As filed with the Securities and Exchange Commission
on February 24, 1995
Registration No. 2-55301
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 29 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 20 / /
(Check appropriate box or boxes)
------------------
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):
/ / immediately upon filing pursuant to paragraph (b)
/X/ on February 28, 1995 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount Being Offering Price Aggregate Amount of
Being Registered Registered Per Share* Offering Price** Registration Fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.10 per share indefinite*** N/A N/A N/A
- --------------------------------------------------------------------------------------------------------
Common Stock, par value
$.10 per share 999,531,784 $1.00 $999,531,784 $100.00
========================================================================================================
<FN>
* Computed under Rule 457(d) on the basis of the offering price per share on
the close of business on February 24, 1995.
** Registrant elects to calculate the maximum aggregate offering price
pursuant to Rule 24e-2. $27,875,161,385 of shares was redeemed during the
fiscal year ended December 31, 1994. $26,875,919,601 of shares was used for
reductions pursuant to paragraph (c) of Rule 24f-2 during the fiscal year
ended December 31, 1994. $999,241,784 of shares is the amount of redeemed
shares used for reduction for this amendment.
*** Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. The Rule 24f-2 Notice for the Registrant's most recent fiscal
year ended December 31, 1994 will be filed on or before February 28, 1995.
================================================================================
</FN>
</TABLE>
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
<TABLE>
<CAPTION>
N-1A Item No. Location
- ----------------------------------------------------------------------- ------------------------------
Part A
<S> <C> <C>
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
Offered.................................................... Purchase and Redemption of
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>
<PAGE>
Prudential MoneyMart Assets
- --------------------------------------------------------------------------------
Prospectus dated February 28, 1995
- --------------------------------------------------------------------------------
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. There can be no assurance that
the Fund's investment objective will be achieved. See "How the Fund
Invests--Investment Objective and Policies."
The Fund's address is One Seaport Plaza, New York, New York 10292, and its
telephone number is (800) 225-1852.
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."
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 28, 1995, 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.
- --------------------------------------------------------------------------------
Investors are advised to read this Prospectus and retain it for future
reference.
- --------------------------------------------------------------------------------
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>
FUND HIGHLIGHTS
The following summary is intended to highlight certain information
contained in this Prospectus and is qualified in its entirety by the more
detailed information appearing elsewhere herein.
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. There can be no assurance that the Fund's investment objective will be
achieved. See "How the Fund Invests--Investment Objective and Policies" at
page 6.
Risk Factors and Special Characteristics
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 12.
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,
1995, PMF served as manager or administrator to 69 investment companies,
including 39 mutual funds, with aggregate assets of approximately $45 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 10.
2
<PAGE>
What Is the Minimum Investment?
The minimum initial investment is $1,000. The minimum subsequent investment
is $100. Prudential Securities reserves the right to impose a higher minimum
subsequent amount from time to time as it may deem appropriate. 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 14 and "Shareholder Guide--Shareholder Services" at page 20.
How Do I Purchase Shares?
You may purchase shares of the Fund through Prudential Securities
Incorporated (Prudential Securities or PSI), 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 12 and "Shareholder
Guide--How to Buy Shares of the Fund" at page 14.
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 17.
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 12.
3
<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 .................................................. .301%
12b-1 Fees ....................................................... .125%
Other Expenses ................................................... .281%
Total Fund Operating Expenses .................................... .707%
<TABLE>
<CAPTION>
1 3 5 10
Example year years years years
- ------- ---- ----- ----- -----
<S> <C> <C> <C> <C>
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
</TABLE>
The above example is based on data for the Fund's fiscal year ended December 31,
1994. 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" includes operating expenses of
the Fund, such as directors' and professional fees, registration fees, reports
to shareholders and transfer agency and custodian fees.
4
<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, 1994, has been audited by Deloitte & Touche LLP, 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,
-----------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <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 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income and net
realized gains .............. .037 .027 .035 .058 .077 .086 .069 .061 .063 .076
Dividends and distributions ... (.037) (.027) (.035) (.058) (.077) (.086) (.069) (.061) (.063) (.076)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year .. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return+:................. 3.72% 2.70% 3.59% 5.95% 8.00% 8.96% 7.11% 6.33% 6.48% 7.92%
==== ==== ==== ==== ==== ==== ==== ==== ==== ====
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) .$6,544,880 7,318,633 6,703,281 7,138,159 7,411,932 8,168,972 5,240,662 4,620,542 3,875,978 3,306,841
Average net assets (000) ......$7,071,381 7,742,989 7,116,739 7,763,251 8,262,329 6,947,060 5,139,264 4,412,175 3,846,982 3,368,056
Ratios to average net assets:
Expenses, including
distribution fee ............ .71% .71% .66% .68% .73% .69% .71% .69% .64% .62%
Expenses, excluding
distribution fee ............ .58% .58% .54% .56% .60% .57% .58% .57% .52% .49%
Net investment income ......... 3.65% 2.63% 3.43% 5.72% 7.62% 8.57% 6.98% 6.06% 6.22% 7.76%
- --------------------
<FN>
+ Total return is calculated assuming a purchase of shares on the first day and
a sale on the last day of each period reported and includes reinvestment of
dividends and distributions.
</FN>
</TABLE>
5
<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, 1994:
Value of hypothetical account at end of period............... $1.001013253
Value of hypothetical account at beginning of period......... 1.000000000
-----------
Base period return........................................... $ .001013253
============
Current yield ($.001013253 X (365/7))........................ 5.28%
Effective annual yield, assuming weekly compounding.......... 5.43%
The yield will fluctuate from time to time and does not indicate future
performance.
The weighted average life to maturity of the Fund's portfolio on December
31, 1994 was 31 days.
Yield is computed in accordance with a standardized formula described in
the Statement of Additional Information. In addition, 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., Morningstar
Publications, Inc., IBC/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 Fund's Board of 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
6
<PAGE>
there is generally not a market. "Eurodollars" are U.S. dollars deposited
in banks outside the United States; the Fund invests in Eurodollar instruments
of foreign and domestic banks.
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 Ratings Group (S&P), Aa or Prime-2 by
Moody's Investors Service (Moody's) or AA or Duff 2 by Duff & Phelps Credit
Rating Co. (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 (SEC). 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 period of maturity is usually quite
short, possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the
7
<PAGE>
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
if the value of the instruments declines, the Fund will require additional
collateral. If the seller defaults and the value of the collateral securing the
repurchase agreement declines, the Fund may incur a loss. The Fund participates
in a joint repurchase account with other investment companies managed by
Prudential Mutual Fund Management, Inc. pursuant to an order of the 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.
Floating Rate and Variable Rate Securities
The Fund may purchase "floating rate" and "variable rate" obligations. The
interest rates on such obligations fluctuate generally with changes in market
interest rates, and in some cases the Fund is able to demand repayment of the
principal amount of such obligations at par plus accrued interest. For
additional information concerning variable rate and floating rate obligations,
see "Investment Objectives and Policies" in the Statement of Additional
Information.
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.
Illiquid Securities
The Fund may invest up to 10% of its net assets in illiquid securities
including securities with legal or contractual restrictions on resale
(restricted securities), securities that are not readily marketable in
securities markets either within
8
<PAGE>
or outside of the United States, privately placed commercial paper and
repurchase agreements which have a maturity of longer than seven days.
Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, as amended (the Securities Act), and privately placed
commercial paper that have a readily available market are not considered
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 applicable notice period.
Other Considerations
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.
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, 1994, 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, 1994, the Fund paid a
management fee of .301% of the Fund's average net assets. See "Manager" in the
Statement of Additional Information.
As of January 31, 1995, PMF served as the manager to 39 open-end investment
companies, constituting all of the Prudential Mutual Funds, and as manager or
administrator to 30 closed-end investment companies with aggregate assets of
approximately $45 billion.
9
<PAGE>
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 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 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 or PSI) and representatives of 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, 1994, 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, 1994, PMFD incurred distribution
expenses in the aggregate of $8,839,226, 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 out of its own
resources 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.
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On October 21, 1993, PSI entered into an omnibus settlement with the SEC,
state securities regulators (with the exception of the Texas Securities
Commissioner, who joined the settlement on January 18, 1994) and the National
Association of Securities Dealers, Inc. (the NASD) to resolve allegations that
from 1980 through 1990 PSI sold certain limited partnership interests in
violation of securities laws to persons for whom such securities were not
suitable and misrepresented the safety, potential returns and liquidity of these
investments. Without admitting or denying the allegations asserted against it,
PSI consented to the entry of an SEC Administrative Order which stated that
PSI's conduct violated the federal securities laws, directed PSI to cease and
desist from violating the federal securities laws, pay civil penalties, and
adopt certain remedial measures to address the violations.
Pursuant to the terms of the SEC settlement, PSI agreed to the imposition
of a $10,000,000 civil penalty, established a settlement fund in the amount of
$330,000,000 and procedures to resolve legitimate claims for compensatory
damages by purchasers of the partnership interests. PSI has agreed to provide
additional funds, if necessary, for the purpose of the settlement fund. PSI's
settlement with the state securities regulators included an agreement to pay a
penalty of $500,000 per jurisdiction. PSI consented to a censure and to the
payment of a $5,000,000 fine in settling the NASD action.
In October 1994, a criminal complaint was filed with the United States
Magistrate for the Southern District of New York alleging that PSI committed
fraud in connection with the sale of certain limited partnership interests in
violation of federal securities laws. An agreement was simultaneously filed to
defer prosecution of these charges for a period of three years from the signing
of the agreement, provided that PSI complies with the terms of the agreement.
If, upon completion of the three year period, PSI has complied with the terms of
the agreement, no prosecution will be instituted by the United States for the
offenses charged in the complaint. If on the other hand, during the course of
the three year period, PSI violates the terms of the agreement, the U.S.
Attorney can then elect to pursue these charges. Under the terms of the
agreement, PSI agreed, among other things, to pay an additional $330,000,000
into the fund established by the SEC to pay restitution to investors who
purchased certain PSI limited partnership interests.
For more detailed information concerning the foregoing matters, see
"Distributor" in the Statement of Additional Information, a copy of which may
be obtained at no cost by calling 1-800-225-1852.
The Fund is not affected by PSI's financial condition and is an entirely
separate legal entity from PSI, which has no beneficial ownership therein and
the Fund's assets, which are held by State Street Bank and Trust Company, an
independent custodian, are separate and distinct from PSI.
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" 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 Board of
Directors has 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
(the Internal Revenue Code). 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 the Internal Revenue Code, 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 of 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. 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), Attention: Investment Services,
P.O. Box 15020, New Brunswick, New Jersey 08906-5020. The minimum initial
investment is $1,000. The minimum subsequent investment is $100. Prudential
Securities reserves the right to impose a higher minimum subsequent amount from
time to time as it may deem appropriate. 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 deter-
mined 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), the Fund's custodian). 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
certificates.
The Fund reserves the right, in its discretion, to reject any purchase
order (including an exchange into the Fund) 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 may be subject to postage and other charges
imposed by your dealer.
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, at
your request, 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
Autosweep 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 (Automatic
Investment) 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 the order by
Prudential Securities from the client. 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
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 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 (State Street), 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 utilizing Federal Funds. 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(R) 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. Shares
may not be purchased until all debits, overdrafts 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 Preferred
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 net asset value 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
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redemption procedure and who wishes to pay for a securities transaction or
satisfy any other debit balance 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 the debit balance 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
Prudential Mutual Fund Services, Inc., Attention: Redemption Services, P.O. Box
15010, New Brunswick, New Jersey 08906-5010. In this case, all stock
certificates and certain written requests for redemption must be endorsed by the
shareholder with signature guaranteed, as described above. 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 Prudential Mutual Fund Services, Inc., Attention
Account Maintenance, P.O. Box 15015, New Brunswick, New Jersey 08906-5015,
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., at the address set forth above.
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 you 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.
Redemption in Kind. If the Board of Directors determines 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
18
<PAGE>
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.
90-Day Repurchase Privilege. If you redeem your shares and have not
previously exercised the repurchase privilege, you may reinvest any portion or
all of the proceeds of such redemption in shares of the Fund at the NAV next
determined after the order is received, which must be within 90 days after the
date of the redemption. You will receive pro rata credit for any contingent
deferred sales charge paid in connection with the redemption. You must notify
the Fund's Transfer Agent, either directly or through Prudential Securities or
Prusec, at the time the repurchase privilege is exercised, that you are entitled
to credit for any contingent deferred sales charge you previously paid. 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
for federal income tax purposes.
Class B and Class C Purchase Privilege. You may direct that the proceeds of
a redemption of Fund shares be invested in Class B shares or Class C 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.
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. 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 and
Class C 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. You may not exchange your
shares for Class C Shares of the Prudential Mutual Funds.
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.
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. 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.
19
<PAGE>
You may also 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 60
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:
o 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.
o 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 representative or the Transfer
Agent directly.
o 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.
o Systematic Withdrawal Plan. A systematic withdrawal plan is available for
shareholders which provides for monthly or quarterly checks. For additional
information about the service, you may contact your Prudential Securities
financial adviser, Prusec representative or Transfer Agent directly.
o 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.
o 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."
20
<PAGE>
o 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, New York 10292.
o 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.
21
<PAGE>
(This page has been intentionally left blank.)
<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 Diversified Bond Fund, Inc.
Prudential GNMA Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential Structured Maturity Fund, Inc.
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
Hawaii Income 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, Inc.
Global Funds
Prudential Europe Growth Fund, Inc.
Prudential Global Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Global Natural Resources Fund, Inc.
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 Allocation Fund
Conservatively Managed Portfolio
Strategy Portfolio
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Growth Opportunity Fund, Inc.
Prudential IncomeVertible(R) Fund, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Strategist Fund, Inc.
Prudential Utility Fund, Inc.
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Money Market Funds
o 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
o 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
o Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
o Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
A-1
<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
Risk Factors and Special Characteristics ................. 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 .............................................. 10
Portfolio Transactions ................................... 11
Custodian and Transfer and
Dividend Disbursing Agent .............................. 11
HOW THE FUND VALUES ITS SHARES ............................. 12
TAXES, DIVIDENDS AND DISTRIBUTIONS ......................... 12
GENERAL INFORMATION ........................................ 13
Description of Shares .................................... 13
Additional Information ................................... 14
SHAREHOLDER GUIDE .......................................... 14
How to Buy Shares of the Fund ............................ 14
How to Sell Your Shares .................................. 17
How to Exchange Your Shares .............................. 19
Shareholder Services ..................................... 20
PRUDENTIAL MUTUAL FUND FAMILY .............................. A-1
- --------------------------------------------------------------------------------
MF 108A 430230J
CUSIP No.:74435H-10-2
Prudential
MoneyMart
Assets
----------
Prudential Mutual Funds
Building Your Future
On Our Strength SM
PROSPECTUS
February 28, 1995
<PAGE>
PRUDENTIAL
MONEYMART ASSETS
Statement of Additional Information
Dated February 28, 1995
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. There
can be no assurance that the Fund's investment objective will be achieved. See
"Investment Objective and Policies." 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 28, 1995, a copy
of which may be obtained from the Fund upon request at the address noted above.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Cross-
reference
to page in
Page Prospectus
---- ----------------
<S> <C> <C>
General Information and History............................................. B-2 13
Investment Objective and Policies........................................... B-2 6
Investment Restrictions..................................................... B-3 9
Suitability for Investors................................................... B-4 --
Calculation of Yield........................................................ B-5 6
Directors and Officers...................................................... B-5 9
Manager..................................................................... B-8 9
Distributor................................................................. B-9 10
Purchase and Redemption of Fund Shares...................................... B-10 14
Shareholder Investment Account.............................................. B-12 20
Dividends................................................................... B-14 12
Net Asset Value............................................................. B-14 12
Portfolio Transactions...................................................... B-14 11
Taxes....................................................................... B-15 12
Custodian, Transfer and Dividend Disbursing Agent and Independent
Accountants............................................................... B-16 11
Financial Statements........................................................ B-17 --
Independent Auditors' Report................................................ B-25 --
Appendix A--Description of Ratings.......................................... A-1 --
</TABLE>
- --------------------------------------------------------------------------------
MF108B
<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.
Floating Rate and Variable Rate Securities. The Fund may purchase floating
rate and variable rate securities. Investments in floating or variable rate
securities normally will involve securities which provide that the rate of
interest is set as a spread to a designated base rate, such as rates on Treasury
bills, and, in some cases, that the purchaser can demand payment of the
obligation at specified intervals or after a specified notice period (in each
case a period of less than thirteen months) at par plus accrued interest, which
amount may be more or less than the amount paid for them. Variable rate
securities provide for a specified periodic adjustment in the interest rate,
while floating rate securities have an interest rate which changes whenever
there is a change in the designated base interest rate.
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 net
assets in illiquid securities, including securities that are illiquid by virtue
of the absence of a readily available market or legal or contractual
restrictions on resale and repurchase agreements which have a maturity of longer
than seven days. Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the Securities Act of 1933, as amended (Securities Act),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid
B-2
<PAGE>
securities because of the potential for delays on resale and uncertainty in
valuation. Limitations on resale may have an adverse effect on the marketability
of portfolio securities and a mutual fund might be unable to dispose of
restricted or other illiquid securities promptly or at reasonable prices and
might thereby experience difficulty satisfying redemptions within seven days. A
mutual fund might also have to register such restricted securities in order to
dispose of them resulting in additional expense and delay. Adverse market
conditions could impede such a public offering of securities.
In recent years, however, a large institutional market has developed for
certain securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.
Rule 144A of the Securities Act allows for a broader institutional trading
market for securities otherwise subject to restriction on resale to the general
public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. The investment adviser anticipates that the
market for certain restricted securities such as institutional commercial paper
and foreign securities will expand further as a result of this new regulation
and the development of automated systems for the trading, clearance and
settlement of unregistered securities of domestic and foreign issuers, such as
the PORTAL System sponsored by the National Association of Securities Dealers,
Inc.
Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act and commercial paper for which there is a readily available
market will not be deemed to be illiquid. 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). In addition, in order for commercial paper that is issued in
reliance on Section 4(2) of the Securities Act to be considered liquid, (i) it
must be rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations (NRSRO), or if only one
NRSRO rates the securities, by that NRSRO, or, if unrated, be of comparable
quality in the view of the investment adviser; and (ii) it must not be "traded
flat" (i.e., without accrued interest) or in default as to principal or
interest. 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. A "majority of the
Fund's outstanding voting securities," when used in this Statement of
Additional Information, means the lesser of (i) 67% of the voting shares
represented at a meeting at which more than 50% of the outstanding voting shares
are present in person or represented by proxy or (ii) more than 50% of the
outstanding voting shares.
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
B-3
<PAGE>
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.
In order to comply with certain state "blue sky" restrictions, the Fund
will not as a matter of operating policy, (i) mortgage, pledge or hypothecate in
excess of 10% of its net assets, or (ii) invest in securities of issuers which
are restricted as to disposition, if more than 15% of its total assets would be
invested in such securities (this restriction shall not apply to mortgage-backed
securities, asset backed securities or obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities).
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.
B-4
<PAGE>
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>
William S. Field (65) Director Retired Chairman, Prudential Equity Investors,
c/o Prudential Mutual Inc., a subsidiary of The Prudential Insurance
Fund Management, Inc. Company of America (Prudential) (1984-1994);
One Seaport Plaza Senior Vice President, Prudential (since 1979);
New York, New York served in various capacities at Prudential (since
10292 1953); Director of Sunglass Hut International,
Inc. and Commodities Corp.
Delayne Dedrick Gold Director Marketing and Management Consultant.
(56)
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, New York
10292
*Harry A. Jacobs, Jr. Director Senior Director (since January 1986) of Prudential
(73) Securities Incorporated (Prudential Securities);
One Seaport Plaza formerly, Interim Chairman and Chief Executive
New York, New York Officer (June 1993-October 1993) of Prudential
10292 Mutual Fund Management, Inc. (PMF); 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 Total Return 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
(67) Director Director, Investment Banking, Prudential
One Seaport Plaza Securities (1988-1991); Director of Czech and
New York, New York Slovak American Enterprise Fund (since October
10292 1994), 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 Total Return Fund, Inc. and The
High Yield Income Fund Inc.
</TABLE>
B-5
<PAGE>
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S>
<C> <C>
Thomas A. Owens, Jr. Director Consultant; Director of EMCORE Corp. (manufacturer
(72) of electronic materials).
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, New York
10292
*Richard A. Redeker Director President, Chief Executive Officer and Director
(51) (since October 1993) of PMF; Executive Vice
One Seaport Plaza President, Director and Member of Operating
New York, New York Committee (since October 1993), Prudential
10292 Securities; Director (since October 1993) of
Prudential Securities Group, Inc. (PSG);
Executive Vice President (since July 1994), The
Prudential Investment Corporation (PIC);
Director (since January 1994) of Prudential
Mutual Fund Distributors (PMFD) and Prudential
Mutual Fund Services, Inc. (PMFS); formerly
Senior Executive Vice President and Director of
Kemper Financial Services, Inc. (September
1978-September 1993); Director of The Global
Government Plus Fund, Inc., The Global Total
Return Fund, Inc. and The High Yield Income Fund,
Inc.
Sidney M. Spielvogel Director Managing Director, Corporate Capital Consultants,
(69) Inc. (since April 1994); formerly, Vice President
c/o Prudential Mutual (January 1992-March 1994) of Reich & Co., Inc.;
Fund Management, Inc. Vice President (March 1988-January 1992) of
One Seaport Plaza Jesup, Josephthal & Co. Inc.; formerly Managing
New York, New York Director, Corporate Finance (January 1986-January
10292 1988) of Prudential Securities; prior thereto,
Senior Vice President (more than five years) of
Prudential Securities; Director of Supreme
Equipment & Systems Corporation (until July
1993).
Nancy H. Teeters (64) 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 Total
Return Fund, Inc.
Robert H. Wellington Director Retired Chairman and Chief Executive Officer (since
(72) September 1990), Chairman and CEO (1988-September
c/o Prudential Mutual 1990), President and Chief Executive Officer
Fund Management, Inc. (1981-1988), AMSTED Industries Incorporated
One Seaport Plaza (diversified manufacturer of railroad,
New York, New York construction and building and industrial
10292 products); Director of AMSTED Industries
Incorporated.
Robert F. Gunia (48) Vice President Chief Administrative Officer (since July 1990),
One Seaport Plaza Director (since January 1989), Executive Vice
New York, New York President, Treasurer and Chief Financial Officer
10292 (since June 1987) of PMF; Senior Vice President
(since March 1987) of Prudential Securities;
Executive Vice President, Treasurer, Comptroller
and Director, PMFD (since March 1991); Director,
PMFS (since June 1987); Vice President and
Director of The Asia Pacific Fund,Inc. (since
May 1989).
S. Jane Rose (49) Secretary Senior Vice President (since January 1991), Senior
One Seaport Plaza Counsel (since June 1987) and First Vice
New York, New York President (June 1987-December 1990) of PMF;
10292 Senior Vice President and Senior Counsel (since
July 1992) of Prudential Securities; formerly
Vice President and Associate General Counsel of
Prudential Securities.
Grace Torres (35) Treasurer and First Vice President (since March 1994), Prudential
One Seaport Plaza Principal Financial Mutual Fund Management, Inc.; First Vice
New York, New York and Accounting President of Prudential Securities (since March
10292 Officer 1994); prior thereto, Vice President, Bankers
Trust Corporation.
</TABLE>
B-6
<PAGE>
<TABLE>
<CAPTION>
Position Business Affiliation and
Name and Address with Fund Principal Occupation
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C>
Deborah A. Docs (37) Assistant Secretary Vice President (since January 1993), Associate Vice
One Seaport Plaza President (January 1990-December 1992), Assistant
New York, New York General Counsel (since November 1991), Assistant
10292 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.
Directors may receive their Directors' fees pursuant to a deferred 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, pursuant to an SEC exemptive
order, at the daily rate of return of the Fund (the Fund rate). Payment of the
interest so accrued is also deferred and accruals become payable at the option
of the 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 PIC currently
receives $10,000 as an annual Director's fee, plus expenses, and $1,000 plus
expenses for service on each Board committee. An aggregate of approximately
$66,000 in fees was paid by the Fund to such Directors as a group for 1994.
The following table sets forth the aggregate compensation paid by the Fund
for the fiscal year ended December 31, 1994 to the Directors who are not
affiliated with the Manager and the aggregate compensation paid to such
Directors for service on the Fund's board and that of all other investment
companies managed by Prudential Mutual Fund Management, Inc. (Fund Complex) for
the calendar year ended December 31, 1994.
Compensation Table
<TABLE>
<CAPTION>
Total
Pension or Compensation
Retirement From Fund
Aggregate Benefits Accrued Estimated Annual and Fund
Compensation As Part of Fund Benefits Upon Complex Paid
Name and Position From Fund Expenses Retirement to Directors
- ------------------------------------------ ------------ ----------------- ----------------- -------------
<S> <C> <C> <C> <C>
William S. Field--Director $ 6,000 None N/A $ 6,000(1)*
Delayne Dedrick Gold--Director $ 12,000 None N/A $185,000(24)*
Thomas A. Owens, Jr.--Director $ 12,000 None N/A $100,500(12)*
Sidney M. Spielvogel--Director $ 12,000 None N/A $ 12,000(1)*
Nancy Hays Teeters--Director $ 12,000 None N/A $ 95,000(12)*
Robert H. Wellington--Director $ 12,000 None N/A $ 27,000(3)*
- ------------------
* Indicates number of funds in Fund Complex (including the Fund) to which
aggregate compensation relates.
</TABLE>
As of January 27, 1995, the Directors and officers of the Fund, as a group,
beneficially owned less than one percent of the outstanding shares of Common
Stock of the Fund.
As of January 27, 1995, Prudential Securities held, solely of record on
behalf of other persons, 6,440,669,875 shares of the Fund's Common Stock,
representing approximately 95% of the shares then outstanding. Prudential
Securities had the sole power to vote 83,315,752 shares held as of January 27,
1995 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-7
<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, 1995, PMF managed and/or administered open-end and
closed-end management investment companies with assets of approximately $45
billion. According to the Investment Company Institute, as of August 31, 1994,
the Prudential Mutual Funds were the 12th largest family of mutual funds in the
United States.
For its services, PMF receives, pursuant to a management agreement (the
Management Agreement) with the Fund, 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. No such reductions were required during the fiscal year ended December
31, 1994. 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 11, 1994, and was approved by shareholders of the Fund on April 27,
1988.
For the fiscal years ended December 31, 1994, 1993 and 1992, PMF received
net management fees of $21,320,747, $23,332,701, and $21,422,436, respectively.
B-8
<PAGE>
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 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 staff, including 7 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 11 1994, 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.
The Manager and the Subadviser are subsidiaries of Prudential which, as of
December 31, 1994, is one of the largest financial institutions in the world and
the largest insurance company in North America. Prudential has been engaged in
the insurance business since 1875. In July 1994, Institutional Investor ranked
Prudential the second largest institutional money manager of the 300 largest
money management organizations in the United States as of December 31, 1993.
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, 1994, PMFD incurred distribution
expenses in the aggregate of $8,839,226, all of which was recovered through the
distribution fee paid by the Fund.
It is estimated that of this amount, 0.8% ($68,030) was spent on printing
and mailing of prospectuses to other than current shareholders and 99.2%
($8,771,196) on the aggregate of (i) account servicing fee credits to Prudential
Securities branch offices for payments of account servicing fees to account
executives (85.3% or 7,542,382) and (ii) an allocation of overhead and other
branch office distribution-related expenses (13.9% or 1,228,814). 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 11, 1994. 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 (the Rule 12b-1 Directors) 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
B-9
<PAGE>
the Rule 12b-1 Directors 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, the Directors will review 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 expenditures. In addition, as long as the Plan remains in
effect, the selection and nomination of Directors shall be committed to the Rule
12b-1 Directors.
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 Rule 12b-1
Directors on May 11, 1994.
On October 21, 1993, PSI entered into an omnibus settlement with the SEC,
state securities regulators in 51 jurisdictions and the NASD to resolve
allegations that PSI sold interests in more than 700 limited partnerships (and a
limited number of other types of securities) from January 1, 1980 through
December 31, 1990, in violation of securities laws to persons for whom such
securities were not suitable in light of the individuals' financial condition or
investment objectives. It was also alleged that the safety, potential returns
and liquidity of the investments had been misrepresented. The limited
partnerships principally involved real estate, oil and gas producing properties
and aircraft leasing ventures. The SEC Order (i) included findings that PSI's
conduct violated the federal securities laws and that an order issued by the SEC
in 1986 requiring PSI to adopt, implement and maintain certain supervisory
procedures had not been complied with; (ii) directed PSI to cease and desist
from violating the federal securities laws and imposed a $10 million civil
penalty; and (iii) required PSI to adopt certain remedial measures including
the establishment of a Compliance Committee of its Board of Directors. Pursuant
to the terms of the SEC settlement, PSI established a settlement fund in the
amount of $330,000,000 and procedures, overseen by a court approved Claims
Administrator, to resolve legitimate claims for compensatory damages by
purchasers of the partnership interests. PSI has agreed to provide additional
funds, if necessary, for that purpose. PSI's settlement with the state
securities regulators included an agreement to pay a penalty of $500,000 per
jurisdiction. PSI consented to a censure and to the payment of a $5,000,000 fine
in settling the NASD action. In settling the above referenced matters, PSI
neither admitted nor denied the allegations asserted against it.
On January 18, 1994, PSI agreed to the entry of a Final Consent Order and a
Parallel Consent Order by the Texas Securities Commissioner. The firm also
entered into a related agreement with the Texas Securities Commissioner. The
allegations were that the firm had engaged in improper sales practices and other
improper conduct resulting in pecuniary losses and other harm to investors
residing in Texas with respect to purchases and sales of limited partnership
interests during the period of January 1, 1980 through December 31, 1990.
Without admitting or denying the allegations, PSI consented to a reprimand,
agreed to cease and desist from future violations, and to provide voluntary
donations to the State of Texas in the aggregate amount of $1,500,000. The firm
agreed to suspend the creation of new customer accounts, the general
solicitation of new accounts, and the offer for sale of securities in or from
PSI's North Dallas office to new customers during a period of twenty consecutive
business days, and agreed that its other Texas offices would be subject to the
same restrictions for a period of five consecutive business days. PSI also
agreed to institute training programs for its securities salesmen in Texas.
On October 27, 1994, Prudential Securities Group, Inc. and PSI entered into
agreements with the United States Attorney deferring prosecution (provided PSI
complies with the terms of the agreement for three years) for any alleged
criminal activity related to the sale of certain limited partnership programs
from 1983 to 1990. In connection with these agreements, PSI agreed to add the
sum of $330,000,000 to the Fund established by the SEC and executed a
stipulation providing for a reversion of such funds to the United States Postal
Inspection Service. PSI further agreed to obtain a mutually acceptable outside
director to sit on the Board of Directors of PSG and the Compliance Committee of
PSI. The new director will also serve as an independent "ombudsman" whom PSI
employees can call anonymously with complaints about ethics and compliance.
Prudential Securities shall report any allegations or instances of criminal
conduct and material improprieties to the new director. The new director will
submit compliance reports which shall identify all such allegations or instances
of criminal conduct and material improprieties every three months for a
three-year period.
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.
B-10
<PAGE>
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 Bank and Trust
Company (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, 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.
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
Pruco Securities Corporation (Prusec) signature guarantees may be obtained from
the agency or office manager of most Prudential Insurance and Financial Services
or Preferred 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.
B-11
<PAGE>
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)
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 or Class
C 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.
B-12
<PAGE>
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. Stock 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 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 at net asset
value on shares held under this plan.
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 systematic withdrawal plan may be
terminated at any time, and the Distributor reserves the right to initiate a fee
of up to $5 per withdrawal, upon 30 days' written notice to the shareholder.
Withdrawal payments should not be considered as dividends, yield or income.
If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted. Furthermore, each withdrawal constitutes a
redemption of shares, and any gain or loss realized must be recognized for
federal income tax purposes. Each shareholder should consult his or her own tax
adviser with regard to the tax consequences of the systematic withdrawal 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-deferred 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.
<TABLE>
<CAPTION>
Tax-Deferred Compounding<F1>
Contributions Personal
Made Over: Savings IRA
- -------------- --------- ---------
<S> <C> <C>
10 years $ 26,165 $ 31,291
15 years 44,675 58,649
20 years 68,109 98,846
25 years 97,780 157,909
30 years 135,346 244,692
<FN>
- ---------------
<F1> 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.
</FN>
</TABLE>
B-13
<PAGE>
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 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 investment income 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 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
B-14
<PAGE>
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, 1994, 1993 and
1992.
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 net investment income and
capital gains, if any, realized during the taxable year which is distributed to
shareholders, provided that it distributes at least 90% of its net investment
income and short-term capital gains, and permits net capital gains, if any, of
the Fund (i.e., the excess of net long-term capital gains over net short-term
capital losses) to be treated as long-term capital gains of the shareholders,
regardless of how long shareholders have held their shares in the Fund.
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).
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 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.
B-15
<PAGE>
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, 1994, the Fund incurred fees of approximately $15,538,800 for
such services. As of December 31, 1994, approximately $2,661,400 of such fees
were due to PMFS.
Deloitte & Touche LLP, Two World Financial Center, New York, New York
10281, serves as the Fund's independent public accountants and, in that
capacity, audits the Fund's annual financial statements.
B-16
<PAGE>
PRUDENTIAL MONEYMART ASSETS Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
BANK NOTES--9.9%
First National Bank of
Chicago
$131,500 5.69%, 2/22/95............. $ 131,500,000
17,000 5.18%, 2/27/95............. 16,984,902
NationsBank of Dallas,
Texas, NA
55,000 6.03%, 1/31/95............. 55,000,000
PNC Bank, Ohio, NA
36,000 3.50%, 1/31/95............. 35,996,238
PNC Bank, Pittsburgh
Pennsylvania, NA
100,000 5.52%, 1/6/95.............. 99,998,893
119,000 5.15%, 2/22/95............. 119,000,320
Republic National Bank of
New York
193,000 4.30%, 3/8/95.............. 192,905,864
--------------
Total Bank Notes
(amortized cost
$651,386,217)............ 651,386,217
--------------
CERTIFICATES OF DEPOSIT--
EURODOLLAR--0.9%
Bayerische Vereinsbank AG
59,000 5.83%, 1/23/95
(amortized cost
$59,000,714)............. 59,000,714
--------------
CERTIFICATES OF DEPOSIT--
YANKEE--18.4%
Bank of Tokyo
100,000 6.46%, 3/30/95............. 100,000,000
Bank of Montreal
345,000 5.80%, 1/30/95............. 345,000,000
Caisse Nationale De Credit
Agricole
9,000 5.56%, 1/30/95............. 8,998,139
Fuji Bank, Ltd.
75,000 5.83%, 1/17/95............. 75,000,000
100,000 5.91%, 1/23/95............. 100,000,000
National Westminster Bank,
Plc.
35,000 5.54%, 1/31/95............. 34,991,966
Sanwa Bank Ltd.
45,000 5.85%, 1/23/95............. 45,000,000
50,000 6.04%, 2/2/95.............. 50,000,000
Societe Generale
North America, Inc.
67,000 5.65%, 2/6/95.............. 67,000,000
263,000 5.65%, 2/7/95.............. 263,000,000
Sumitomo Bank, Ltd.
13,000 5.89%, 1/25/95............. 13,000,000
50,000 5.96%, 1/30/95............. 50,000,000
53,000 6.06%, 2/1/95.............. 53,000,000
--------------
Total Certificates of
Deposit--Yankee
(amortized cost
$1,204,990,105).......... 1,204,990,105
--------------
COMMERCIAL PAPER--51.8%
American General Finance
Corp.
15,000 5.46%, 1/17/95............. 14,963,600
American Home Products
Corp.
145,763 5.90%, 1/31/95............. 145,046,332
American Honda Finance
Corp.
23,600 5.98%, 1/31/95............. 23,482,393
12,100 6.00%, 1/31/95............. 12,039,500
Aristar, Inc.
6,000 5.85%, 1/17/95............. 5,984,400
11,000 5.54%, 1/23/95............. 10,962,759
Associates Corp. of North
America
10,000 5.77%, 1/25/95............. 9,961,533
163,000 5.77%, 1/30/95............. 162,242,367
50,000 6.05%, 1/30/95............. 49,756,319
14,000 5.77%, 1/31/95............. 13,932,683
27,000 6.25%, 3/14/95............. 26,662,500
Bankers Trust New York
Corp.
200,000 5.44%, 1/23/95............. 199,335,111
</TABLE>
See Notes to Financial Statements.
B-17
<PAGE>
PRUDENTIAL MONEYMART ASSETS
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--(cont'd.)
Beneficial Corp.
$ 40,000 6.25%, 3/15/95............. $ 39,493,056
Chrysler Financial Corp.
45,000 5.75%, 1/18/95............. 44,877,813
83,000 5.75%, 1/19/95............. 82,761,375
Ciesco, Inc.
12,000 5.50%, 1/11/95............. 11,981,667
CIT Group Holdings, Inc.
10,000 5.50%, 1/17/95............. 9,975,556
100,000 5.77%, 1/31/95............. 99,519,167
44,000 5.97%, 2/1/95.............. 43,773,803
39,000 6.27%, 3/13/95............. 38,517,733
Commercial Credit Co.
24,000 5.75%, 1/31/95............. 23,885,000
Dean Witter, Discover & Co.
22,000 5.78%, 1/23/95............. 21,922,291
8,859 5.97%, 2/1/95.............. 8,813,457
Deere & Co.
46,000 6.05%, 2/1/95.............. 45,760,353
Duracell Inc.
11,000 6.30%, 2/10/95............. 10,923,000
Ford Motor Credit Corp.
342,900 5.78%, 2/1/95.............. 341,193,311
General Electric Capital
Corp.
37,000 5.43%, 1/12/95............. 36,938,611
36,000 5.50%, 1/12/95............. 35,939,500
100,000 5.50%, 1/13/95............. 99,816,667
99,000 5.78%, 2/2/95.............. 98,491,360
69,000 6.45%, 4/18/95............. 67,677,213
General Motors Acceptance
Corp.
339,500 5.74%, 1/17/95............. 338,633,898
Greyhound Financial Corp.
7,150 6.20%, 1/13/95............. 7,135,223
5,000 6.32%, 2/7/95.............. 4,967,522
Greyhound Financial Corp.
6,000 6.33%, 2/7/95.............. 5,960,965
25,000 6.29%, 2/8/95.............. 24,834,014
Hanson Finance (U.K.), Plc.
31,150 6.28%, 3/1/95.............. 30,829,397
22,100 6.26%, 3/3/95.............. 21,865,580
42,000 6.27%, 3/7/95.............. 41,524,525
66,000 6.27%, 3/9/95.............. 65,229,835
Heller Financial Services,
Inc.
35,000 6.05%, 1/18/95............. 34,900,007
26,000 6.30%, 3/13/95............. 25,676,950
26,000 6.30%, 3/14/95............. 25,672,400
Household Finance Corp.
37,000 5.50%, 1/11/95............. 36,943,472
27,000 5.50%, 1/12/95............. 26,954,625
37,000 5.79%, 1/30/95............. 36,827,426
IBM Credit Corp.
115,000 5.76%, 1/23/95............. 114,595,200
International Lease Finance
Corp.
13,000 5.75%, 1/18/95............. 12,964,701
ITT Financial Corp.
41,000 5.82%, 1/17/95............. 40,893,947
Maguire/Thomas Partners
10,000 6.125%, 1/13/95............ 9,979,583
6,000 6.22%, 2/9/95.............. 5,959,570
Merrill Lynch & Co., Inc.
41,000 5.75%, 1/17/95............. 40,895,222
23,000 5.77%, 1/19/95............. 22,933,645
Morgan Stanley Group, Inc.
100,000 6.27%, 3/1/95.............. 98,972,415
NationsBank Corp.
25,000 5.40%, 1/23/95............. 24,917,500
Preferred Receivables
Funding Corp.
13,000 5.65%, 1/11/95............. 12,979,597
10,050 5.47%, 1/17/95............. 10,025,567
</TABLE>
See Notes to Financial Statements.
B-18
<PAGE>
PRUDENTIAL MONEYMART ASSETS
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--(cont'd.)
Sears Roebuck Acceptance
Corp.
$ 56,000 5.87%, 1/27/95............. $ 55,762,591
45,000 5.83%, 2/3/95.............. 44,759,513
17,000 6.05%, 2/6/95.............. 16,897,150
62,500 5.88%, 2/21/95............. 61,979,375
Smith Barney Shearson, Inc.
30,000 5.76%, 1/18/95............. 29,918,400
17,000 5.80%, 1/25/95............. 16,934,267
71,000 5.78%, 1/26/95............. 70,715,014
WCP Funding Inc.
5,000 6.125%, 2/6/95............. 4,969,375
Westpac Capital Corp.,
Delaware
26,000 5.50%, 1/17/95............. 25,936,444
36,000 6.28%, 3/14/95............. 35,547,840
Whirlpool Corp.
13,000 5.66%, 2/2/95.............. 12,934,596
Whirlpool Financial Corp.
6,000 5.60%, 2/6/95.............. 5,966,400
11,000 5.60%, 2/9/95.............. 10,933,267
30,000 5.61%, 2/10/95............. 29,813,000
WMX Technologies Inc.
13,000 5.20%, 5/12/95............. 12,754,011
--------------
Total Commercial Paper
(amortized cost
$3,395,524,459).......... 3,395,524,459
--------------
MEDIUM--TERM OBLIGATIONS--0.8%
Beneficial Corp.
9,500 9.50%, 5/25/95............. 9,641,889
Society National Bank of
Cleveland
40,000 3.55%, 1/20/95............. 39,996,648
--------------
Total Medium--Term
Obligations
(amortized cost
$49,638,537)............. 49,638,537
--------------
TIME DEPOSITS--EURODOLLAR--0.9%
Chemical Bank of New York
2,875 4.50%, 1/3/95.............. 2,875,000
Mitsubishi Bank, Ltd.
53,562 7.00%, 1/3/95.............. 53,562,000
--------------
Total Time
Deposits--Eurodollar
(amortized cost
$56,437,000)............. 56,437,000
--------------
VARIABLE RATE INSTRUMENTS+--17.6%
American Express Centurion
Bank
29,000 6.06%, 1/5/95.............. 28,998,287
51,000 6.125%, 1/19/95............ 50,996,655
13,000 5.94%, 1/30/95............. 12,999,038
Beneficial Corp.
73,000 6.14%, 1/19/95............. 72,972,737
Goldman, Sachs & Co.
345,000 5.375%, 1/27/95............ 345,000,000
Lehman Brothers Hldgs.,
Inc.
185,000 6.36%, 1/26/95............. 185,000,000
Merrill Lynch & Co., Inc.
83,000 6.07%, 1/3/95.............. 82,987,844
65,000 6.07%, 1/23/95............. 64,990,831
Money Market Auto Loan
Trust
91,450 6.34%, 1/17/95............. 91,450,000
Money Market Credit Card
Trust
55,362 6.22%, 1/10/95............. 55,360,568
</TABLE>
See Notes to Financial Statements.
B-19
<PAGE>
PRUDENTIAL MONEYMART ASSETS
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
VARIABLE RATE INSTRUMENTS(D)--(cont'd.)
Morgan Stanley Group, Inc.
$ 50,000 5.75%, 1/17/95............. $ 50,000,000
10,000 6.41%, 1/18/95............. 10,000,000
95,000 5.94%, 2/15/95............. 95,000,000
5,000 5.75%, 1/11/95............. 5,000,000
--------------
Total Variable Rate
Instruments
(amortized cost
$1,150,755,960).......... 1,150,755,960
--------------
Total Investments--100.3%
(amortized cost
$6,567,732,992*)......... 6,567,732,992
Liabilities in excess of
other
assets--(0.3%)........... (22,852,949)
--------------
Net Assets--100%........... $6,544,880,043
==============
</TABLE>
- ---------------
* The cost of securities for federal income tax
purposes is the same as for financial reporting
purposes.
(D) For purposes of amortized cost valuation, the
maturity date of these instruments is considered
to be 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 shown as a
percentage of net assets as of December 31, 1994 was as follows:
<TABLE>
<S> <C>
Commercial Banks.......................... 33.3%
Personal Credit Institutions.............. 21.1
Security Brokers & Dealers................ 17.6
Short-Term Business Credit................ 12.8
Bank Holding Companies--Domestic.......... 3.4
Asset Backed Securities................... 2.9
Tobacco................................... 2.4
Pharmaceutical............................ 2.2
Finance Lessors........................... 1.8
Household Appliance....................... 0.9
Farm Machinery............................ 0.7
Financial Services........................ 0.6
Equipment Rental & Leasing................ 0.2
Refuse Systems/Sanitary................... 0.2
Miscellaneous Electrical Equipment........ 0.2
------
100.3
Liabilities in excess of other assets..... (0.3)
------
100.0%
======
</TABLE>
See Notes to Financial Statements.
B-20
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
December 31,
Assets 1994
--------------
<S> <C>
Investments, at amortized cost which approximates value................................. $6,567,732,992
Receivable for Fund shares sold......................................................... 102,081,759
Interest receivable..................................................................... 35,815,018
Other assets............................................................................ 159,811
--------------
6,705,789,580
--------------
Liabilities
Bank overdraft.......................................................................... 62,702
Payable for Fund shares reacquired...................................................... 151,790,175
Accrued expenses........................................................................ 4,321,839
Dividends payable....................................................................... 2,451,391
Due to Manager.......................................................................... 1,698,429
Due to Distributor...................................................................... 389,293
Deferred director's fees................................................................ 195,708
--------------
160,909,537
--------------
Net Assets.............................................................................. $6,544,880,043
==============
Net assets were comprised of:
Common stock, at par ($.10 par value;
15,000,000,000 shares authorized for issuance)...................................... $ 654,488,004
Paid-in capital in excess of par...................................................... 5,890,392,039
--------------
Net assets at December 31, 1994......................................................... $6,544,880,043
==============
Net asset value, offering price and redemption price per share
($6,544,880,043 / 6,544,880,043 shares of common stock issued and outstanding)........ $1.00
==============
</TABLE>
See Notes to Financial Statements.
B-21
<PAGE>
PRUDENTIAL MONEYMART ASSETS
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
December 31,
Net Investment Income 1994
------------
<S> <C>
Income
Interest............................ $308,274,967
------------
Expenses
Management fee...................... 21,320,747
Distribution fee.................... 8,839,226
Transfer agent's fees and
expenses............................ 16,946,000
Shareholder reports................. 1,300,000
Registration fees................... 695,000
Custodian's fees and expenses....... 510,000
Insurance expense................... 175,600
Directors' fees..................... 88,000
Audit fee........................... 36,000
Legal fees.......................... 23,000
Miscellaneous....................... 64,271
------------
Total expenses.................... 49,997,844
------------
Net investment income................. 258,277,123
Realized Gain on Investments
Net realized gain on investment
transactions........................ 147,440
------------
Net Increase in Net Assets
Resulting from Operations............. $258,424,563
============
</TABLE>
PRUDENTIAL MONEYMART ASSETS
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
Increase (Decrease) ----------------------------------
in Net Assets 1994 1993
---------------- ---------------
<S> <C> <C>
Operations
Net investment
income.......... $ 258,277,123 $ 203,524,243
Net realized gain
on investment
transactions.... 147,440 2,572,145
---------------- ---------------
Net increase in
net assets
resulting from
operations...... 258,424,563 206,096,388
---------------- ---------------
Dividends and
distributions to
shareholders...... (258,424,563) (206,096,388)
---------------- ---------------
Fund share
transactions
(at $1 per share)
Proceeds from
shares
subscribed...... 26,869,523,481 33,414,007,948
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions... 245,955,917 196,483,621
Cost of shares
reacquired...... (27,889,232,548) (32,995,139,159)
---------------- ---------------
Net increase
(decrease) in
net assets from
Fund share
transactions.... (773,753,150) 615,352,410
---------------- ---------------
Total increase
(decrease)...... (773,753,150) 615,352,410
Net Assets
Beginning of year... 7,318,633,193 6,703,280,783
---------------- ---------------
End of year......... $ 6,544,880,043 $ 7,318,633,193
================ ===============
</TABLE>
See Notes to Financial Statements.
B-22
<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 of significant
Policies 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.
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 agreement with
and Distribution Prudential Mutual Fund Management, Inc.
Agreements ("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 Services, Inc. ("PMFS"), a
Transactions wholly-owned subsidiary of PMF, serves as the
with Affiliates Fund's transfer agent. During the year ended
December 31, 1994, the Fund incurred fees of
approximately $15,538,800 for the services of PMFS. As of December 31, 1994,
approximately $2,661,400 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>
PRUDENTIAL MONEYMART ASSETS
Financial Highlights
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1994 1993 1992 1991 1990
----------- ---------- ---------- ---------- ----------
<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........ .037 .027 .035 .058 .077
Dividends and distributions to shareholders......... (.037) (.027) (.035) (.058) (.077)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ==========
TOTAL RETURN #:...................................... 3.72% 2.70% 3.59% 5.95% 8.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)....................... $6,544,880 $7,318,633 $6,703,281 $7,138,159 $7,411,932
Average net assets (000)............................ $7,071,381 $7,742,989 $7,116,739 $7,763,251 $8,262,329
Ratios to average net assets:
Expenses, including distribution fee.............. .71% .71% .66% .68% .73%
Expenses, excluding distribution fee.............. .58% .58% .54% .56% .60%
Net investment income............................. 3.65% 2.63% 3.43% 5.72% 7.62%
<FN>
- ---------------
# 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.
</FN>
</TABLE>
See Notes to Financial Statements.
B-24
<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,
1994, 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, 1994 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 our 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, 1994, the results of its operations, the changes in
its net assets and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
February 1, 1995
B-25
<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 company 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 company ranks in the lower end of its generic
rating category.
Standard & Poor's Ratings Group--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 Credit Rating Co.--The following summarizes the ratings
used by Duff & Phelps for long-term debt:
"AAA": Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
"AA+", "AA" or "AA-": High credit quality. Protection factors are
strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
"A+", "A" or "A-": Protection factors 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. Issuers rated "Prime-1" or "P-1"(or supporting
institutions) have a superior ability for repayment of senior short-term debt
obligations. Issuers rated "Prime-2" or "P-2" (or supporting institutions)
have a strong ability for repayment of senior short-term debt obligations.
Issuers rated "Prime-3" or "P-3" (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations.
An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market. The
designation A-1 indicates that the degree of safety regarding timely payment is
strong. A "+" designation is applied to those issues rated A-1 which possess
extremely strong safety characteristics. Capacity for timely payment on issues
with the designation A-2 is satisfactory. However, the relative degree of safety
is not as high as for issues designated A-1. Issues carrying the designation A-3
have adequate capacity for timely payment. They are however, somewhat more
vulnerable to the adverse effects of changes in circumstances than obligations
carrying the higher designations.
The following summarizes the ratings used by Duff & Phelps for short-term
debt, which apply to all obligations with maturities of under one year,
including commercial paper.
Duff 1+: Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources of
funds, is 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 good fundamental protection factors. Risk factors are
minor.
Duff 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
A-1
<PAGE>
Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
Duff 3: Satisfactory liquidity and other protection factors qualify issue
as to investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payments is expected.
A-2
<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, 1994
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the Year Ended December 31, 1994
Statement of Changes in Net Assets for the Years Ended December 31,
1994 and 1993
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.By-Laws.*
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 Post-Effective Amendment No.
28 to this Registration Statement on Form N-1A filed on February 17,
1993 (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., incorporated by
reference to Exhibit 6(b) to Post-Effective Amendment No. 28 to the
Registration Statement on Form N-1A filed on February 17, 1994 (File
No. 2-55301).
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).
C-1
<PAGE>
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).
(c) Opinion of Gardner, Carton & Douglas.*
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., incorporated by reference
to Exhibit 15(b) to Post-Effective Amendment No. 28 on Form N-1A filed
on February 17, 1994 (File No. 2-55301).
27.Financial Data Schedule.*
- ------------------
*Filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
As of January 27, 1995, there were 1,108,181 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>
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 March 30, 1994).
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>
Brendan D. Boyle Executive Vice Executive Vice President, Director of Marketing and
President, Director of Director, PMF; Senior Vice President, Prudential
Marketing and Director Securities Incorporated (Prudential Securities);
Chairman and Director of Prudential Mutual Fund
Distributors (PMFD)
Stephen P. Fisher Senior Vice President Senior Vice President, PMF; Senior Vice President,
Prudential Securities; Vice President, PMFD
Frank W. Giordano Executive Vice Executive Vice President, General Counsel, Secretary and
President, General Director, PMF and PMFD; Senior Vice President, Prudential
Counsel, Secretary and Securities; Director, Prudential Mutual Fund
Director Services, Inc. (PMFS)
Robert F. Gunia Executive Vice Executive Vice President, Chief Financial and
President, Chief Administrative Officer, Treasurer and Director, PMF;
Financial and Senior Vice President, Prudential Securities;
Administrative Executive Vice President, Treasurer, Comptroller and
Officer, Treasurer and Director, PMFD; Director, PMFS
Director
Lawrence C. McQuade Vice Chairman Vice Chairman, PMF
Timothy J. O'Brien Director President, Chief Executive Officer, Chief Operating
Officer and Director, PMFD; Chief Executive Officer
and Director, PMFS; Director, PMF
Richard A. Redeker President, Chief President, Chief Executive Officer and Director, PMF;
Executive Officer and Executive Vice President, Director and Member of
Director Operating Committee, Prudential Securities; Director,
PSG; Executive Vice President, PIC; Director, PMFD;
Director, PMFS
S. Jane Rose Senior Vice President, Senior Vice President, Senior Counsel and Assistant
Senior Counsel and Secretary, PMF; Senior Vice President and Senior
Assistant Secretary Counsel, Prudential Securities
</TABLE>
(b) The Prudential Investment Corporation (PIC).
See "How the Fund is Managed--Manager" in the Prospectus constituting
Part A of this Registration Statement and "Manager" in the Statement of
Additional Information constituting Part B of this Registration Statement.
C-3
<PAGE>
The business and other connections of PIC's directors and executive
officers are as set forth below. Except as otherwise indicated, the address of
each person is Prudential Plaza, Newark, NJ 07102.
<TABLE>
<CAPTION>
Name and Address Position with PIC Principal Occupations
- -------------------------- ---------------------- --------------------------------------------------------
<S> <C> <C>
Martin A. Berkowitz Senior Vice President Senior Vice President and Chief Financial and Compliance
and Chief Financial Officer, PIC; Vice President, Prudential
and Compliance Officer
William M. Bethke Senior Vice President Senior Vice President, Prudential; Senior Vice
Two Gateway Center President, PIC
Newark, NJ 07102
John D. Brookmeyer, Jr. Senior Vice President Senior Vice President, Prudential; Senior Vice President
51 JFK PKWY and Director and Director, PIC
Short Hills, NJ 07078
Theresa A. Hamacher Vice President Vice President, Prudential; Vice President, PIC
Harry E. Knapp President, Director President, Director and Chief Executive Officer, PIC;
and Chief Executive Vice President, Prudential
Officer
William P. Link Senior Vice President Executive Vice President, Prudential; Senior Vice
Four Gateway Center President, PIC
Newark, NJ 07102
Richard A. Redeker Executive Vice President, Chief Executive Officer and Director, PMF;
President Executive Vice President, Director and Member of
Operating Committee, Prudential Securities; Director,
PSG; Executive Vice President, PIC; Director, PMFD;
Director, PMFS
Arthur F. Ryan Director Chairman of the Board, President and Chief Executive Officer,
Prudential; Director, PIC; Chairman of the Board and
Director, PSG
Eric A. Simonsen Vice President and Vice President and Director, PIC; Executive Vice
Director President, Prudential
Claude J. Zinngrabe, Jr. Executive Vice Vice President, Prudential; Executive Vice President,
President PIC
</TABLE>
Item 29. Principal Underwriters
(i) Prudential Mutual Fund Distributors, Inc.
Prudential Mutual Fund Distributors, Inc. is distributor for Command
Government Fund, Command Money Fund, Command Tax-Free Fund, Prudential
California Municipal Fund (California Money Market Series), Prudential
Government Securities Trust (Money Market Series and U.S. Treasury Money Market
Series), Prudential Institutional Liquidity Portfolio, Inc., Prudential-Bache
MoneyMart Assets Inc. (d/b/a Prudential MoneyMart Assets), Prudential Municipal
Series Fund (Connecticut Money Market Series, Massachusetts Money Market Series,
New York Money Market Series and New Jersey Money Market 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 Prudential Adjustable Rate
Securities Fund, Inc., Prudential Allocation Fund, Prudential California
Municipal Fund (California Income Series and California Series), Prudential
Diversified Bond Fund, Inc., Prudential Equity Fund, Inc., Prudential Equity
Income Fund, Prudential Europe Growth Fund, Inc., Prudential Global Fund, Inc.,
Prudential Global Genesis Fund, Inc., Prudential Global Natural Resources Fund,
Inc., Prudential GNMA Fund, Inc., Prudential Government Income Fund, Inc.,
Prudential Growth Opportunity Fund, Inc., Prudential High Yield Fund, Inc.,
Prudential IncomeVertible(R) Fund, Inc., Prudential Intermediate Global Income
Fund, Inc., Prudential Multi-Sector Fund, Inc., Prudential Municipal Bond Fund,
Prudential Municipal Series Fund (Arizona Series, Georgia Series, Hawaii Income
Series, Maryland Series, Massachusetts Series, Michigan Series, Minnesota
Series, New Jersey Series, North Carolina Series, Ohio Series and Pennsylvania
Series), Prudential National Municipals Fund, Inc., Prudential Pacific Growth
Fund, Inc., Prudential Short-Term Global Income Fund, Inc., Prudential
Strategist Fund, Inc., Prudential Structured Maturity Fund, Inc., Prudential
U.S. Government Fund and Prudential Utility Fund, Inc., Global Utility Fund,
Inc., Nicholas-Applegate Fund, Inc. (Nicholas-Applegate Growth Equity Fund) and
The BlackRock Government Income Trust.
C-4
<PAGE>
(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
Brendan D. Boyle................. Chairman and Director None
Stephen P. Fisher................ Vice President None
Frank W. Giordano................ Executive Vice President, General None
Counsel, Secretary and Director
Robert F. Gunia.................. Executive Vice President, Treasurer, Vice President
Comptroller and Director
Timothy J. O'Brien............... President, Chief Executive Officer, None
Chief Operating Officer and Director
Richard A. Redeker............... Director Director
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 Prudential Investment Corporation, Prudential
Plaza, 745 Broad Street, Newark, New Jersey 07102, the Registrant, One Seaport
Plaza, New York, New York 10292, and Prudential Mutual Fund Services, Inc.,
Raritan Plaza One, Edison, New Jersey 08837. Documents required by Rules
31a-1(b)(5), (6), (7), (9), (10) and (11) and 31a-1(f) 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.
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-5
<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 24th day of February, 1995.
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 24, 1995
- --------------------------------------
Lawrence C. McQuade
/s/ WILLIAM S. FIELD Director February 24, 1995
- --------------------------------------
William S. Field
/s/ DELAYNE D. GOLD Director February 24, 1995
- --------------------------------------
Delayne D. Gold
Director
- --------------------------------------
Harry A. Jacobs, Jr.
/s/ THOMAS A. OWENS, JR. Director February 24, 1995
- --------------------------------------
Thomas A. Owens, Jr.
/s/ RICHARD A. REDEKER Director February 24, 1995
- --------------------------------------
Richard A. Redeker
/s/ SIDNEY M. SPIELVOGEL Director February 24, 1995
- --------------------------------------
Sidney M. Spielvogel
/s/ NANCY HAYS TEETERS Director February 24, 1995
- --------------------------------------
Nancy Hays Teeters
/s/ ROBERT H. WELLINGTON Director February 24, 1995
- --------------------------------------
Robert H. Wellington
/s/ GRACE TORRES Principal Financial and Accounting February 24, 1995
- -------------------------------------- Officer
Grace Torres
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 29 to the Registration
Statement on Form N-1A of our report dated February 1, 1995 relating to the
financial statements and financial highlights of Prudential-Bache MoneyMart
Assets, Inc., which appear in such Statement of Additional Information. We also
consent to the incorporation by reference of our report in the Prospectus
constituting part of such Registration Statement, the reference to us under the
heading "Custodian and Transfer and Dividend Disbursing Agent and Independent
Accountants" in such Statement of Additional Information and the reference to
us under the heading "Financial Highlights" in the Prospectus.
Deloitte & Touche LLP
New York, New York
February 1, 1995
<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.By-Laws.*
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 to Post-Effective Amendment No.
28 to this Registration Statement on Form N-1A filed on February 17,
1993 (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., incorporated by
reference to Exhibit 6(b) to Post-Effective Amendment No. 28 to the
Registration Statement on Form N-1A filed on February 17, 1994 (File
No. 2-55301).
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).
(c) Opinion of Gardner, Carton & Douglas.*
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., incorporated by reference to
Exhibit 15(b) to Post-Effective Amendment No. 28 on Form N-1A filed on
February 17, 1994 (File No. 2-55301).
27.Financial Data Schedule.*
- ------------------
*Filed herewith.
EXH (2)
BY-LAWS
OF
PRUDENTIAL-BACHE MONEYMART ASSETS INC.
(doing business as Prudential MoneyMart Assets)
ARTICLE I
Shareholders
Section 1. The annual meeting of the shareholders of the Corporation shall
be held on the third Wednesday in April in each year (or if said day be a legal
holiday then on the next succeeding day not a legal holiday), at one o'clock in
the afternoon, at the office of the Corporation in the City of Baltimore,
Maryland, or at such other time and place within the United States as may be
fixed by the Chairman of the Board of Directors or the President, for the
purpose of electing directors and for transacting such other business as may
properly be brought before the meeting. Only such business, in addition to that
prescribed by law, by the Articles of Incorporation and by these By-Laws, may be
brought before such meeting as may be specified by resolution of the Board of
Directors, or by writing filed with the Secretary or the President or by a
majority of the directors or by shareholders holding at least one-half of the
stock of the Corporation outstanding and entitled to vote at the meeting.
Section 2. Special meetings of the shareholders for any purpose or purposes
may be held upon call by the Chairman of the Board or the President or by a
majority of the Board of Directors, and shall be called by the Chairman of the
Board, the President, a Vice President, the Secretary or any director at the
request in writing of a majority of the Board of Directors or of shareholders
holding at least one-quarter of the stock of the Corporation outstanding and
entitled to vote at the meeting, at such time and date and at such place where
an annual meeting of shareholders could be held, each as may be fixed by the
Chairman of the Board, the President or the Board of Directors, as the case may
be, and as may be stated in the notice setting forth such call. Such request
shall state the purpose or purposes of the proposed meeting and the matters
proposed to be acted upon and only such purpose or purposes and matters so
specified may properly be brought before such meeting.
Section 3. Written or printed notice of every annual or special meeting of
shareholders, stating the time and place thereof and, in the case of every
special meeting, the purpose of such meeting, shall be delivered personally or
mailed to each shareholder of record entitled to vote at the meeting at his
address as the same appears on the books of the Corporation or left at his
residence or usual place of business, in each case at least ten days but not
more than ninety days prior to such meeting. Such further notice shall be given
as may be required by law. Meetings may be held without notice if all of the
shareholders entitled to vote are present or represented at the meeting, or if
notice is waived in writing, either before or after the meeting, by those not
present or represented at the meeting. No notice of an adjourned meeting of the
shareholders other than an announcement of the time and place thereof at the
preceding meeting shall be required.
Section 4. At every meeting of the shareholders the holders of record of
one-half of the outstanding shares of the stock of the Corporation entitled to
vote at the meeting, whether present in person or represented by proxy, shall,
except as otherwise provided by law, constitute a quorum. If at any meeting
there shall be no quorum, the holders of record of a majority of such shares
entitled to vote at the meeting so present or represented may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall have been obtained when any business may be
transacted which might have been transacted at the meeting as first convened had
there been a quorum.
<PAGE>
Section 5. Meetings of the shareholders shall be presided over by the
Chairman of the Board or, if he is not present, the President or, if neither is
present by a Vice President or, in their absence, by a Chairman to be chosen at
the meeting. The Secretary of the Corporation, or, if he is not present, an
Assistant Secretary of the Corporation or, if neither is present, a secretary to
be chosen at the meeting shall act as secretary of the meeting.
Section 6. Each shareholder entitled to vote at any meeting shall have one
vote in person or by proxy for each share of stock held by him, but no proxy
shall be voted on after eleven months from its date, unless such proxy provides
for a longer period. All elections of directors shall be had and all questions,
except as otherwise provided by law or by the Articles of Incorporation or by
these By-Laws, shall be decided by a majority of the votes cast by shareholders
present or represented and entitled to vote thereat in person or by proxy.
Section 7. The vote on the election of directors, and other questions
properly brought before any meeting, need not be by ballot except when so
demanded by a majority vote of the shares present in person or by proxy and
entitled to vote thereon, or when so ordered by the chairman of such meeting.
The chairman of each meeting at which directors are to be elected by ballot or
at which any question is to be so voted on shall, at the request of any
shareholder present or represented by proxy at the meeting and entitled to vote
at such election or on such question, appoint two inspectors of election. No
director or candidate for the office of director shall be appointed as such
inspector. Inspectors shall first take and subscribe an oath or affirmation,
faithfully execute the duties of inspectors at such meeting with strict
impartiality and according to the best of their ability, and shall take charge
of the polls and after the balloting shall make a certificate of the result of
the vote taken.
Section 8. The Board of Directors may close the stock transfer books of the
Corporation for a period not exceeding twenty days preceding the date of any
meeting of shareholders, or the date for the payment of any dividend or the date
for the allotment of rights, or the date when any change or conversion or
exchange of stock shall go into effect; or, in lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date, not exceeding
sixty days and not less than ten days preceding the date of any meeting of
shareholders, and not exceeding sixty days preceding the date for the payment of
any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of stock shall go into effect, or a date in
connection with the obtaining of any consent, as a record date for the
determination of the shareholders entitled to notice of, and to vote at any such
meeting and at any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of stock, or to give such
consent, and in such case such shareholders, and only such shareholders, as
shall be shareholders of record on the date so fixed, shall be entitled to such
notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
ARTICLE II
Board of Directors
Section 1. The Board of Directors of the Corporation shall consist of not
less than three nor more than fifteen persons, none of whom need be shareholders
of the Corporation. The number of directors shall be fifteen unless increased or
decreased by the Board of Directors from time to time, as it sees fit, by vote
of a majority of the whole Board subject to the Articles of Incorporation. The
directors shall be elected annually and shall hold office, unless sooner
removed, until their respective successors are elected and qualify. A majority
of the whole Board, but in no event less than three, shall constitute a quorum
for the transaction of business, but if at any meeting of the Board there shall
be less than a quorum present, a majority of the directors present may adjourn
the meeting from time to time, until a quorum
<PAGE>
shall have been obtained when any business may be transacted which might
have been transacted at the meeting as first convened had there been a quorum.
No notice of an adjourned meeting of the directors other than an announcement of
the time and place thereof at the preceding meeting shall be required. The acts
of the majority of the directors present at any meeting at which there is a
quorum shall, except as otherwise provided by law, by the Articles of
Incorporation or by these By-Laws, be the acts of the Board.
Section 2. The Board of Directors, by vote of a majority of the whole
Board, may elect directors to fill vacancies in the Board resulting from an
increase in the number of directors or from any other cause. A director so
chosen shall hold office until the expiration of the term of the director whom
he shall have succeeded, and, in case of an increase in the number of directors,
the directors so chosen shall hold office until the next annual meeting of
shareholders and their respective successors are elected and qualify. The
shareholders, at any meeting called for the purpose, may, with or without cause,
remove any director and, at any meeting called for the purpose, fill the vacancy
in the Board thus caused, in each case by the affirmative vote of the holders of
a majority of the votes entitled to be cast at such meeting.
Section 3. A director who is an "interested person" as defined in the
Investment Company Act of 1940 by virtue of an affiliation with the investment
adviser or administrator of the Corporation shall resign as a director of the
Corporation upon the termination of his employment relationship with the
investment adviser or administrator. The Board of Directors may, at its option,
decline to accept to resignation of a director who tenders his resignation under
these circumstances.
Section 4. Meetings of the Board of Directors shall be held at such place,
within or without the State of Maryland, as may from time to time be fixed by
resolution of the Board or as may be specified in the call of any meeting.
Regular meetings of the Board of Directors shall be held at such times as may
from time to time be fixed by resolution of the Board, and special meetings may
be held at any time upon the call of a majority of the persons constituting the
Board of Directors, the Chairman of the Board, the President or the Secretary,
by oral, telephonic, telegraphic or written notice, duly served on, sent, mailed
or given to each director at least twenty-four hours before the meeting. The
notice of any special meeting shall specify the purposes thereof. Notice need
not be given of regular meetings of the Board held at any time without notice if
all of the directors are present or if notice is waived in writing, either
before or after the meeting, by those not present.
Section 5. Members of the Board of Directors or a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.
Section 6. Meetings of the Board of Directors shall be presided over by the
Chairman of the Board, or, if he is not present, by the President or, if neither
of the above is present, by a Vice President or, if none of the above is
present, by a Chairman to be chosen at the meeting; and the Secretary or, if he
is not present, an Assistant Secretary or, if neither is present, a secretary to
be chosen at the meeting shall act as secretary of the meeting.
Section 7. The directors other than directors who are officers, directors,
or employees of the investment adviser or administrator of the Corporation shall
receive such fees or compensation for services to the Corporation (including
attendance at meetings of the Board or of committees designated by the Board
pursuant to Section 8 of this Article II) as may be fixed by the Board of
Directors.
Section 8. Except as otherwise provided by law or in the Articles of
Incorporation, a director of the Corporation shall not in the absence of fraud
be disqualified by his office from dealing or contracting with the Corporation
either as a vendor, purchaser or otherwise, nor in the absence of fraud shall
any transaction or
<PAGE>
contract of the Corporation be void or voidable or affected by reason of the
fact that any directors, or any firm of which any director is a member, or any
corporation of which any director is an officer, director or shareholder, is in
any way interested in such transaction or contract; provided that at the meeting
of the Board of Directors, authorizing or confirming said contract or
transaction, the existence of an interest of such director, firm or corporation
is disclosed or made known and there shall be present a quorum of the Board of
Directors, and such contract or transaction shall be approved by a majority of
such quorum, which majority shall consist of directors not so interested or
connected. Nor shall any director be liable to account to the Corporation for
any profit realized by him from or through any such transaction or contract of
the Corporation ratified or approved as aforesaid, by reason of the fact that he
or any firm of which he is a member, or any corporation of which he is an
officer, director or shareholder, was interested in such transaction or
contract. Directors so interested may be counted when present at meetings of the
Board of Directors for the purpose of determining the existence of a quorum. Any
contract, transaction or act of the Corporation or of the Board of Directors
(whether or not approved or ratified as hereinabove provided) which shall be
ratified by a majority in interest of a quorum of the shareholders having voting
power at any annual meeting or any special meeting called for such purpose or
approved in writing by a majority in interest of the shareholders having voting
power without a meeting shall, except as otherwise provided by law, be as valid
and as binding as though ratified by every shareholder of the Corporation. No
person who is a director, officer or employee of the Continental Illinois
National Bank and Trust Company of Chicago may serve as a director of the
Corporation.
Section 9. The Board of Directors may, by resolution or resolutions, passed
by a majority of the whole Board, designate one or more committees, each such
committee to consist of two or more of the directors of the Corporation, which,
to the extent permitted by law and provided in said resolution or resolutions,
shall have and may exercise the powers of the Board over the business and
affairs of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. A majority of the members of
any such committee may determine its action and fix the time and place of its
meetings unless the Board of Directors shall otherwise to change the membership
of, to fill vacancies in, or to dissolve any such committee.
Section 10. The Board of Directors, by resolution adopted by a majority of
the whole Board, may designate three or more directors, none of whom is an
"interested person" of the Corporation as defined in the Investment Company Act
of 1940, to constitute an Audit Committee. The Audit Committee shall review the
selection and qualifications of the independent public accountants employed from
time to time to audit the financial statements of the Corporation and the scope
and adequacy of their audits. The Committee shall also consider recommendations
made by such independent public accountants. The Committee may also make such
review of the internal financial audits of the Corporation as it considers
desirable and deems advisable. The Audit Committee shall meet at least once a
year, at such times and places as the Audit Committee may determine. The Audit
Committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.
Section 11. The Board of Directors, by resolution adopted by a majority of
the whole Board, may designate three or more directors, the majority of whom are
not "interested persons" of the Corporation as defined in the Investment Company
Act of 1940, to constitute a Nominating Committee. The Nominating Committee
shall review and make recommendations to the full Board of Directors with
respect to nominees for election of directors. The Nominating Committee shall
meet at least once a year, at such times and places as the Nominating Committee
may determine. The Nominating Committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.
<PAGE>
ARTICLE III
Officers
Section 1. The Board of Directors, as soon as practicable after the
election of directors at the annual meeting of the shareholders held in each
year, shall appoint from among their members a President of the Corporation, and
shall appoint one or more Vice Presidents, a Secretary and a Treasurer and, from
time to time, any other officers and agents as it may deem proper. The President
shall be a director of the Corporation. Any two of the above-mentioned officers,
except those of the President and a Vice President, may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument in
more than one capacity if such instrument be required by law or by these By-Laws
to be executed, acknowledged or verified by any two or more officers. The Board
of Directors may fill any vacancy which occurs in any office.
Section 2. The term of office of all officers shall be one year or until
their respective successors are chosen; but any officer or agent chosen or
appointed by the Board of Directors may be removed, if the Board of Directors in
its judgment finds that the best interests of the Corporation will be thus
served, at any time, by the affirmative vote of a majority of the members of the
Board then in office.
Section 3. Subject to such limitations as the Board of Directors may from
time to time prescribe, the officers of the Corporation shall each have such
powers and duties as generally appertain to their respective offices, as well as
such powers and duties as from time to time may be conferred by the Board of
Directors. Any officer, agent or employee of the Corporation may be required by
the Board of Directors to give bond for the faithful discharge of his duties, in
such sum and of such character as the Board may from time to time prescribe.
ARTICLE IV
Certificate of Stock
Section 1. Each shareholder of the Corporation shall be entitled, upon
written request by such shareholder to the Corporation, to a certificate or
certificates, in such form as the Board of Directors may from time to time
prescribe, which shall represent and certify the number of whole shares of stock
of the Corporation owned by such shareholder. The certificates for shares of
stock of the Corporation shall bear the signature, either manual or facsimile,
of the President or a Vice President and the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary, and shall be sealed with the seal of
the Corporation or bear a facsimile of such seal. The validity of any stock
certificate shall not be affected if any officer whose signature appears thereon
ceases to be an officer of the Corporation before such certificate is issued.
Section 2. The shares of stock of the Corporation shall be transferable on
the books of the Corporation by the holder thereof in person or by a duly
authorized attorney, upon surrender for cancellation of a certificate or
certificates for a like number of shares, with a duly executed assignment and
power of transfer endorsed thereon or attached thereto, or, if no certificate
has been issued to the holder in respect of shares of stock of the Corporation,
upon receipt of written instructions, signed by such holder, to transfer such
shares from the account maintained in the name of such holder by the Corporation
or its agent. Such proof of the authenticity of the signatures as the
Corporation or its agent may reasonably require shall be provided.
Section 3. No certificate for shares of stock of the Corporation shall be
issued in place of any certificate alleged to have been lost, stolen, mutilated
or destroyed except upon production of such evidence of the loss, theft,
mutilation or destruction, and upon indemnification of the Corporation and its
agents to such extent and in such manner as the Board of Directors may from time
to time prescribe.
ARTICLE V
Corporate Books
Section 1. Except as otherwise provided in these By-Laws or as the Board of
Directors may generally or in particular cases authorize the execution thereof
in some other manner, all deeds,
<PAGE>
leases, transfers, contracts, bonds, notes, checks, drafts and other
obligations made, accepted or endorsed by the Corporation and all endorsements,
assignments, transfers, stock powers or other instruments of transfer of
securities owned by or standing in the name of the Corporation shall be signed
or executed by two officers of the Corporation, who shall be the Chairman of the
Board, the President or a Vice President and a Vice President, the Secretary or
the Treasurer.
Section 2. The Chairman of the Board or the President of the Corporation
or, in their absence or disability or at their request, a Vice President of the
Corporation may authorize from time to time the signature and issuance of
proxies to vote upon shares of stock of other corporations owned by the
Corporation unless otherwise provided by the Board of Directors. All proxies for
shares held in the name of the Corporation shall be signed in the name of the
Corporation by the President or a Vice President.
ARTICLE VII
Fiscal Year
The first fiscal year of the Corporation shall end December 31, 1975;
thereafter each successive end of the calendar year shall be the end of the
fiscal year of the Corporation.
ARTICLE VIII
Corporate Seal
The corporate seal of the Corporation shall consist of a flat faced
circular die with the word "Maryland" together with the name of the Corporation,
the year of its organization, and such other appropriate legend as the Board of
Directors may from time to time determine, cut or engrave thereon. In lieu of
the corporate seal, when so authorized by the Board of Directors or a duly
empowered committee thereof, a facsimile thereof may be impressed or affixed or
reproduced.
ARTICLE IX
Offices
The Corporation and the shareholders and the directors may have offices
outside the State of Maryland at such places as shall be determined from time to
time by the Board of Directors.
ARTICLE X
Indemnification of Directors and Officers
The Corporation shall indemnify directors, officers, employees and agents
of the Corporation against judgments, fines, settlements and expenses to the
fullest extent authorized and in the manner permitted by applicable federal and
state law.
ARTICLE XI
Additional Provisions
Section 1. The books of account of the Corporation shall be examined by an
independent firm of public accountants, selected as required by law, at the
close of each fiscal year of the Corporation and at such other times, if any, as
may be directed by the Board of Directors of the Corporation. A report to the
shareholders based upon each such examination shall be mailed to each
shareholder of the Corporation, of record on such date with respect to each
report as may be determined by the Board of Directors, at his address as the
same appears on the books of the Corporation each such report shall show the
assets and liabilities of the Corporation as of the close of the year covered by
the report, its income and expenses, the net asset value of its outstanding
shares, the securities in which the funds of the Corporation where then invested
and such other matters as the Board of Directors shall determine.
Section 2. In any case where an officer or director of the Corporation or
of any investment adviser of the Corporation, or a member of any committee of
the Corporation, is also an officer or director of another corporation and the
purchase or sale of the securities issued by such other corporation is under
consideration, the officer, director or committee member concerned will abstain
from participating in any decision made on behalf of the Corporation to purchase
or sell any securities issued by such other corporation.
<PAGE>
ARTICLE XII
Amendments
The By-Laws of the Corporation may be amended, added to, rescinded or
repealed at any meeting of the shareholders, or by vote of a majority of the
directors then in office at any meeting of the Board of Directors, provided
notice of the substance of the proposed change is contained in the notice of the
meeting or any waiver thereof; except that after the initial issue of any shares
of capital stock of the Corporation, the provisions of this Article XII may be
altered, amended or repealed only upon the affirmative vote of the holders of a
majority of all shares of capital stock of the Corporation at the time
outstanding and entitled to vote.
Dated: February 1, 1995
Exhibit 11
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in Post-Effective Amendment No. 29 to Registration
Statement No. 2-55301 of Prudential-Bache MoneyMart Assets Inc. of our report
dated February 1, 1995, 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.
Deloitte & Touche LLP
New York, New York
February 21, 1995
Exhibit 10.C
GARDNER, CARTON & DOUGLAS
Suite 3400--Quaker Tower
321 North Clark Street
Chicago, Illinois 60610-4795
(312) 644-3000
Telecopier: (312) 644-3381
February 23, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Prudential-Bache MoneyMart Assets Inc.
Shares of Common Stock, $0.10 par value per share
-------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Prudential-Bache MoneyMart Assets Inc.,
doing business as Prudential MoneyMart Assets, a Maryland corporation (the
"Fund"), in connection with its filing of Post-Effective Amendment No. 29 to its
Registration Statement on Form N-1A (File No. 2-55301) (the "Amendment"). In
addition to updating the information contained therein, this Amendment registers
999,531,784 shares of Common Stock, $0.10 par value per share, of the Fund.
We have examined all instruments, documents and records which, in our
opinion, were necessary of examination for the purpose of rendering this
opinion. Based upon such examination, we are of the opinion that the
above-described shares of Common Stock will be, if and when issued by the Fund
in the manner and upon the terms set forth in said Amendment, validly
authorized and issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment.
Very truly yours,
/s/ GARDNER, CARTON & DOUGLAS
HJM/KJF/cav
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000067590
<NAME> PRUDENTIAL MONEYMART ASSETS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 6,567,732,992
<INVESTMENTS-AT-VALUE> 6,567,732,992
<RECEIVABLES> 137,896,777
<ASSETS-OTHER> 159,811
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,705,789,580
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 160,909,537
<TOTAL-LIABILITIES> 160,909,537
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,544,880,043
<SHARES-COMMON-STOCK> 6,544,880,043
<SHARES-COMMON-PRIOR> 7,318,633,193
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
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<NET-ASSETS> 6,544,880,043
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 308,274,967
<OTHER-INCOME> 0
<EXPENSES-NET> 49,997,844
<NET-INVESTMENT-INCOME> 258,277,123
<REALIZED-GAINS-CURRENT> 147,440
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 258,424,563
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (258,424,563)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,869,523,481
<NUMBER-OF-SHARES-REDEEMED> (27,889,232,548)
<SHARES-REINVESTED> 245,955,917
<NET-CHANGE-IN-ASSETS> (773,753,150)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21,320,747
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 49,997,844
<AVERAGE-NET-ASSETS> 7,071,381,000
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
