee) and
the purposes for which such expenditures were made in compliance
with the requirements of Rule 12b-1. The Distributor will provide
to the Board of Directors of the Fund such additional information
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as the Board of Directors shall from time to time reasonably
request, including information about Distribution Activities
undertaken or to be undertaken by the Distributor.
The Distributor will inform the Board of Directors of the Fund
of the commissions and account servicing fees to be paid by the
Distributor to broker-dealers and financial institutions which have
selected dealer agreements with the Distributor.
5. Effectiveness; Continuation
The Plan shall not take effect until it has been approved by a
vote of a majority of the outstanding voting securities (as defined
in the Investment Company Act) of the Fund.
If approved by a vote of a majority of the outstanding voting
securities of the Fund, the Plan shall, unless earlier terminated
in accordance with its terms, continue in full force and effect
thereafter for so long as such continuance is specifically approved
at least annually by a majority of the Board of Directors of the
Fund and a majority of the Rule 12b-1 Directors by votes cast in
person at a meeting called for the purpose of voting on the
continuation of the Plan.
6. Termination
This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the
outstanding voting securities (as defined in the Investment
Company Act) of the Fund.
7. Amendments
The Plan may not be amended to change the distribution
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expenses to be paid as provided for in Section 3 hereof so as to
increase materially the amounts payable under this Plan unless such
amendment shall be approved by the vote of a majority of the
outstanding voting securities (as defined in the Investment Company
Act) of the Fund. All material amendments of the Plan, including
the addition or deletion of categories of expenditures which are
reimbursable hereunder, shall be approved by a majority of the
Board of Directors of the Fund and a majority of the Rule 12b-1
Directors by votes cast in person at a meeting called for the
purpose of voting on the Plan.
8. Non-interested Directors
While the Plan is in effect, the selection and nomination of
the Directors who are not "interested persons" of the Fund
(non-interested Directors) shall be committed to the discretion of
the non-interested Directors.
9. Records
The Fund shall preserve copies of the Plan and any related
agreements and all reports made pursuant to Section 4 hereof, for a
period of not less than six years from the date of effectiveness of
the Plan, such agreements or reports, and for at least the first
two years in an easily accessible place.
Dated: May 1, 1988
Amended and Restated on: July 1, 1993
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