As filed with the Securities and Exchange Commission on February 28, 2000
Securities Act Registration No. 2-55301
Investment Company Act Registration No. 811-2619
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 37
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 28
(Check appropriate box or boxes)
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PRUDENTIAL MONEYMART ASSETS, INC.
(Exact name of registrant as specified in charter)
GATEWAY CENTER THREE,
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
(Address of Principal Executive Offices) (Zip Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (973) 367-3028
ROBERT C. ROSSELOT, ESQ.
GATEWAY CENTER THREE,
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
(Name and Address of Agent for Service)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(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.
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Title of Securities Being Registered............................................
Shares of Common Stock, Par Value $.001 per Share
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[PRUDENTIAL LOGO]
PROSPECTUS: FEBRUARY 28, 2000
Prudential
MoneyMart
Assets, Inc.
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FUND TYPE: Money market
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OBJECTIVE: Maximum current income consistent with stability of capital and the
maintenance of liquidity
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As with all mutual funds,
the Securities and
Exchange Commission has
not approved or
disapproved the Fund's
shares, nor has the SEC
determined that this
prospectus is complete or
accurate. It is a
criminal offense to state
otherwise.
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Table of Contents
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1 Risk/Return Summary
1 Investment Objective and Principal Strategies
1 Principal Risks
2 Evaluating Performance
4 Fees and Expenses
5 How the Fund Invests
5 Investment Objective and Policies
7 Other Investments and Strategies
9 Investment Risks
10 How the Fund is Managed
10 Board of Directors
10 Manager
10 Investment Adviser
11 Distributor
12 Fund Distributions and Tax Issues
12 Distributions
12 Tax Issues
14 How to Buy and Sell Shares of the Fund
14 How to Buy Shares
20 How to Sell Your Shares
22 How to Exchange Your Shares
23 Telephone Redemptions and Exchanges
24 Financial Highlights
24 Class A Shares
25 Class Z Shares
26 The Prudential Mutual Fund Family
For More Information (Back Cover)
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Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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Risk/Return Summary
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MONEY MARKET FUNDS
Money market funds (which hold
high-quality short-term debt
obligations) provide investors
with a lower risk, highly
liquid investment option.
These funds attempt to
maintain a net asset value of
$1 per share, although there
can be no guarantee that they
will always be able to do so.
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This section highlights key information about PRUDENTIAL MONEYMART ASSETS, INC.,
which we refer to as "the Fund." Additional information follows this summary.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Our investment objective is MAXIMUM CURRENT INCOME CONSISTENT WITH STABILITY OF
CAPITAL AND THE MAINTENANCE OF LIQUIDITY. This means we look for investments
that we think will provide a high level of current income. To achieve our
objective, we invest in short-term money market instruments such as obligations
issued by the U.S. Government, commercial paper, asset-backed securities,
funding agreements, variable rate demand notes, bills, notes and other
obligations issued by banks, corporations and other companies, and obligations
issued by foreign banks, companies or foreign governments. The Fund will invest
only in instruments with remaining maturities of thirteen months or less and
which are denominated in U.S. dollars. The Fund may invest in longer-term
securities that are accompanied by demand features which will shorten the
effective maturity of the securities to thirteen months or less. While we make
every effort to achieve our objective and maintain a net asset value of $1 per
share, we can't guarantee success. To date, the Fund's net asset value has never
deviated from $1 per share.
PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. Since the
Fund invests in debt obligations, there is the risk that the value of a
particular obligation could go down. Debt obligations are generally subject to
CREDIT RISK--the risk that the issuer of a particular security may be unable to
make principal and interest payments when they are due, and MARKET RISK--the
risk that the securities could lose value because interest rates change or
investors lose confidence in the ability of issuers in general to pay back their
debt. With respect to the Fund's investments in asset-backed securities, there
is a risk of
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1
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Risk/Return Summary
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prepayment, which means that if the underlying obligations are paid
before they are due, the security may discontinue paying an attractive rate of
income.
The Fund's investment in foreign securities involves additional risks. For
example, foreign banks and companies generally are not subject to regulatory
requirements comparable to those applicable to U.S. banks and companies. In
addition, political developments and changes in currency rates may adversely
affect the value of foreign securities. In all cases, however, we invest only in
U.S. dollar-denominated securities.
There is also a risk that we will sell a security for a price that is
higher or lower than the value attributed to the security through the amortized
cost valuation procedures we follow. Such an event could affect our ability to
maintain a net asset value of $1 per share.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of an investment at $1 per
share, it is possible to lose money by investing in the Fund.
EVALUATING PERFORMANCE
A number of factors--including risk--can affect how the Fund performs. The
following bar chart shows the Fund's performance for each full calendar year of
operation for the last 10 years. The tables below compare the Fund's average
annual returns and yield for the periods indicated with those of a group of
similar funds. The bar chart and tables demonstrate the risk of investing in the
Fund by showing how returns can change. Past performance is not an indication
that the Fund will achieve similar results in the future. For current yield
information, you can call us at (800) 225-1852.
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2 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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Risk/Return Summary
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ANNUAL RETURNS(1) (CLASS A SHARES)
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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
8.00% 5.95% 3.59% 2.70% 3.72% 5.51% 4.97% 5.09% 5.06% 4.69%
--------------------------------
Best Quarter 1.99% (4th quarter of 1990)
Worst Quarter: 0.65% (3rd quarter of 1993)
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AVERAGE ANNUAL RETURNS(1) (as of 12/31/99)
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1 Year 5 Years 10 Years Since Inception
Class A shares 4.69% 5.07% 4.92% 7.35% (since 6/1/76)
Class Z shares 4.82% N/A N/A 5.05% (since 3/1/96)
Lipper Average(2) 4.49% 4.95% 4.80% N/A
7-DAY YIELD(1) (as of 12/31/99)
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Class A shares 5.37%
Class Z shares 5.49%
IBC Average(3) 5.15%
1 THE FUND'S RETURNS AND YIELD ARE AFTER DEDUCTION OF EXPENSES.
2 THE LIPPER AVERAGE IS BASED UPON THE AVERAGE RETURN OF ALL MUTUAL FUNDS IN
THE U.S. TAXABLE MONEY MARKET FUNDS CATEGORY. LIPPER RETURNS SINCE THE
INCEPTION OF EACH CLASS ARE 7.28% FOR CLASS A AND 4.79% FOR CLASS Z SHARES.
3 THE IBC AVERAGE IS BASED UPON THE AVERAGE YIELD OF ALL MUTUAL FUNDS IN THE
INTERNATIONAL BUSINESS COMMUNICATIONS FINANCIAL DATA TAXABLE MONEY MARKET
FUND CATEGORY.
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3
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Risk/Return Summary
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FEES AND EXPENSES
These tables show the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
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CLASS A CLASS Z
Maximum sales charge (load) None None
imposed on purchases (as a percentage of
offering price)
Maximum deferred sales charge (load) (as a None None
percentage of the lower of original purchase
price or sale proceeds)
Maximum sales charge (load) None None
imposed on reinvested dividends
and other distributions
Redemption fees None None
Exchange fee None None
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ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
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CLASS A CLASS Z
Management fees .301% .301%
+ Distribution and service (12b-1) fees .125% None
+ Other expenses .250% .250%
= Total annual Fund operating expenses .676% .551%
EXAMPLE
This example is intended to help you compare the fees and expenses of the Fund's
different share classes and compare the cost of investing in the Fund with the
cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
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1 YR 3 YRS 5 YRS 10 YRS
Class A shares $69 $217 $377 $843
Class Z shares $56 $177 $308 $692
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4 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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How the Fund Invests
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INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is MAXIMUM CURRENT INCOME CONSISTENT WITH
STABILITY OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY. While we make every
effort to achieve our objective, we can't guarantee success.
We invest in a diversified portfolio of short-term debt obligations which
include, but are not limited to, obligations issued by the U.S. Government, its
agencies and instrumentalities, as well as commercial paper, asset-backed
securities, funding agreements, variable rate demand notes, bills, notes and
other obligations issued by banks, corporations and other companies (including
trust structures), obligations issued by foreign banks, companies or foreign
governments, and municipal notes.
The Fund invests in high-quality money market instruments to try to provide
investors with current income while maintaining a stable net asset value of $1
per share. We manage the Fund to comply with specific rules designed for money
market mutual funds. This means that we manage the Fund's portfolio to comply
with the requirements of Investment Company Act of 1940 (the Investment Company
Act) Rule 2a-7. As such, we will not acquire any security with a remaining
maturity exceeding thirteen months, and we will maintain a dollar-weighted
average portfolio of 90 days or less. In addition, we will comply with the
diversification, quality and other requirements of Rule 2a-7. This means,
generally, that the instruments we purchase present "minimal credit risk" and
are of "eligible quality." "Eligible quality" for this purpose means a security:
(i) rated in one of the two highest short-term rating categories by at least two
nationally recognized statistical rating organizations (NRSROs) or, if only one
NRSRO has rated the security, so rated by that NRSRO; (ii) rated in one of the
three highest long-term rating categories by at least two NRSROs or, if only one
NRSRO has rated the security, so rated by that NRSRO; or (iii) if unrated, of
comparable quality as determined by the Fund's investment adviser. All
securities that we purchase will be denominated in U.S. dollars but may be
issued by foreign issuer.
COMMERCIAL PAPER is short-term debt obligations of banks, corporations and
other borrowers. The obligations are usually issued by financially strong
businesses and often include a line of credit to protect purchasers of the
obligations. An ASSET-BACKED SECURITY is a loan or note that pays interest based
upon the cash flow of a pool of assets, such as mortgages, loans and credit card
receivables. CERTIFICATES OF DEPOSIT, TIME DEPOSITS, BANKERS' ACCEPTANCES and
BANK NOTES are obligations issued by or through a bank. These instruments depend
upon the strength of the bank involved in the borrowing to give investors
comfort that the borrowing will be repaid when promised. FUNDING
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5
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How the Fund Invests
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AGREEMENTS are contracts issued by insurance companies that guarantee a return
of principal, plus some amount of interest. When purchased by money market
funds, funding agreements will typically be short-term and will provide an
adjustable rate of interest.
DEBT OBLIGATIONS in general, including those listed above and any others
that we may purchase, are basically written promises to repay a debt. Among the
various types of debt securities we may purchase, the terms of repayment may
vary, as may the commitment of other parties to honor the obligations of the
issuer of the security. We may purchase securities that include DEMAND FEATURES,
which allow us to demand repayment of a debt obligation before the obligation is
due or "matures." This means that we can purchase longer-term securities because
we can demand repayment of the obligation at an agreed-upon price within a
relatively short period of time. This procedure follows the rules applicable to
money market funds.
FOREIGN SECURITIES and foreign markets involve additional risk. Laws and
accounting standards typically are not as strict in foreign countries as they
are in the U.S. Foreign fixed income and currency markets may be less stable
than U.S. markets. Changes in the exchange rates of foreign currencies can
affect the value of foreign assets.
Any of the money market instruments that the Fund may purchase may be
accompanied with the right to resell the instrument prior to the instrument's
maturity. In addition, we may separately purchase rights to resell these
instruments. These rights are referred to as "PUTS" and are acquired by the Fund
to protect against a possible decline in the market value of the securities to
which the puts relate in the event of interest rate fluctuations, to shorten the
effective maturity of the security and to provide the Fund with liquidity to
meet shareholder redemption requests.
The securities that we may purchase may change over time as new types of
money market instruments are developed. We will purchase these new instruments,
however, only if their characteristics and features follow the rules governing
the operation of money market funds.
Our investment objective is a fundamental policy that cannot be changed
without shareholder approval. The Board of Directors of the Fund can change
investment policies that are not fundamental. For more information, see
"Investment Risks" below and the Statement of Additional Information,
"Description of the Fund, its Investments and Risks." The Statement of
Additional
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6 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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How the Fund Invests
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Information--which we refer to as the SAI--contains more information about the
Fund.
OTHER INVESTMENTS AND STRATEGIES
While the Fund invests principally in the securities described above, it may
invest in other securities or use certain investment strategies to increase
returns or protect its assets, if market conditions warrant.
The Fund intends to participate in one or more JOINT TRADING ACCOUNTS
whereby the Fund, along with other investment companies managed by Prudential
Investments Fund Management LLC, will jointly engage in repurchase agreements
and, subject to the issuance of an order by the Securities and Exchange
Commission, jointly purchase money market instruments. The ability of the Fund
to participate in these joint trading accounts will be conditioned upon
requirements imposed by such order, as may be amended from time to time.
The Fund may also invest in DEBT OBLIGATIONS ISSUED BY THE U.S. TREASURY.
Treasury securities have different interest rates and maturities, but they are
all backed by the full faith and credit of the U.S. Government.
Treasury debt obligations are sometimes "stripped" into their component
parts: the Treasury's obligation to make periodic interest payments and its
obligation to repay the amount borrowed. These STRIPPED SECURITIES are sold to
investors separately. Stripped securities do not make periodic interest
payments. They are typically sold at a discount and then redeemed for their face
value on their maturity dates. These securities increase in value when interest
rates fall and lose value when interest rates rise. However, the value of
stripped securities generally fluctuates more in response to interest rate
movements than the value of traditional debt securities. The Fund may try to
earn money by buying stripped securities at a discount and either selling them
after they increase in value or holding them until they mature.
The Fund may also invest in other DEBT OBLIGATIONS ISSUED OR GUARANTEED BY
THE U.S. GOVERNMENT and government-related entities. Some of these debt
securities are backed by the full faith and credit of the U.S. Government, like
obligations of the Government National Mortgage Association (GNMA or "Ginnie
Mae"). Debt securities issued by other government entities, like obligations of
the Federal National Mortgage Association (FNMA or "Fannie Mae") and the Student
Loan Marketing Association (SLMA or "Sallie Mae"), are not backed by the full
faith and credit of the U.S. Government. However, these issuers have the right
to borrow from the U.S. Treasury to meet their obligations. The debt securities
of other issuers, like the Farm Credit System, depend entirely upon their own
resources to repay their debt.
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7
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How the Fund Invests
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The Fund may also use REPURCHASE AGREEMENTS, where a party agrees to sell a
security to the Fund and then repurchase it at an agreed-upon price at a stated
time. These transactions constitute short term cash loans by the Fund to
financial institutions. This creates a fixed return for the Fund.
The Fund may use REVERSE REPURCHASE AGREEMENTS, where we borrow money on a
temporary basis by selling a security with an obligation to repurchase it at an
agreed-upon price and time. The Fund's use of reverse repurchase agreements is
limited to 10% of the value of its total assets.
The Fund may also purchase money market obligations on a "WHEN-ISSUED" or
"DELAYED-DELIVERY" basis. When the Fund makes this type of purchase, the price
and interest rate are fixed at the time of purchase, but delivery of and payment
for the obligations take place at a later time. The Fund does not earn interest
income until the date the obligations are delivered.
The Fund may purchase FLOATING RATE and VARIABLE RATE securities. These
securities pay interest at rates that change periodically to reflect changes in
market interest rates. Because these securities adjust the interest they pay,
they may be beneficial when interest rates are rising because of the additional
return the Fund will receive, and they may be detrimental when interest rates
are falling because of the reduction in interest payments to the Fund.
The Fund also follows certain policies when it BORROWS MONEY (the Fund may
borrow up to 10% of the value of its net assets); LENDS ITS SECURITIES to others
(the Fund may lend up to 10% of its total assets, including collateral received
in the transaction); and HOLDS ILLIQUID SECURITIES (the Fund may hold up to 10%
of its net assets in illiquid securities, including securities with legal or
contractual restrictions, those without a readily available market and
repurchase agreements with maturities longer than seven days). The Fund is
subject to certain investment restrictions that are fundamental policies, which
means they cannot be changed without shareholder approval. For more information
about these restrictions, see the SAI.
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8 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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How the Fund Invests
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INVESTMENT RISKS
As noted, all investments involve risk, and investing in the Fund is no
exception. This chart outlines the key risks and potential rewards of the
principal strategies and certain other investments of the Fund. See, too,
"Description of the Fund, Its Investments and Risks" in the SAI.
INVESTMENT TYPE
% OF FUND'S TOTAL ASSETS RISKS POTENTIAL REWARDS
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HIGH-QUALITY MONEY MARKET o Credit risk--the o A source of interest
OBLIGATIONS risk that default income
of an issuer would o May be more secure
UP TO 100% leave the Fund than stock and other
with unpaid securities since
interest or companies must pay
principal their debts before
they pay dividends
o Market risk--the
risk that bonds
and other debt
instruments may
lose value because
interest rates
change or there is
a lack of
confidence in a
group of borrowers
or in an industry
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MONEY MARKET OBLIGATIONS o Foreign markets, o Investors may
OF FOREIGN ISSUERS economies and realize higher
(DOLLAR-DENOMINATED) political systems returns based upon
may not be as higher interest
UP TO 100% stable as those in rates paid on
the U.S. foreign
investments
o Differences in
foreign laws, o Increased
accounting diversification by
standards, public expanding the
information and allowable choices
custody and of high quality
settlement debt securities
practices
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ILLIQUID SECURITIES o May be difficult o May offer a more
to value precisely attractive yield
UP TO 10% OF NET ASSETS than more widely
o May be difficult traded securities
to sell at the
time or price
desired
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9
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How the Fund is Managed
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BOARD OF DIRECTORS
The Fund's Board of Directors oversees the actions of the Manager, Investment
Adviser and Distributor and decides on general policies. The Board also oversees
the Fund's officers, who conduct and supervise the daily business operations of
the Fund.
MANAGER
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC (PIFM)
GATEWAY CENTER THREE, 100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
Under a management agreement with the Fund, PIFM manages the Fund's investment
operations and administers its business affairs. For the fiscal year ended
December 31, 1999, the Fund paid PIFM management fees of .301% of the Fund's
average net assets.
PIFM and its predecessors have served as manager or administrator to
investment companies since 1987. As of December 31, 1999, PIFM served as the
Manager to all 42 of the Prudential mutual funds, and as Manager or
administrator to 22 closed-end investment companies, with aggregate assets of
approximately $73.5 billion.
INVESTMENT ADVISER
The Prudential Investment Corporation, called Prudential Investments, is the
Fund's investment adviser and has served as an investment adviser to investment
companies since 1984. Its address is Prudential Plaza, 751 Broad Street, Newark,
NJ 07102. PIFM has responsibility for all investment advisory services,
supervises Prudential Investments and pays Prudential Investments for its
services.
Prudential Investments' fixed income group is organized into teams that
specialize by sector. The Fixed Income Investment Policy Committee, which is
comprised of senior investment staff from each sector team, provides guidance to
the teams regarding duration risk, asset allocations and general risk
parameters. Portfolio managers contribute bottom up security selection within
those guidelines.
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10 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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How the Fund is Managed
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DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Fund's
shares under a Distribution Agreement with the Fund. The Fund has a Distribution
and Service Plan pursuant to Rule 12b-1 under the Investment Company Act with
respect to Class A shares. Under the Plan and the Distribution Agreement, PIMS
pays the expenses of distributing the Fund's Class A shares and provides certain
shareholder support services. The Fund pays distribution and other fees from the
assets of Class A shares to PIMS as compensation for its services. These
fees--known as 12b-1 fees--are shown in the "Fees and Expenses" table. Because
these fees are paid from the Fund's assets on a continuous basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges. PIMS does not receive compensation from the
Fund for distributing the Fund's Class Z shares.
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Fund Distributions and Tax Issues
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Investors who buy shares of the Fund should be aware of some important tax
issues. For example, the Fund distributes DIVIDENDS of ordinary income and any
realized net CAPITAL GAINS to shareholders. These distributions are subject to
taxes, unless you hold your shares in a 401(k) plan, an Individual Retirement
Account (IRA), or some other qualified tax-deferred plan or account.
The following briefly discusses some of the important tax issues you should
be aware of, but is not meant to be tax advice. For tax advice, please speak
with your tax adviser.
DISTRIBUTIONS
The Fund distributes DIVIDENDS of any net investment income to shareholders
every month. The dividends you receive from the Fund will be taxed as ORDINARY
INCOME, whether or not they are reinvested in the Fund.
Although the Fund is not likely to realize capital gains because of the
types of securities we purchase, any realized net CAPITAL GAINS will be paid to
shareholders (typically once a year). Capital gains are generated when the Fund
sells assets for a profit.
For your convenience, Fund distributions of dividends and capital gains are
automatically reinvested in the Fund. If you ask us to pay the distributions in
cash, we will send you a check instead of purchasing more shares of the Fund.
Either way, the distributions are subject to taxes, unless your shares are held
in a qualified tax-deferred plan or account. For more information about
automatic reinvestment and other shareholder services, see "How to Buy, Sell and
Exchange Shares of the Fund--How To Buy Shares" at Step 4: Additional
Shareholder Services.
TAX ISSUES
Form 1099
Every year, you will receive a Form 1099, which reports the amount of dividends
and capital gains we distributed to you during the prior year. If you own shares
of the Fund as part of a qualified tax-deferred plan or account, your taxes are
deferred, so you will not receive a Form 1099. However, you will receive a Form
1099 when you take any distributions from your qualified tax-deferred plan or
account.
Fund distributions are generally taxable in the year they are received,
except where we declare certain dividends in December of a calendar year but
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12 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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Fund Distributions and Tax Issues
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actually pay them in January of the following year. In such cases, the dividends
are treated as if they were paid on December 31 of the prior year.
WITHHOLDING TAXES
If federal law requires you to provide the Fund with your tax identification
number and certifications as to your tax status, and you fail to do so, or if
you are otherwise subject to back-up withholding, we will withhold and pay to
the U.S. Treasury 31% of your distributions. Dividends of net investment income
and short-term capital gains paid to a NONRESIDENT FOREIGN SHAREHOLDER generally
will be subject to a U.S. withholding tax of 30%. This rate may be lower,
depending on any tax treaty the U.S. may have with the shareholder's country.
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13
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How to Buy, Sell and
Exchange Shares of the Fund
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HOW TO BUY SHARES
STEP 1: OPEN AN ACCOUNT
If you don't have an account with us or a securities firm that is permitted to
buy or sell shares of the Fund for you, call Prudential Mutual Fund Services LLC
(PMFS) at (800) 225-1852 or contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INVESTMENT SERVICES
P.O. BOX 15020
NEW BRUNSWICK, NJ 08906-5020
To purchase by wire, call the number above to obtain an application. After
PMFS receives your completed application, you will receive an account number.
For additional information about purchasing shares of the Fund, see the back
cover page of this prospectus. We have the right to reject any purchase order
(including an exchange into the Fund) or suspend or modify the Fund's sale of
its shares.
STEP 2: CHOOSE A SHARE CLASS
The Fund offers Class A and Class Z shares. Except as noted below, the minimum
initial investment for Class A shares is $1,000 and the minimum subsequent
investment is $100. There is no minimum initial or subsequent investment
requirement for Class Z shares. All minimum investment requirements are waived
for certain retirement and employee savings plans and custodial accounts for the
benefit of minors.
QUALIFYING FOR CLASS Z SHARES
BENEFIT PLANS. Certain group retirement plans may purchase Class Z shares if
they meet the required minimum for amount of assets, average account balance or
number of eligible employees. For more information about these requirements,
call Prudential at (800) 353-2847.
MUTUAL FUND PROGRAMS. Class Z shares also can be purchased by participants in
any fee-based program or trust program sponsored by Prudential or an affiliate
that includes the Fund as an available option. Class Z shares also can be
purchased by investors in certain programs sponsored by broker-dealers,
investment advisers and financial planners who have agreements with Prudential
Investments Advisory Group relating to:
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14 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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o Mutual fund "wrap" or asset allocation programs where the sponsor places
fund trades, links its clients' accounts to a master account in the
sponsor's name and charges its clients a management, consulting or other
fee for its services, or
o Mutual fund "supermarket" programs, where the sponsor links its clients'
accounts to a master account in the sponsor's name and the sponsor charges
a fee for its services.
Broker-dealers, investment advisers or financial planners sponsoring these
mutual fund programs may offer their clients both Class A shares and Class Z
shares in the Fund in connection with different pricing options for their
programs. Investors should carefully consider any separate transaction and other
fees charged by these programs in connection with investing in each available
shares class before selecting a share class.
OTHER TYPES OF INVESTORS. Class Z shares also can be purchased by any of the
following:
o Certain participants in the MEDLEY Program (group variable annuity
contracts) sponsored by Prudential for whom Class Z shares of the
Prudential Mutual Funds are an available option
o Current and former Directors/Trustees of the Prudential Mutual Funds
(including the Fund); and
o Prudential, with an investment of $10 million or more
PURCHASES Through PRUDENTIAL SECURITIES
Purchases of Class A shares of the Fund through Prudential Securities are made
through automatic investment procedures (the Autosweep program). You cannot
purchase Class A shares through Prudential Securities other than through the
Autosweep program, except as specifically provided (that is, you cannot make a
manual purchase).
The Autosweep program allows you to designate a money market fund as your
primary money sweep fund. If you do not designate a primary money sweep fund,
the Fund will automatically be your primary money sweep fund. You have the
option to change your primary money sweep fund at any time by notifying your
Prudential Securities Financial Advisor.
For individual retirement accounts (IRAs) and Benefit Plans in the
Autosweep program, all credit balances (that is, immediately available funds) of
$1 or more will be invested in the Fund on a daily basis. Prudential Securities
will arrange for the investment of the credit balance in the Fund and will
purchase shares of the Fund equal to that amount. This will occur on the
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How to Buy, Sell and
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business day following the availability of the credit balance. Prudential
Securities may use and retain the benefit of credit balances in your account
until Fund shares are purchased.
For accounts other than IRAs and Benefit Plans, shares of the Fund will be
purchased as follows:
o When your account has a credit balance of $10,000 or more, Prudential
Securities will arrange for the automatic purchase of shares of the
Fund. This will occur on the business day following the availability
of the credit balance
o When your account has a credit balance that results from a securities
sale totaling $1,000 or more, the available cash will be invested in
the Fund on the settlement date
o For all other credit balances of $1 or more, shares will be purchased
automatically at least once a month on the last business day of each
month
Purchases through Autosweep are subject to a minimum initial investment of
$1,000, which is waived for certain retirement and employee savings plans and
custodial accounts for the benefit of minors.
You will begin earning dividends on your shares purchased through the
Autosweep program on the first business day after the order is placed.
Prudential Securities will purchase shares of the Fund at the price determined
at 4:30 p.m. New York time on the business day following the existence of the
credit balance, which is the second business day after the availability of the
credit balance. Prudential Securities will use and retain the benefit of credit
balances in your account until Fund shares are purchased.
Your investment in the Fund will be held in the name of Prudential
Securities. Prudential Securities will receive all statements and dividends from
the Fund and will, in turn, send you account statements showing your purchases,
sales and dividends.
The charges and expenses of the Autosweep program are not reflected in the
Fees and Expenses tables. For information about participating in the Autosweep
program, you should contact your Prudential Securities Financial Advisor.
PURCHASES THROUGH THE PRUDENTIAL ADVANTAGE ACCOUNT PROGRAM
The Prudential Advantage Account Program (the Advantage Account Program) is a
financial services program available to clients of Pruco Securities Corporation
(Pruco) and provides for an automatic investment procedure similar to the
Autosweep program. The Advantage Account Program consists
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16 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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How to Buy, Sell and
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of two types of accounts: the Investor Account and the Advantage Account, which
offers additional services, such as a debit card and check writing.
The Advantage Account Program allows you to designate a money market fund
as your primary money sweep fund. If you do not designate a primary money sweep
fund, the Fund will automatically be your primary money sweep fund. You have the
option to change your primary money sweep fund at any time by notifying your
Pruco representative or the Advantage Service Center.
With the Advantage Account as well as the Investor Account for individual
retirement accounts (IRA), all credit balances (that is, immediately available
funds) of $1 or more will be invested in the Fund on a daily basis. Prudential
Securities (Pruco's clearing broker) arranges for the investment of the credit
balance in the Fund and will purchase shares of the Fund equal to that amount.
This will occur on the business day following the availability of the credit
balance. Prudential Securities may use and retain the benefit of credit balances
in your account until Fund shares are purchased.
If you have an Investor Account (non-IRA), shares of the Fund will be
purchased as follows:
o When your account has a credit balance of $10,000 or more, Prudential
Securities will arrange for the automatic purchase of shares of the
Fund with all cash balances of $1 or more. This will occur on the
business day following the availability of the credit balance
o When your account has a credit balance that results from a securities
sale totaling more than $1,000, all cash balances of $1 or more will
be invested in the Fund on the settlement date
o For all other credit balances of $1 or more, shares will be purchased
automatically at least once a month on the last business day of each
month
You will begin earning dividends on your shares purchased through the
Advantage Account Program on the first business day after the order is placed.
Prudential Securities will purchase shares of the Fund at the price determined
at 4:30 p.m. New York time on the business day following the availability of the
credit balance. Prudential Securities will use and retain the benefit of credit
balances in your account until Fund shares are purchased.
Purchases of, withdrawals from and dividends from the Fund will be shown on
your Advantage Account or Investor Account statement.
The charges and expenses of the Advantage Account Program are not reflected
in the Shareholder Fees and Expenses table. For information about participating
in the Advantage Account Program, you should call (800) 235-7637.
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17
<PAGE>
MANUAL PURCHASES
You may make a manual purchase (that is, a non-money market sweep purchase) of
Fund shares in either of the following situations:
o you do not participate in a money market sweep program (the Autosweep
program or the Advantage Account Program), or
o you participate in a money market sweep program, but the Fund is not
designated as your primary money market sweep fund.
The minimum initial investment for a manual purchase of Class A shares of
the Fund is $1,000 and the minimum subsequent investment is $100, except that
all minimum investment requirements are waived for certain retirement and
employee savings plans and custodial accounts for the benefit of minors.
If you make a manual purchase through Prudential Securities, Prudential
Securities will place your order for shares of the Fund on the business day
after the purchase order is received for settlement that day, which is the
second business day after receipt of the purchase order by Prudential
Securities. Prudential Securities may use and retain the benefit of credit
balances in a client's brokerage account until monies are delivered to the Fund
(Prudential Securities delivers federal funds on the business day after
settlement).
If you make a manual purchase through the Fund's Distributor, through your
broker or dealer (other than Prudential Securities) or directly from the Fund,
shares will be purchased at the net asset value next determined after receipt of
your order and payment in proper form. When your payment is received by 4:30
p.m., New York time, shares will be purchased that day and you will begin to
earn dividends on the following business day. If you purchase shares through a
broker or dealer, your broker or dealer will forward your order and payment to
the Fund. You should contact your broker or dealer for information about
services that they may provide, including an automatic sweep feature.
Transactions in Fund shares may be subject to postage and other charges imposed
by your broker or dealer. Any such charge is retained by your broker or dealer
and is not sent to the Fund.
STEP 3: UNDERSTANDING THE PRICE YOU'LL PAY
When you invest in a mutual fund, you buy shares of the fund. Shares of a money
market mutual fund, like the Fund, are priced differently than shares of common
stock and other securities.
The price you pay for each share of the Fund is based on the share value.
The share value of a mutual fund--known as the NET ASSET VALUE or NAV--is
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18 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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determined by a simple calculation--it's the total value of the fund (assets
minus liabilities) divided by the total number of shares outstanding. In
determining NAV, the Fund values its securities using the amortized cost method.
The Fund seeks to maintain an NAV of $1 per share at all times. Your broker may
charge you a separate or additional fee for purchases of shares.
We determine the NAV of our shares once each business day at 4:30 p.m. New
York time on days that the New York Stock Exchange is open for trading. The Fund
may have portfolio securities that are primarily listed on foreign exchanges
that trade on weekends or other days when we do not price our shares. Therefore,
the NAV of our shares may change on days when you will not be able to purchase
or redeem the Fund's shares. We do not determine NAV on days when we have not
received any orders to purchase, sell, or exchange or when changes in the value
of the Fund's portfolio do not affect the NAV.
STEP 4: ADDITIONAL SHAREHOLDER SERVICES
As a Fund shareholder, you can take advantage of the following services and
privileges:
AUTOMATIC REINVESTMENT. As we explained in the "Fund Distributions and Tax
Issues" section, the Fund pays out--or distributes--its net investment income
and capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Fund at NAV. If you want your
distributions paid in cash, you can indicate this preference on your
application, notify your broker or notify the Transfer Agent in writing (at the
address below) at least five business days before the date we determine who
receives dividends.
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTENTION: ACCOUNT MAINTENANCE
P.O. BOX 15015
NEW BRUNSWICK, NJ 08906-5015
REPORTS TO SHAREHOLDERS. Every year we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Fund. To reduce Fund expenses, we may send one
annual shareholder report, one semi-annual shareholder report and one annual
prospectus per household, unless you instruct us or your broker otherwise.
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HOW TO SELL YOUR SHARES
You can sell your shares of the Fund at any time, subject to certain
restrictions. When you sell shares of the Fund--also known as redeeming
shares--the price you will receive will be the NAV next determined after the
Transfer Agent, the Distributor or your broker receives your order to sell. If
your broker holds your shares, your broker must receive your order to sell by
4:30 p.m. New York time to process the sale on that day. Otherwise contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: REDEMPTION SERVICES
P.O. BOX 15010
NEW BRUNSWICK, NJ 08906-5010
Generally, we will pay you for the shares that you sell within seven days
after the Transfer Agent, the Distributor or your broker receives your sell
order. If you hold shares through a broker, payment will be credited to your
account. If you are selling shares you recently purchased with a check, we may
delay sending you the proceeds until your check clears, which can take up to 10
days from the purchase date. You can avoid delay if you purchase shares by wire,
certified check or cashier's check. Your broker may charge you a separate or
additional fee for sales of shares.
RESTRICTIONS ON SALES. There are certain times when you may not be able to sell
shares of the Fund or when we may delay paying you the proceeds from a sale.
This may happen during unusual market conditions or emergencies when the Fund
can't determine the value of its assets or sell its holdings. For more
information, see the SAI, "Purchase and Redemption of Fund Shares."
If you are selling more than $100,000 of shares, you want the check sent to
someone or someplace that is not in our records, or you are a business or trust,
and if you hold your shares directly with the Transfer Agent, you will need to
have the signature on your sell order signature guaranteed by an "eligible
guarantor institution." An "eligible guarantor institution" includes any bank,
broker-dealer or credit union. For more information, see the SAI, "Purchase and
Redemption of Fund Shares."
REDEMPTION IN KIND. If the sales of Fund shares you make during any 90-day
period reach the lesser of $250,000 or 1% of the value of the Fund's net assets,
we can then give you securities from the Fund's portfolio instead of cash. If
you want to sell the securities for cash, you would have to pay the costs
charged by a broker.
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AUTOMATIC REDEMPTION FOR AUTOSWEEP. If you participate in the Autosweep program,
your Fund shares may be automatically redeemed to cover any deficit in your
Prudential Securities account. The amount redeemed will be the nearest dollar
amount necessary to cover the deficit.
The amount of the redemption will be the lesser of the total value of Fund
shares held in your Prudential Securities account or the deficit in your
Prudential Securities account. If you use this automatic redemption procedure
and want to pay for a securities transaction in your account other than through
this procedure, you must deposit cash in your securities account before the
settlement date. If you use this automatic redemption procedure and want to pay
any other deficit in your securities account other than through this procedure,
you must deposit cash in your securities account before you incur the deficit.
Redemptions are automatically made by Prudential Securities, to the nearest
dollar, on each day to satisfy deficits from securities transactions or to honor
your redemption requests. Your account will be automatically scanned for
deficits each day and, if there is insufficient cash in your account, we will
redeem an appropriate number of shares of the Fund at the next determined NAV to
satisfy any remaining deficit. You are entitled to any dividends declared on the
redeemed shares through the day before the redemption is made. Dividends
declared on the redemption date will be retained by Prudential Securities, which
has advanced monies to satisfy deficits in your account.
AUTOMATIC REDEMPTION FOR THE ADVANTAGE ACCOUNT. If you participate in the
Advantage Account Program, your Fund shares may be automatically redeemed to
cover any deficit in your securities account. The amount redeemed will be the
nearest dollar amount necessary to cover the deficit.
The amount of the redemption will be the lesser of the total value of Fund
shares held in your securities account or the deficit in your securities
account. A deficit in your Advantage Account may result from activity arising
under the program, such as debit balances incurred by the use of the Visa(R)
Account, including Visa purchases, cash advances and Visa Account checks. Your
account will be automatically scanned for deficits each day and, if there is
insufficient cash in your account, we will redeem an appropriate number of
shares of the Fund to satisfy any remaining deficit. You are entitled to any
dividends declared on the redeemed shares through the day before the redemption
is made. Dividends declared on the redemption date will be retained by
Prudential Securities, which has advanced monies to satisfy deficits in your
account.
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Redemptions are automatically made by Prudential Securities, to the nearest
dollar, on each day to satisfy deficits from securities transactions or to honor
your redemption requests.
HOW TO EXCHANGE YOUR SHARES
You can exchange your shares of the Fund for shares of the same class in certain
other Prudential Mutual Funds--including certain money market funds--if you
satisfy the minimum investment requirements of such other Prudential Mutual
Fund. For example, you can exchange Class A shares of the Fund for Class A
shares of another Prudential Mutual Fund, but you can't exchange Class A shares
for Class B, Class C or Class Z shares, except that shares purchased prior to
January 22, 1990 that are subject to a contingent deferred sales charge can be
exchanged for Class B shares.
If you hold shares through a broker, you must exchange shares through your
broker. Otherwise, contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: EXCHANGE PROCESSING
P.O. BOX: 15010
NEW BRUNSWICK, NJ 08906-5010
When you exchange Class A shares of the Fund for Class A shares of any
other Prudential Mutual Fund, you will be subject to any sales charge that may
be imposed by such other Prudential Mutual Fund. The sales charge is imposed at
the time of your exchange.
If you qualify to purchase Class Z shares, any Class A shares that you own
will be automatically exchanged for Class Z shares on a quarterly basis.
Eligibility for this special exchange privilege is determined on the business
day prior to the date of the exchange.
If you participate in any fee-based program where the Fund is an available
investment option, your Class A shares, if any, will be automatically exchanged
for Class Z shares when you elect to participate in the fee-based program. When
you no longer participate in the program, all of your Class Z shares, including
shares purchased while you were in the program, will be automatically exchanged
for Class A shares. Likewise, if you are entitled to purchase Class Z shares as
a participant in Prudential Securities' 401(k) Plan and you seek to transfer
your Class Z shares out of the 401(k) Plan after your voluntary or involuntary
termination of employment or retirement, your Class Z shares held in the 401(k)
Plan will be automatically exchanged for Class A shares.
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FREQUENT TRADING
Frequent trading of Fund shares in response to short-term fluctuations in the
market--also known as "market timing"--may make it very difficult to manage the
Fund's investments. When market timing occurs, the Fund may have to sell
portfolio securities to have the cash necessary to redeem the market timer's
shares. This can happen at a time when it is not advantageous to sell any
securities, so the Fund's performance may be hurt. When large dollar amounts are
involved, market timing can also make it difficult to use long-term investment
strategies because we cannot predict how much cash the Fund will have to invest.
When, in our opinion, such activity would have a disruptive effect on portfolio
management, the Fund reserves the right to refuse purchase orders and exchanges
into the Fund by any person, group or commonly controlled accounts. The decision
may be based upon dollar amount, volume and frequency of trading. The Fund may
notify a market timer of rejection of an exchange purchase order after the day
the order is placed. If the Fund allows a market timer to trade Fund shares, it
may require the market timer to enter into a written agreement to follow certain
procedures and limitations.
TELEPHONE REDEMPTIONS AND EXCHANGES
You may redeem or exchange your shares in any amount by calling the Fund at
(800) 225-1852 before 4:15 p.m., New York time. You will receive a redemption
amount based on that day's NAV.
The Fund's Transfer Agent will record your telephone instructions and
request specific account information before redeeming or exchanging shares. The
Fund will not be liable if it follows instructions that it reasonably believes
are made by the shareholder. If the Fund does not follow reasonable procedures,
it may be liable for losses due to unauthorized fraudulent telephone
instructions.
In the event of drastic economic or market changes, you may have difficulty
in redeeming or exchanging your shares by telephone. If this occurs, you should
consider redeeming or exchanging your shares by mail.
The telephone redemption or exchange privilege may be modified or
terminated at any time. If this occurs, you will receive a written notice from
the Fund.
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23
<PAGE>
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Financial Highlights
- --------------------------------------------------------------------------------
The financial highlights below are intended to help you evaluate the Fund's
financial performance. The TOTAL RETURN in the chart represents the rate that a
shareholder earned on an investment in the Fund, assuming reinvestment of all
dividends and other distributions. The information is for shares of the Fund for
the periods indicated.
Review this chart with the financial statements which appear in the SAI.
Additional performance information is contained in the annual report, which you
can receive at no charge.
CLASS A SHARES
The financial highlights for the three fiscal years ended December 31, 1999 were
audited by PricewaterhouseCoopers LLP, independent accountants, and the
financial highlights for the two years ended December 31, 1996 were audited by
other independent auditors. Their reports were unqualified.
<TABLE>
<CAPTION>
CLASS A SHARES (FISCAL YEARS ENDED 12-31)
PER SHARE OPERATING PERFORMANCE 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income and net
realized gains .046 .050 .050 .048 .054
Dividends and distributions to
shareholders (.046) (.050) (.050) (.048) (.054)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total return(1) 4.69% 5.06% 5.09% 4.97% 5.51%
<CAPTION>
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets, end of year
(000) $6,393,586 $6,152,044 $6,863,647 $7,315,223 $7,221,658
Ratios to average net assets:
Net investment income 4.60% 4.95% 4.97% 4.83% 5.38%
Expenses .68% .69% .70% .71% .69%
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</TABLE>
1 TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND ANY OTHER DISTRIBUTIONS.
IT IS CALCULATED ASSUMING SHARES ARE PURCHASED ON THE FIRST DAY AND SOLD ON
THE LAST DAY OF EACH YEAR PERIOD.
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24 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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Financial Highlights
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CLASS Z SHARES
The financial highlights for the three fiscal years ended December 31, 1999 were
audited by PricewaterhouseCoopers LLP, independent accountants, and the
financial highlights for the period from March 1, 1996 to December 31, 1996 was
audited by other independent auditors. Their reports were unqualified.
CLASS Z SHARES (FISCAL YEARS ENDED 12-31)
PER SHARE OPERATING PERFORMANCE 1999 1998 1997 1996(1)
- --------------------------------------------------------------------------------
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income and net realized
gains .047 .051 .051 .040
Dividends and distributions to (.047) (.051) (.051) (.040)
shareholders
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
Total return(2) 4.82% 5.19% 5.22% 4.12%
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA 1999 1998 1997 1996
- --------------------------------------------------------------------------------
Net assets, end of period (000) $259,529 $212,280 $157,352 $149,212
Ratios to average net assets:
Net investment income 4.74% 5.07% 5.10% 4.86%(3)
Expenses .55% .57% .58% .59%(3)
- --------------------------------------------------------------------------------
1 INFORMATION SHOWN IS FOR THE PERIOD FROM 3-1-96, WHEN CLASS Z SHARES WERE
FIRST OFFERED, THROUGH 12-31-96.
2 TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND ANY OTHER DISTRIBUTIONS.
IT IS CALCULATED ASSUMING SHARES ARE PURCHASED ON THE FIRST DAY AND SOLD ON
THE LAST DAY OF EACH PERIOD REPORTED. TOTAL RETURN FOR PERIODS OF LESS THAN
A FULL YEAR IS NOT ANNUALIZED.
3 ANNUALIZED.
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25
<PAGE>
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The Prudential Mutual Fund Family
- --------------------------------------------------------------------------------
Prudential offers a broad range of mutual funds designed to meet your individual
needs. For information about these funds, contact your financial adviser or call
us at (800) 225-1852. Read the prospectus carefully before you invest or send
money.
STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Index Series Fund
PRUDENTIAL SMALL-CAP INDEX FUND
PRUDENTIAL STOCK INDEX FUND
The Prudential Investment Portfolios, Inc.
PRUDENTIAL JENNISON GROWTH FUND
PRUDENTIAL JENNISON GROWTH
& INCOME FUND
Prudential Mid-Cap Value Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL HEALTH SERVICES FUND
PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL UTILITY FUND
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value
Fund, Inc.
Prudential Tax-Managed Funds
PRUDENTIAL TAX-MANAGED EQUITY FUND
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Target Funds
LARGE CAPITALIZATION GROWTH FUND
LARGE CAPITALIZATION VALUE FUND
SMALL CAPITALIZATION GROWTH FUND
SMALL CAPITALIZATION VALUE FUND
Asset Allocation/Balanced Funds
Prudential Balanced Fund
Prudential Diversified Funds
CONSERVATIVE GROWTH FUND
MODERATE GROWTH FUND
HIGH GROWTH FUND
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund
Global Funds
Global Stock Funds
Prudential Developing Markets Fund
PRUDENTIAL DEVELOPING MARKETS
EQUITY FUND
PRUDENTIAL LATIN AMERICA EQUITY FUND
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Index Series Fund
PRUDENTIAL EUROPE INDEX FUND
PRUDENTIAL PACIFIC INDEX FUND
Prudential Natural Resources
Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
PRUDENTIAL GLOBAL GROWTH FUND
PRUDENTIAL INTERNATIONAL VALUE FUND
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
Global Utility Fund, Inc.
Target Funds
INTERNATIONAL EQUITY FUND
Global Bond Funds
Prudential Global Total Return
Fund, Inc.
Prudential International Bond
Fund, Inc.
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26 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
<PAGE>
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The Prudential Mutual Fund Family
- --------------------------------------------------------------------------------
BOND FUNDS
Taxable Bond Funds
Prudential Diversified Bond Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
SHORT-INTERMEDIATE TERM SERIES
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return
Fund, Inc.
Prudential Index Series Fund
PRUDENTIAL BOND MARKET INDEX FUND
Prudential Structured Maturity Fund, Inc.
INCOME PORTFOLIO
Target Funds
TOTAL RETURN BOND FUND
Tax-Exempt Bond Funds
Prudential California Municipal Fund
CALIFORNIA SERIES
CALIFORNIA INCOME SERIES
Prudential Municipal Bond Fund
HIGH INCOME SERIES
INSURED SERIES
Prudential Municipal Series Fund
FLORIDA SERIES
MASSACHUSETTS SERIES
NEW JERSEY SERIES
NEW YORK SERIES
NORTH CAROLINA SERIES
OHIO SERIES
PENNSYLVANIA SERIES
Prudential National Municipals
Fund, Inc.
MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
LIQUID ASSETS FUND
NATIONAL MONEY MARKET FUND
Prudential Government Securities Trust
MONEY MARKET SERIES
U.S. TREASURY MONEY MARKET SERIES
Prudential Special Money Market
Fund, Inc.
MONEY MARKET SERIES
Prudential MoneyMart Assets, Inc.
Tax-Free Money Market Funds
Prudential Tax-Free Money Fund, Inc.
Prudential California Municipal Fund
CALIFORNIA MONEY MARKET SERIES
Prudential Municipal Series Fund
CONNECTICUT MONEY MARKET SERIES
MASSACHUSETTS MONEY MARKET SERIES
NEW JERSEY MONEY MARKET SERIES
NEW YORK MONEY MARKET SERIES
Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
INSTITUTIONAL MONEY MARKET SERIES
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28 Prudential MoneyMart Assets, Inc. [LOGO] (800) 225-1852
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FOR MORE INFORMATION
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Please read this prospectus before You can also obtain copies of Fund
you invest in the Fund and keep it documents from the Securities and
for future reference. For information Exchange Commission as follows:
or shareholder questions contact:
BY MAIL
PRUDENTIAL MUTUAL FUND SERVICES LLC Securities and Exchange Commission
P.O. BOX 15005 Public Reference Section
NEW BRUNSWICK, NJ 08906-5005 Washington, DC 20549-0102
(800) 225-1852
(732) 482-7555 BY ELECTRONIC REQUEST
(if calling from outside the U.S.) [email protected]
(The SEC charges a fee to copy
- --------------------------------------- documents.)
Outside Brokers Should Contact:
PRUDENTIAL INVESTMENT MANAGEMENT IN PERSON
SERVICES LLC Public Reference Room in
P.O. BOX 15035 Washington, DC
NEW BRUNSWICK, NJ 08906-5035 (For hours of operation, call
(800) 778-8769 1-202-942-8090.)
- --------------------------------------- VIA THE INTERNET
Visit Prudential's Web Site At: on the EDGAR Database at
HTTP://WWW.PRUDENTIAL.COM http://www.sec.gov
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Additional information about the ----------------------------------------------------
Fund can be obtained without charge
and can be found in the following CUSIP Nos.: Quotron Symbols:
documents:
Class A Shares--74435H-10-2 PBMXX
STATEMENT OF ADDITIONAL Class Z Shares--74435H-20-1 PMZXX
INFORMATION (SAI)
(incorporated by reference into Investment Company Act File No: 811-2619
this prospectus)
[logo] Printed on Recycled Paper
ANNUAL REPORT
(contains a discussion of the market
conditions and investment strategies that
significantly affect the Fund's performance)
SEMI-ANNUAL REPORT
MF108A
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PRUDENTIAL MONEYMART ASSETS, INC.
Statement of Additional Information
Dated February 28, 2000
Prudential MoneyMart Assets, Inc. (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 "How the Fund Invests" in the Fund's Prospectus and
"Description of the Fund, its Investments and Risks" below.
The Fund's address is Gateway Center Three, 100 Mulberry Street, Newark,
New Jersey 07102-4077, and its telephone number is (800) 225-1852.
This Statement of Additional Information sets forth information about the
Fund. This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated February 28, 2000, a copy
of which may be obtained from the Fund upon request at the address or telephone
number noted above.
TABLE OF CONTENTS
PAGE
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Fund History.............................................................. B-2
Description of the Fund, its Investments and Risks........................ B-2
Investment Restrictions................................................... B-4
Management of the Fund.................................................... B-6
Control Persons and Principal Holders of Securities....................... B-9
Investment Advisory and Other Services.................................... B-9
Brokerage Allocation and Other Practices.................................. B-12
Securities and Organization............................................... B-13
Purchase and Redemption of Fund Shares.................................... B-13
Net Asset Value........................................................... B-15
Taxes, Dividends and Distributions........................................ B-15
Calculation of Yield...................................................... B-16
Financial Statements...................................................... B-18
Report of Independent Accountants ........................................ B-26
Appendix--Description of Ratings.......................................... I-1
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MF108B
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FUND HISTORY
The Fund was organized as a corporation under the laws of Maryland on
December 22, 1975.
DESCRIPTION OF THE FUND, ITS INVESTMENTS AND RISKS
(a) CLASSIFICATION. The Fund is a diversified open-end management
investment company.
(b) INVESTMENT STRATEGIES AND RISKS.
The Fund's investment objective is maximum current income consistent with
stability of capital and the maintenance of liquidity. While the principal
investment policies and strategies for seeking to achieve this objective are
described in the Fund's Prospectus, the Fund may from time to time also utilize
the securities, instruments, policies and strategies described below in seeking
to achieve its objective. The Fund may not be successful in achieving its
objective and you can lose money.
OBLIGATIONS ISSUED OR GUARANTEED BY THE U.S. GOVERNMENT, ITS AGENCIES AND
INSTRUMENTALITIES
Obligations issued or guaranteed as to principal and interest by the U.S.
Government may be acquired by the Fund in the form of custodial receipts that
evidence ownership of future interest payments, principal payments or both on
certain United States Treasury notes or bonds. Such notes and bonds are held in
custody by a bank on behalf of the owners. These custodial receipts are known by
various names, including "Treasury Receipts," "Treasury Investment Growth
Receipts" (TIGRs) and "Certificates of Accrual on Treasury Securities" (CATS).
The Fund does not intend to purchase Treasury Receipts, TIGRs or CATS during the
coming year.
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 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.
DEMAND FEATURES AND GUARANTEES
The Fund may purchase demand features and guarantees. A demand feature
supporting a money market fund instrument can be relied upon in a number of
respects. First, the demand feature can be relied upon to shorten the maturity
of the underlying instrument. Second, the demand feature, if unconditional, can
be used to evaluate the credit quality of the underlying security. This means
that the credit quality of the underlying security can be based solely on the
credit quality of the unconditional demand feature supporting that security.
A GUARANTEE is a form of unconditional credit support that may include bond
insurance, a letter of credit, and an unconditional demand feature. A money
market fund holding a security subject to a guarantee may determine the credit
quality of the underlying security solely on the basis of the credit quality of
the supporting guarantee.
The Fund can invest 10% of its total assets in securities directly issued
by, or supported by, a demand feature provider or guarantor. Rule 2a-7 under the
Investment Company Act of 1940, as amended (the Investment Company Act) provides
a more stringent limit on demand features and guarantees that are "second tier
securities" under the Rule; that is, those securities that are rated in the
second highest category by a specified number of rating organizations.
Specifically, Rule 2a-7 provides that a money market fund cannot invest more
than 5% of its total assets in securities issued or supported by second tier
demand features or guarantees that are issued by the institution that issued
such second tier securities.
LENDING OF SECURITIES
Consistent with applicable regulatory requirements, the Fund may lend its
portfolio to brokers, dealers and financial institutions, provided that
outstanding loans of the Fund do not exceed in the aggregate 10% of the value of
the Fund's total assets and, provided that such loans are callable at any time
by the Fund and are at all times secured by cash or U.S. Government securities
that is at least equal to the market value, determined daily, of the loaned
securities. The advantage of such loans is that the Fund continues to receive
payments in lieu of the interest on the loaned securities, while at the same
time earning interest either directly
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from the borrower or on the collateral which will be invested in short-term
obligations. Any voting rights, or rights to consent, relating to the securities
loaned pass to the borrower. However, if a material event affecting the
investment occurs, such loans will be called so that the loaned securities may
be voted by the Fund.
A loan may be terminated by the borrower on one business day's notice or by
the Fund at any time. If the borrower fails to maintain the requisite amount of
collateral, the loan automatically terminates, and the Fund could use the
collateral to replace the securities while holding the borrower liable for any
excess of replacement cost over collateral. As with any extensions of credit,
there are risks of delay in recovery and in some cases, loss of rights in the
collateral should the borrower of the securities fail financially. However,
these loans of portfolio securities will only be made to firms determined to be
creditworthy pursuant to procedures approved by the Board of Directors of the
Fund. On termination of the loan, the borrower is required to return the
securities to the Fund, and any gain or loss in the market price during the loan
would inure to the Fund.
The Fund will pay reasonable finders', administrative and custodial fees in
connection with a loan of its securities or may share the interest earned on
collateral with the borrower.
ILLIQUID SECURITIES
The Fund may not hold more than 10% of its net assets in illiquid
securities. If the Fund were to exceed this limit, the investment adviser would
take prompt action to reduce the Fund's holdings in illiquid securities to no
more than 10% of its net assets, as required by applicable law. Historically,
illiquid securities have included securities subject to contractual or legal
restrictions on resale because they have not been registered under the
Securities Act of 1933, as amended (Securities Act), securities which are
otherwise not readily marketable and repurchase agreements having a maturity of
longer than seven days. Securities which have not been registered under the
Securities Act are referred to as private placements or restricted securities
and are purchased directly from the issuer or in the secondary market. Mutual
funds do not typically hold a significant amount of these restricted or other
illiquid securities because of the potential for delays on resale and
uncertainty in valuation. Limitations on resale may have an adverse effect on
the marketability of portfolio securities and a mutual fund might be unable to
dispose of restricted or other illiquid securities promptly or at reasonable
prices and might thereby experience difficulty satisfying redemptions within
seven days. A mutual fund might also have to register such restricted securities
in order to dispose of them, resulting in additional expense and delay. Adverse
market conditions could impede such a public offering of securities.
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
securities.
Rule 144A under the Securities Act allows for a broader institutional
trading market for securities otherwise subject to restriction on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers.
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 under procedures established by the
Board of Directors. 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 (NRSROs), 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.
BORROWING
The Fund may borrow from banks (including through entering into reverse
repurchase agreements) up to and including 10% of the value of its net assets
taken at cost for temporary or emergency purposes. The Fund may pledge up to and
including 10% of its net assets to secure such borrowings. The Fund will not
purchase portfolio securities if its borrowings (other than permissible
securities loans) exceed 5% of its total assets.
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REPURCHASE AGREEMENTS
The Fund may purchase securities and concurrently enter into "repurchase
agreements" with the seller, whereby the seller agrees to repurchase such
securities at a specified price within a specified time (generally seven days or
less). The repurchase agreements provide that the Fund will sell the underlying
instruments back to the dealer or the bank at the specified price and at a fixed
time in the future, usually not more than seven days from the date of purchase.
The difference between the purchase price and the resale price represents the
interest earned by the Fund, which is unrelated to the coupon rate or maturity
of the purchased security. Repurchase agreements will at all times be fully
collateralized in an amount at least equal to the resale price. Such collateral
will be held by the Custodian, directly or through a sub-custodian, and will be
maintained physically or in a book-entry account.
The Fund will enter into repurchase transactions only with parties which
meet creditworthiness standards approved by the Fund's Board of Directors. The
Fund's investment adviser monitors the creditworthiness of such parties under
the general supervision of the Board of Directors. In the event of a default or
bankruptcy by a seller, the Fund will promptly seek to liquidate the collateral.
To the extent that the proceeds upon sale of such collateral upon a default in
the obligation to repurchase are less than the resale price, the Fund will
suffer a loss if the financial institution that is a party to the repurchase
agreement petitions for bankruptcy or becomes subject to the U.S. Bankruptcy
Code because the law regarding the rights of the trust is unsettled. As a
result, under these circumstances, there may be a restriction on the Fund's
ability to sell the collateral, and the Fund could suffer a loss.
The Fund intends to participate in a joint repurchase account with other
investment companies managed by Prudential Investments Fund Management LLC (PIFM
or the Manager) pursuant to an order of the Securities and Exchange Commission
(SEC). On a daily basis, any uninvested cash balances of the Fund may be
aggregated with those of such other investment companies and invested in one or
more repurchase agreements. The Fund participates in the income earned or
accrued in the joint account based on the percentage of its investment. In
connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be, under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which equals or
exceeds the resale price of the agreement. If the seller defaults and the value
of the collateral declines or if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements have the characteristics of borrowing and
involve the sale of securities held by the Fund with an agreement to repurchase
the securities at a specified price, date and interest payment. The Fund intends
only to use the reverse repurchase technique when it will be to its advantage to
do so. These transactions are only advantageous if the Fund has an opportunity
to earn a greater rate of interest on the cash derived from the transaction than
the interest cost of obtaining that cash. The Fund may be unable to realize
earnings from the use of the proceeds equal to or greater than the interest
required to be paid. The use of reverse repurchase agreements may exaggerate any
increase or decrease in the value of the Fund's portfolio. The Fund's Custodian
will maintain in a segregated account cash or other liquid assets maturing not
later than the expiration of the reverse repurchase agreements having a value
equal to or greater than such commitments.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The Fund may purchase securities on a "when-issued" or delayed delivery
basis. When-issued or delayed delivery transactions arise when securities are
purchased or sold by the Fund with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price and
yield to the Fund at the time of entering into the transaction. The Fund will
limit such purchases to those in which the date of delivery and payment falls
within 90 days of the date of the commitment. The Fund will make commitments to
purchase such when-issued securities only with the intention of actually
acquiring the securities. The Fund's Custodian will segregate cash or other
liquid assets having a value equal to or greater than the Fund's purchase
commitments. If the Fund chooses to dispose of the when-issued security prior to
its receipt of, and payment for, the security, it could, as with the disposition
of any other portfolio security, incur a gain or loss due to market
fluctuations. The securities so purchased are subject to market fluctuation and
no interest accrues to the purchaser during the period between purchase and
settlement.
INVESTMENT RESTRICTIONS
The following restrictions are fundamental policies. Fundamental policies
are those which cannot be changed without the approval of the holders of a
majority of the outstanding voting securities of the Fund. A "majority of the
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
B-4
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50% of the outstanding voting shares. With respect to the submission of a change
in fundamental policy or investment objective of the Fund, such matters shall be
deemed to have been effectively acted upon with respect to the Fund if a
majority of the outstanding voting securities of the Fund votes for the approval
of such matters as provided above.
The following investment restrictions are fundamental policies of the Fund
and may not be changed except as described above.
The Fund may not:
1. Purchase common stock or other voting securities, preferred stock,
warrants or other equity securities.
2. Purchase any securities (other than obligations of the U.S. Government,
its agencies and instrumentalities) if as a result 25% or more of the value of
the Fund's total assets (determined at the time of investment) would be invested
in the securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to money market instruments of domestic banks, U.S. branches of foreign
banks that are subject to the same regulations as U.S. banks and foreign
branches of domestic banks (provided that the domestic bank is unconditionally
liable in the event of the failure of the foreign branch to make payment on its
instruments for any reason).
3. Purchase the securities of any one issuer, other than the U.S.
Government or its agencies and instrumentalities, if more than 5% of the value
of the Fund's total assets would be invested in securities of such issuer.
4. Make cash loans except through the purchase of debt obligations and the
entry into repurchase agreements permitted under "Investment Objective and
Policies." The Fund may also engage in the practice of lending its securities
only against fully comparable collateral. See paragraph 13 below.
5. Borrow money, except from banks for temporary or emergency purposes and
then only in amounts up to 10% of the value of the Fund's net assets. This
borrowing provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate abnormally heavy redemption requests, if
they should occur, or to permit the Fund to obtain short-term credits necessary
for the settlement of transactions, and is not for investment purposes. Interest
paid on borrowings is not available for investment by the Fund. Secured
temporary borrowings may take the form of reverse repurchase agreements,
pursuant to which the Fund would sell portfolio securities for cash and
simultaneously agree to repurchase them at a specified date for the same amount
of cash plus an interest component. The SEC has issued a release requiring, in
effect, that the Fund maintain, in a segregated account with State Street Bank
and Trust Company (State Street), liquid assets equal in value to the amount
owed.
6. Mortgage, pledge or hypothecate any assets, except in an amount up to
15% of the value of the Fund's net assets, but only to secure borrowings for
temporary or emergency purposes as described in paragraph 5 above.
7. Purchase or sell real estate, real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests.
8. Act as an underwriter of securities.
9. Purchase securities on margin, except for the use of short-term credit
necessary for clearance of purchases or sales of portfolio securities, or make
short sales of securities or maintain a short position.
10. Purchase securities, other than obligations of the U.S. Government, its
agencies or instrumentalities, of any issuer having a record, together with
predecessors, of less than three years of continuous operations if, immediately
after such purchase, more than 5% of the Fund's total assets would be invested
in such securities.
11. Make investments for the purpose of exercising control or management.
12. Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization.
13. The Fund may lend its portfolio securities if such loans are secured
continuously by collateral in cash maintained on a daily basis at an amount at
least equal at all times to the market value of the securities loaned. The Fund
must maintain the right to call such loans and to obtain the securities loaned
at any time on five days' notice. During the existence of a loan, the Fund
continues to receive the equivalent of the interest paid by the issuer on the
securities loaned and also has the right to receive the interest on investment
of the cash collateral in short-term money market instruments. If the management
of the Fund determines to make securities loans, the value of the securities
loaned will not exceed 10% of the value of the Fund's total assets.
Whenever any fundamental investment policy or investment restriction states
a maximum percentage of the Fund's assets, it is intended that if the percentage
limitation is met at the time the action is taken, a later change in percentage
resulting from changing total or net asset values will not be considered a
violation of such policy. However, in the event that the Fund's asset coverage
for borrowings falls below 300%, the Fund will take action within three days to
reduce its borrowings, as required by applicable law.
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MANAGEMENT OF THE FUND
(A) DIRECTORS
The Fund has Directors who, in addition to overseeing the actions of the
Fund's Manager, Subadviser, and Distributor, decide upon matters of general
policy.
The Directors also review the actions of the officers of the Fund, who
conduct and supervise the daily business operations of the Fund.
(B) MANAGEMENT INFORMATION--DIRECTORS AND OFFICERS
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POSITION WITH
NAME, ADDRESS AND AGE (1) THE FUND PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS FOR THE LAST FIVE YEARS
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Delayne Dedrick Gold (61) Director Marketing and Management Consultant.
* Robert F. Gunia (53) Vice President Executive Vice President and Chief Administrative Officer (since
and Director June 1999) of Prudential Investments; Corporate Vice President
(since September 1997) of The Prudential Insurance Company of
America (Prudential); Executive Vice President and Treasurer
(since December 1996) of Prudential Investments Fund Management
LLC (PIFM); President (since April 1999) Prudential Investment
Management Services LLC (PIMS); formerly Senior Vice President
(March 1987-May 1999) of Prudential Securities Incorporated
(Prudential Securities); formerly Chief Administrative Officer
(July 1990-September 1996), Director (January 1989-September
1996), and Executive Vice President, Treasurer and Chief
Financial Officer (June 1987-September 1996) of Prudential
Mutual Fund Management, Inc. (PMF); Vice President and Director
(since May 1989) of The Asia Pacific Fund, Inc.
Robert E. LaBlanc (65) Director President (since 1981) of Robert E. LaBlanc Associates, Inc.
(telecommunications); formerly General Partner at Salomon
Brothers and Vice-Chairman of Continental Telecom; Director of
Storage Technology Corporation, Titan Corporation, Salient 3
Communications, Inc. and Tribune Company; and Trustee of
Manhattan College.
*David R. Odenath, Jr. (42) Director Officer in Charge, President, Chief Executive Officer and Chief
Operating Officer (since June 1999) of PIFM; Senior Vice
President (since June 1999) of Prudential; Senior Vice President
(August 1993-May 1999) of PaineWebber Group, Inc.
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POSITION WITH
NAME, ADDRESS AND AGE (1) THE FUND PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS FOR THE LAST FIVE YEARS
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Robin B. Smith (60) Director Chairman and Chief Executive Officer (since August 1996) of
Publishers Clearing House; formerly President and Chief Executive
Officer (January 1989-August 1996) and President and Chief
Operating Officer (September 1981-December 1988) of Publishers
Clearing House; Director of BellSouth Corporation, Texaco Inc.,
Springs Industries Inc., and Kmart Corporation.
Stephen Stoneburn (56) Director President and Chief Executive Officer (since June 1996) of Quadrant
Media Corp. (publishing); formerly President (June 1995-June
1996) of Argus Integrated Media, Inc.; Senior Vice President and
Managing Director (January 1993-1995) of Cowles Business Media;
Senior Vice President (January 1991-1992) and Publishing Vice
President (May 1989-December 1990) of Gralla Publications (a
division of United Newspapers, U.K.); and Senior Vice President
of Fairchild Publications, Inc.
Chief Executive Officer, Chairman, President and Director (since
*John R. Strangfeld, Jr. (46) President and January 1990) of The Prudential Investment Corporation, Executive
Director Vice President (since February 1998) of Prudential Global Asset
Management Group of Prudential; Chairman (since August 1989) of
Pricoa Capital Group; formerly various positions to Chief
Executive Officer (November 1994-December 1998) of Private
Asset Management Group of Prudential and Senior Vice President
(January 1986-August 1989) of Prudential Capital Group, a unit
of Prudential.
Nancy H. Teeters (69) Director Economist; formerly Director of Inland Steel Industries (July
1991-1999); formerly, Vice President and Chief Economist (March
1986-June 1990) of International Business Machines Corporation;
formerly, Governor of Federal Reserve System (1978-1984).
Clay T. Whitehead (61) Director President (since May 1983) of National Exchange Inc. (new business
development firm).
Robert C. Rosselot (39) Secretary Assistant General Counsel (since September 1997) of PIFM;
formerly, partner with the law firm of Howard & Howard,
Bloomfield Hills, Michigan (December 1995-September 1997) and
Corporate Counsel, Federated Investors (1990-1995).
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B-7
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POSITION WITH
NAME, ADDRESS AND AGE (1) THE FUND PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS FOR THE LAST FIVE YEARS
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Grace C. Torres (40) Treasurer and First Vice President (since December 1996) of PIFM; First Vice
Principal President (since March 1994) of Prudential Securities; formerly
Financial and First Vice President (March 1994-September 1996) of Prudential
Accounting Mutual Fund Management, Inc. and Vice President (July 1989-March
Officer 1994) of Bankers Trust Corporation.
Stephen M. Ungerman (46) Assistant Vice President and Tax Director (since March 1996) of Prudential
Treasurer Investments; formerly First Vice President (February
1993-September 1996) of Prudential Mutual Fund Management, Inc.
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(1) Unless otherwise noted, the address for each of the above persons is c/o
Prudential Investments Fund Management LLC, Gateway Center Three, 100
Mulberry Street, Newark, New Jersey 07102-4077.
* "Interested" Director, as defined in the Investment Company Act, by reason
of his affiliation with Prudential Securities or PIFM.
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.
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.
The Board of Directors has adopted a retirement policy which calls for the
retirement of Directors on December 31 of the year in which they reach the age
of 75.
Pursuant to the Management Agreement with the Fund, the Manager pays all
compensation of officers and employees of the Fund as well as the fees and
expenses of all Directors of the Fund who are affiliated persons of the Manager.
The Fund pays each of its Directors who is not an affiliated person of PIFM
annual compensation of $7,425, in addition to certain out-of-pocket expenses.
Directors who serve on Fund Committees receive additional compensation. The
amount of compensation paid to each Director may change as a result of the
introduction of additional funds upon which the Director will be asked to serve.
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 (the T-Bill rate) 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.
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The following table sets forth the aggregate compensation paid by the Fund
for the fiscal year ended December 31, 1999 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 funds managed by
PIFM (Fund Complex) for the calendar year ended December 31, 1999.
COMPENSATION TABLE
TOTAL 1999
COMPENSATION
FROM FUND
AGGREGATE AND FUND
COMPENSATION COMPLEX PAID
NAME AND POSITION FROM FUND TO DIRECTORS(2)
----------------- ------------- -----------------
Edward D. Beach--Former Director $7,425 $142,500(43/70)*
Delayne D. Gold--Director $7,425 $144,500(43/70)*
Robert F. Gunia (1)--Director -- --
Don G. Hoff--Former Director $2,750 $ 22,500(14/17)*
Robert F. LaBlanc--Director $7,425 $ 61,250(20/39)*
David R. Odenath, Jr. (1) -- --
Robin B. Smith--Director $7,675 $ 96,000(32/44)*
Stephen Stoneburn--Director $7,425 $ 61,250(20/39)*
John R. Strangfeld, Jr. (1) -- --
Nancy H. Teeters--Director $7,900 $ 97,000(25/43)*
Clay T. Whitehead--Director $3,300 $ 77,000(38/66)*
- ----------
* Indicates number of funds/portfolios in Fund Complex (including the Fund)
to which aggregate compensation relates.
(1) Directors who are "interested", do not receive compensation from the Fund
Complex (including the Fund).
(2) Total compensation from all of the funds in the Fund Complex for the
calendar year ended December 31, 1999, including amounts deferred at the
election of Directors under the funds' Deferred Compensation Plans.
Including accrued interest, total deferred compensation amounted to
$156,478 for Robin B. Smith. Currently, Ms. Smith has agreed to defer some
of her fees at the T-Bill rate and other fees at the Fund rate.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 11, 2000, the Directors and officers of the Fund, as a
group, beneficially owned less than 1% of the outstanding shares of Common Stock
of the Fund.
As of February 11, 2000, the beneficial owners, directly or indirectly, of
more than 5% of the outstanding common stock of the Prudential MoneyMart Assets,
Inc. were Pru Defined Contributions SVSC.FBO Pru-Non-Trust Accounts, Att: John
Surdy, 30 Scranton Office Park, Moosic, PA, which held 56,008,371 Class Z shares
(or approximately 22.2% of the outstanding Class Z shares) and Prudential Trust
Company, FBO PRU-DC Trust Accounts, Attn: John Surdy, 30 Scranton Office Park,
Moosic, PA, which held 52,301,181 Class Z shares (or approximately 20.7% of the
outstanding Class Z shares).
As of February 11, 2000, Prudential Securities was the record holder for
other beneficial owners of 112,669,478 Class A shares of the Fund, representing
approximately 1.7% of the Class A shares then outstanding. In the event of any
meetings of shareholders, Prudential Securities will forward, or cause the
forwarding of, proxy materials to the beneficial owners for which it is the
record holder.
INVESTMENT ADVISORY AND OTHER SERVICES
(A) INVESTMENT ADVISER
The manager of the Fund is Prudential Investments Fund Management LLC (PIFM
or the Manager), Gateway Center Three, 100 Mulberry Street, Newark, New Jersey
07102-4077. PIFM serves as manager to all of the other investment companies
that, together with the Fund, comprise the Prudential Mutual Funds. See "How the
Fund is Managed--Manager" in the Prospectus. As of December 31, 1999, PIFM
managed and/or administered open-end and closed-end management investment
companies with assets of approximately $73.5 billion. According to the
Investment Company Institute, as of September 30, 1999, the Prudential Mutual
Funds were the 20th largest family of mutual funds in the United States.
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PIFM is a subsidiary of Prudential Securities Incorporated. Prudential
Mutual Fund Services LLC (PMFS or the Transfer Agent), a wholly-owned subsidiary
of PIFM, serves as the transfer agent and dividend distribution agent for the
Prudential Mutual Funds and, in addition, provides customer service,
recordkeeping and management and administration services to qualified plans.
Pursuant to the Management Agreement with the Fund (the Management
Agreement), PIFM, subject to the supervision of the Fund's Board of Directors
and in conformity with the stated policies of the Fund, manages both the
investment operations of the Fund and the composition of the Fund's portfolio,
including the purchase, retention, disposition and loan of securities and other
assets. In connection therewith, PIFM is obligated to keep certain books and
records of the Fund. PIFM has hired The Prudential Investment Corporation, doing
business as Prudential Investments (PI, the investment adviser or the
Subadviser), to provide subadvisory services to the Fund. PIFM also administers
the Fund's corporate affairs and, in connection therewith, furnishes the Fund
with office facilities, together with those ordinary clerical and bookkeeping
services which are not being furnished by State Street, the Fund's custodian
(the Custodian), and PMFS. The management services of PIFM for the Fund are not
exclusive under the terms of the Management Agreement and PIFM is free to, and
does, render management services to others.
For its services, PIFM receives, pursuant the Management Agreement, a fee
at an annual rate of .50 of 1% of the Fund's average daily net assets up to $50
million and .30 of 1% of the Fund's average daily net assets in excess of $50
million. The fee is computed daily and payable monthly. The Management Agreement
also provides that in the event the expenses of the Fund (including the fees
payable to PIFM, 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 compensation due to PIFM will be reduced by the amount of such excess.
Reductions in excess of the total compensation payable to PIFM will be paid by
PIFM to the Fund. Currently, the Fund believes that there are no such expense
limitations.
In connection with its management of the corporate affairs of the Fund
pursuant to the Management Agreement, PIFM bears the following expenses:
(a) the salaries and expenses of all personnel of PIFM and the Fund,
except the fees and expenses of Directors who are not affiliated persons of
PIFM or the Fund's investment adviser;
(b) all expenses incurred by PIFM or by the Fund in connection with
managing the ordinary course of the Fund's business, other than those
assumed by the Fund, as described below; and
(c) the costs and expenses payable to the investment adviser pursuant
to the subadvisory agreement between PIFM and PI (the Subadvisory
Agreement).
Under the terms of the Management Agreement, the Fund is responsible for
the payment of the following expenses, (a) the fees payable to the Manager, (b)
the fees and expenses of Directors who are not affiliated with PIFM or the
Fund's Subadviser, (c) the fees and certain expenses of the Fund's Custodian and
Transfer Agent, including the cost of providing records to the Manager in
connection with its obligation of maintaining required records of the Fund and
of pricing the Fund's shares, (d) the charges and expenses of the Fund's legal
counsel and independent accountants, (e) brokerage commissions, if any, 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, including the preparation and printing of the Fund's
registration statements and prospectuses for such purposes, and paying the fees
and expenses of notice filings made in accordance with state securities laws,
(k) allocable communications expenses with respect to investor services and all
expenses of shareholders' and 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 PIFM will not be liable for any
error of judgment or for any loss suffered by the Fund in connection with the
matters to which the Management Agreement relates, except a loss resulting from
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 (as defined in the Investment
Company Act), 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
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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.
For the fiscal years ended December 31, 1999, 1998 and 1997, PIFM received
management fees of $19,657,429, $21,115,140 and $21,943,602, respectively.
PIFM has entered into the Subadvisory Agreement with PI, a wholly-owned
subsidiary of Prudential. The Subadvisory Agreement provides that PI furnish
investment advisory services in connection with the management of the Fund. In
connection therewith, PI is obligated to keep certain books and records of the
Fund. PIFM continues to have responsibility for all investment advisory services
pursuant to the Management Agreement and supervises PI's performance of such
services. PI was reimbursed by PIFM for the reasonable costs and expenses
incurred by PI in furnishing services to PIFM. Effective January 1, 2000, PI is
paid by PIFM at an annual rate of .151 of 1% of the Fund's average daily net
assets (representing half of the compensation received from the Fund by PIFM).
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, with a 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 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, PIFM or PI upon not more than 60 days' nor less than 30
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.
(B) PRINCIPAL UNDERWRITER, DISTRIBUTOR AND RULE 12B-1 PLAN
Prudential Investment Management Services LLC (PIMS or the Distributor),
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, acts
as the distributor of the shares of the Fund. As of February 5, 1999, more than
90% of the outstanding voting shares of the Fund were owned by clients of
Prudential Securities Incorporated (Prudential Securities), an affiliate of the
Distributor. The Distributor and Prudential Securities are subsidiaries of
Prudential.
Pursuant to the Distribution Agreement, the Fund has agreed to indemnify
the Distributor to the extent permitted by applicable law against certain
liabilities under the federal securities laws.
DISTRIBUTION AND SERVICE PLAN
Under the Fund's Distribution and Service Plan for the Class A shares (the
Plan) and the Distribution Agreement, the Fund pays the Distributor a
distribution and service fee of up to 0.125% of the average daily net assets of
the Class A shares of the Fund, computed daily and payable monthly. Under the
Plan, the Fund is required to pay the distribution and service fee regardless of
the expenses incurred by the Distributor.
For the fiscal year ended December 31, 1999, the Distributor received
payments of $7,865,039 under the Plan. It is estimated that this amount was
spent on: (i) account servicing fee credits to Prudential Securities branch
offices for payments of account servicing fees to account executives (.77% or
$6,056,080) and (ii) an allocation of overhead and other branch office
distribution-related expenses (.20% or $1,808,959). 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), an affiliated broker-dealer, 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.
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 Plan or in any
agreement relating 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
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<PAGE>
majority of the Rule 12b-1 Directors or by the vote of the holders of a majority
of the outstanding Class A 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 for the services described
therein without shareholder approval, and all material amendments must also 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 be provided with, and will review
at least quarterly, a written report of the distribution expenses incurred on
behalf of the Fund by the Distributor. The report will include 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
the Distributor to the extent permitted by applicable law against certain
liabilities under the Securities Act.
NASD MAXIMUM SALES CHARGE RULE. Pursuant to rules of the NASD, the
Distributor is required to limit aggregate initial sales charges, deferred sales
charges and asset-based sales charges to 6.25% of total gross sales of the
Fund's Class A shares. Interest charges on unreimbursed distribution expenses
equal to the prime rate plus one percent per annum may be added to the 6.25%
limitation. Sales from the reinvestment of dividends and distributions are not
included in the calculation of the 6.25% limitation. The annual asset-based
sales charge on Class A shares of the Fund may not exceed .75 of 1% per class.
The 6.25% limitation applies to Class A shares rather than on a per shareholder
basis. If aggregate sales charges were to exceed 6.25% of the total gross sales
of Class A shares, all sales charges on Class A shares would be suspended.
(C) OTHER SERVICE PROVIDERS
State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities,
and in that capacity maintains cash and certain financial and accounting books
and records pursuant to an agreement with the Fund.
Prudential Mutual Fund Services LLC (PMFS), Raritan Plaza One, Edison, New
Jersey 08837, serves as the Transfer Agent of the Fund. It is a wholly-owned
subsidiary of PIFM. PMFS provides customary transfer agency services to the
Fund, including the handling of shareholder communications, the processing of
shareholder transactions, the maintenance of shareholder account records,
payment of dividends and distributions and related functions. In connection with
services rendered to the Fund, PMFS receives an annual fee ($9.50) per
shareholder account, a new account set up fee ($2.00) for each
manually-established account and a monthly inactive zero balance account fee
($0.20) per shareholder account plus its out-of-pocket expenses, including but
not limited to postage, stationery, printing, allocable communications and other
costs.
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, serves as the Fund's independent accountants and in that capacity audits
the Fund's annual financial statements.
YEAR 2000 READINESS DISCLOSURE
The services provided to the Fund and the shareholders by the Manager, the
Distributor, the Transfer Agent and the Custodian depend on the smooth
functioning of their computer systems and those of outside service providers.
Although the Fund has not experienced any material problems with the services
provided by the Manager, Distributor, Transfer Agent or the Custodian as a
result of the change from 1999 to 2000, there is a possibility that computer
software systems in use might be impaired or unavailable because of the way
dates are encoded and calculated. Such an event could have a negative impact on
handling securities trades, payments of interest and dividends, pricing and
account services. Although, at this time, there can be no assurance that there
will be no future adverse impact on the Fund, the Manager, the Distributor, the
Transfer Agent and the Custodian have advised the Fund that they have completed
necessary changes to their computer systems in connection with the year 2000.
The Funds' service providers (or other securities market participants) may
experience future material problems in connection with the year 2000. The
Company and its Board have instructed the Fund's principal service providers to
monitor and report year 2000 problems.
Additionally, issuers of securities generally, as well as those purchased
by the Fund, may confront year 2000 compliance issues at some later time which,
if material and not resolved, could have an adverse impact on securities markets
and/or a specific issuer's performance and could result in a decline in the
value of the securities held by the Fund.
BROKERAGE ALLOCATION AND OTHER PRACTICES
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
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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 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.
During the fiscal years ended December 31, 1999, 1998 and 1997, the Fund
paid no brokerage commissions.
SECURITIES AND ORGANIZATION
The Fund is authorized to issue 15 billion shares of common stock, $.001
par value per share, divided into two classes, designated Class A and Class Z
common stock. Of the authorized shares of common stock of the Fund, 13 billion
shares consist of Class A shares and 2 billion shares consist of Class Z shares.
Each class represents an interest in the same assets of the Fund and is
identical in all respects except that (i) Class A shares are subject to
distribution and/or service fees, (ii) Class Z shares are not subject to any
distribution and/or service fees, (iii) each class has exclusive voting rights
on any matter submitted to shareholders that relates solely to its arrangement
and has separate voting rights on any matter submitted to shareholders in which
the interests of one class differ from the interests of any other class, (iv)
each class has a different exchange privilege and (v) Class Z shares are offered
exclusively for sale to a limited group of investors. In accordance with the
Fund's Articles of Incorporation, the Board of Directors may authorize the
creation of additional series and classes within such series, with such
preferences, privileges, limitations and voting and dividend rights as the Board
of Directors may determine. The Board of Directors may increase or decrease the
number of authorized shares without approval by shareholders. Shares of the
Fund, when issued, are fully paid, nonassessable, fully transferable and
redeemable at the option of the holder.
The Fund does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold meetings of
shareholders unless, for example, the election of 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% or more
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.
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.
Shares of the Fund may be purchased by investors through the Distributor,
by brokers that have entered its agreements to sell Fund shares, or directly
through Prudential Mutual Fund Services LLC (PMFS). Shares may also be purchased
through Prudential Securities or Pruco Securities Corporation (Prusec).
Prudential Securities clients who hold Fund shares through Prudential Securities
may benefit through administrative conveniences afforded them as Prudential
Securities clients, but may be subject to certain additional restrictions
imposed by Prudential Securities.
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REOPENING AN ACCOUNT
Subject to the minimum investment restrictions, an investor may reopen an
account, without filing a new application form, at any time during the calendar
year the account is closed, provided that the information on the old form is
still applicable.
REDEMPTION OF SHARES
Investors who purchase Class A shares directly from PMFS may use the
following procedures:
CHECK REDEMPTION. At a shareholder's request, State Street will establish a
personal checking account for the shareholder. Checks drawn on this account can
be made payable to the order of any person in any amount equal to or greater
than $500. The payee of the check may cash or deposit it like any other check
drawn on a bank. When such a check is presented to State Street for payment,
State Street presents the check to the Fund as authority to redeem a sufficient
number of shares in a shareholder's account in the Fund to cover the amount of
the check. This enables the shareholder to continue earning daily dividends
until the check is cleared. Canceled checks are returned to the shareholder by
State Street.
Shareholders are subject to State Street's rules and regulations governing
checking accounts, including the right of State Street not to honor checks in
amounts exceeding the value of the shareholder's account at the time the check
is presented for payment.
Shares for which certificates have been issued are not available for
redemption to cover checks. A shareholder should be certain that adequate shares
for which certificates have not been issued are in his or her account to cover
the amount of the check. Also, shares purchased by check are not available to
cover checks until 10 calendar days after receipt of the purchase check by PMFS.
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."
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.
PMFS reserves the right to assess a service charge 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 LLC, 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 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 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 "How to Buy, Sell and Exchange
Shares of the Fund--How to Sell Your Shares" in the Prospectus. The Fund does
not forward redemption proceeds with respect to shares purchased by check until
at least 10 calendar days after receipt of the purchase check by PMFS.
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 LLC, at the
address set forth above.
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 and on the certificates, if any, or stock power must be guaranteed by an
"eligible guarantor institution." An "eligible guarantor institution" includes
any bank, broker, dealer or credit union. The Transfer Agent reserves the right
to request additional information from, and make reasonable inquiries of, any
eligible guarantor institution. Signature guarantees by savings banks, savings
and loan associations and notaries will not be accepted. PMFS may request
further documentation from corporations, executors, administrators, trustees or
guardians. 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.
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REGULAR REDEMPTION. Shareholders may redeem their shares by sending to
PMFS, at the address set forth above, a written request accompanied by duly
endorsed stock certificates, if issued. All written requests for redemption, and
any share certificates, must be endorsed by the shareholder with signature
guaranteed, as described above under "Expedited Redemption." PMFS may request
further documentation from corporations, executors, administrators, trustees or
guardians. Redemption proceeds are sent to a shareholder's address by check.
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 partly in cash, the Fund may pay the redemption price in whole or in part by
a distribution in kind of securities from the investment portfolio of the Fund,
in lieu of cash, in conformity with applicable rules of the SEC. Any such
securities will be readily marketable and will be valued in the same manner as
in a regular redemption. If your shares are redeemed in kind, you would incur
transaction costs in converting the assets into cash. The Fund, however, has
elected to be governed by Rule 18f-1 under the Investment Company Act pursuant
to which the Fund is obligated to redeem shares solely in cash up to the lesser
of $250,000 or 1% of the net asset value of the Fund during any 90-day period
for any one shareholder.
RESTRICTIONS ON SALE
The Fund may suspend the right of redemption or postpone the date of
payment for a period of up to seven days. Suspensions or postponements may not
exceed seven days except (1) for any period (a) during which the New York Stock
Exchange is closed other than customary weekend and holiday closings or (b)
during which trading on the New York Stock Exchange is restricted; (2) for any
period during which an emergency exists as a result of which (a) disposal by the
Fund of securities owned by it is not reasonably practicable or (b) it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets; or (3) for such other periods as the SEC may by order permit for the
protection of shareholders of the Fund. The SEC by rules and regulations
determines the conditions under which (i) trading shall be deemed to be
restricted and (ii) an emergency is deemed to exist within the meaning of clause
(2) above.
NET ASSET VALUE
The Fund's net asset value per share is determined by subtracting its
liabilities from the value of its assets and dividing the remainder by the
number of outstanding shares.
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 investment
adviser under the supervision of the Board of Directors to be of minimal credit
risk and to be of "eligible quality" in accordance with regulations of the SEC.
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 a 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.
The Fund computes its net asset value at 4:30 PM New York time, on each day
the New York Stock Exchange (the Exchange) is open for trading. In the event the
Exchange closes early on any business day, the net asset value of the Fund's
shares shall be determined at a time between such closing and 4:30 PM New York
time. The Exchange is closed on the following holidays: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
TAXES, DIVIDENDS AND DISTRIBUTIONS
The Fund has elected to qualify, and the Fund intends to remain qualified,
as a regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended. This relieves a fund (but not its shareholders) from
paying
B-15
<PAGE>
federal income tax on income which is distributed to shareholders, and, if a
fund did realize long-term capital gains, permits net capital gains 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 that fund.
Qualification as a regulated investment company requires, among other
things, that (a) at least 90% of a fund's annual gross income (without reduction
for losses from the sale or other disposition of securities or foreign
currencies) be derived from interest, dividends, payments with respect to
securities loans, and gains from the sale or other disposition of securities or
options thereon, or other income (including, but not limited to, gains from
options) derived with respect to its business of investing in such securities;
(b) a fund must diversify its holdings so that, at the end of each quarter of
the taxable year, (i) at least 50% of the market value of a fund's assets is
represented by cash, U.S. Government obligations and other securities limited in
respect of any one issuer to an amount not greater than 5% of the market value
of the fund's assets 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 obligations) and (c)
the fund must distribute to its shareholders at least 90% of its net investment
income and net short-term gains (i.e., the excess of net short-term capital
gains over net long-term capital losses) in each year.
Gains or losses on sales of securities by the Fund will be treated as
long-term capital gains or losses if the securities have been held by it for
more than one year. The Fund does not anticipate realizing long-term capital
gains or losses. 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. For purposes of this excise tax, income on which the Fund pays income
tax is treated as distributed. The Fund intends to make timely distributions in
order to avoid this excise tax. For this purpose, dividends declared in October,
November and December payable to shareholders of record on a specified date in
October, November and December and paid in the following January will be treated
as having been received by shareholders on December 31 of the calendar year in
which declared. Under this rule, therefore, a shareholder may be taxed in the
prior year on dividends or distributions actually received in January of the
following year.
It is anticipated that the net asset value per share of the Fund will
remain constant. However, if the net asset value per share fluctuates, a
shareholder may realize gain or loss upon the disposition of a share.
Distributions of net investment income and net short-term gains will be taxable
to the shareholder at ordinary income rates regardless of whether the
shareholder receives such distributions in additional shares or cash. Any gain
or loss realized upon a sale or redemption of shares by a shareholder who is not
a dealer in securities will generally be treated as long-term capital gain or
loss if the shares have been held for more than one year and otherwise as
short-term capital gain or loss. Any such loss, however, although otherwise
treated as short-term capital loss, will be long-term capital loss to the extent
of any capital gain distributions received by the shareholder, if the shares
have been held for six months or less. Furthermore, certain rules may apply
which would limit the ability of the shareholder to recognize any loss if, for
example, the shareholder replaced the shares within 30 days of the disposition
of the shares. 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.
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.
CALCULATION OF YIELD
The Fund will prepare a current quotation of yield daily. 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 shares, but excluding any capital changes, divided by the value
of the account at the beginning of the base period. 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 also may 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.
Effective yield = [(base period return + 1)365/7]-1
B-16
<PAGE>
The yield and effective yield for Class A shares of the Fund based on the 7
days ended December 31, 1999 were 5.37% and 5.49%, respectively. The yield and
effective yield for Class Z shares of the Fund based on 7 days ended December
31, 1999 were 5.49% and 5.62%, respectively.
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 a Fund is
held, but also in changes in the Fund's expenses. Yield does not take into
account any federal or state income taxes.
ADVERTISING. Advertising materials for the Fund may include biographical
information relating to its portfolio manager(s), and may include or refer to
commentary by the Fund's manager(s) concerning investment style, investment
discipline, asset growth, current or past business experience, business
capabilities, political, economic or financial conditions and other matters of
general interest to investors. Advertising materials for the Fund also may
include mention of The Prudential Insurance Company of America, its affiliates
and subsidiaries, and reference the assets, products and services of those
entities.
From time to time, advertising materials for the Fund may include
information concerning retirement and investing for retirement, may refer to the
approximate number of Fund shareholders and may refer to Lipper rankings or
Morningstar ratings, other related analysis supporting those ratings, other
industry publications, business periodicals and market indices. In addition,
advertising materials may reference studies or analyses performed by the Manager
or its affiliates. Advertising materials for sector funds, funds that focus on
market capitalizations, index funds and international/global funds may discuss
the potential benefits and risks of that investment style. Advertising materials
for fixed income funds may discuss the benefits and risks of investing in the
bond market including discussions of credit quality, duration and maturity.
B-17
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL MONEYMART ASSETS, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Bank Notes--9.8%
American Express Centurion Bank(b)
$ 62,000 5.13%, 1/10/00 $ 62,000,000
Comerica Bank N.A.(b)
85,000 6.36125%, 1/13/00 84,975,520
First Union National Bank(b)
86,000 6.44%, 1/10/00 86,000,000
57,000 6.20%, 1/19/00 57,000,000
67,000 5.57%, 1/21/00 67,000,000
First USA Bank
50,000 6.04%, 4/3/00 50,000,000
Key Bank N.A.(b)
7,000 6.24%, 7/17/00 7,002,797
44,000 6.03%, 1/18/00 43,988,283
27,000 6.10%, 3/24/00 26,993,598
South Trust Bank N.A.
34,000 6.03%, 3/6/00 34,000,601
United States Bank N.A.(b)
48,000 6.3725%, 1/19/00 47,984,432
13,000 6.5125%, 1/19/00 12,998,797
75,000 6.41125%, 1/25/00 74,980,313
--------------
654,924,341
- ------------------------------------------------------------
Certificates of Deposit - Domestic--2.4%
Bank One N.A.
100,000 5.47%, 6/2/00 99,987,925
First Tennessee Bank N.A.
59,000 5.85%, 2/29/00 59,000,000
--------------
158,987,925
- ------------------------------------------------------------
Certificates of Deposit - Yankee--10%
Deutsche Bank AG
50,000 5.60%, 6/14/00 49,989,164
200,000 6.075%, 11/24/00 199,871,395
UBS AG
48,000 5.08%, 1/18/00 47,999,354
100,000 5.16%, 2/28/00 99,993,881
$ 47,000 5.29%, 5/18/00 $ 46,989,748
130,000 5.29%, 5/19/00 129,971,437
Westpac Banking Corp.(b)
90,000 6.51375%, 1/4/00 89,948,914
--------------
664,763,893
- ------------------------------------------------------------
Commercial Paper--42.7%
Allianz of America, Inc.
11,000 5.75%, 5/19/00 10,755,785
American General Finance Corp.
15,335 5.93%, 3/10/00 15,160,705
Associates First Capital B.V.
36,000 5.94%, 3/13/00 35,572,320
Banc One Financial Corp.
31,000 5.94%, 3/28/00 30,554,995
76,000 5.95%, 3/28/00 74,907,183
23,000 5.95%, 3/29/00 22,665,478
BankAmerica Corp.
50,000 5.98%, 2/4/00 49,717,611
47,000 5.98%, 2/25/00 46,570,603
Barton Capital Corp.
59,900 6.20%, 1/20/00 59,703,994
94,000 6.05%, 2/25/00 93,131,153
BBL North America Funding Corp.
80,000 5.935%, 3/17/00 78,997,644
Blue Ridge Asset Funding Corp.
45,000 6.75%, 1/20/00 44,839,688
Chase Manhattan Corp.
19,255 4.50%, 1/3/00 19,255,000
55,000 5.76%, 4/28/00 53,961,600
Cregem North America, Inc.
128,000 5.91%, 3/29/00 126,150,826
48,000 5.745%, 4/27/00 47,103,780
CXC, Inc.
110,000 6.98%, 1/13/00 109,744,067
Daimler Chrysler North America(b)
75,000 5.94%, 3/31/00 73,886,250
27,000 6.35675%, 1/6/00 26,982,018
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. B-18
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL MONEYMART ASSETS, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
Commercial Paper (cont'd.)
Diageo Capital PLC
$ 124,100 6.24%, 6/4/00 $ 123,984,531
Eaton Corp.
8,000 7.00%, 1/21/00 7,968,889
Finova Capital Corp.
35,000 6.25%, 3/10/00 34,580,729
Forrestal Funding Master Trust
1999-A
22,242 6.07%, 2/8/00 22,099,491
21,000 6.09%, 2/11/00 20,854,348
7,000 6.05%, 3/7/00 6,922,358
Fortis Funding LLC
34,000 5.91%, 3/31/00 33,497,650
FPL Group Capital, Inc.
488 5.40%, 1/13/00 487,122
GE Capital International Funding
60,000 5.28%, 2/14/00 59,612,800
50,000 5.31%, 2/14/00 49,675,500
General Electric Capital Corp.(b)
70,000 5.41%, 2/14/00 69,537,144
59,000 6.01%, 2/14/00 59,000,000
64,000 5.78%, 2/18/00 63,506,773
4,000 5.75%, 4/20/00 3,929,722
General Electric Capital Services,
Inc.
23,000 5.76%, 3/10/00 22,746,080
General Motors Acceptance Corp.
168,000 5.77%, 3/3/00 166,330,547
Internationale Nederlanden US
Funding Corp.
82,000 5.91%, 3/28/00 80,828,835
30,000 5.91%, 3/30/00 29,561,675
Market Street Funding Corp.
23,000 7.00%, 1/14/00 22,941,861
MCI Worldcom, Inc.
60,000 7.10%, 1/31/00 59,645,000
Merrill Lynch & Co., Inc.
134,000 5.80%, 1/20/00 133,589,811
Morgan Stanley Dean Witter & Co.
$ 38,000 5.13%, 1/3/00 $ 38,000,000
50,000 5.43%, 2/4/00 49,743,583
229,000 5.75%, 5/15/00 224,062,188
Nationwide Building Society
29,000 5.94%, 3/7/00 28,684,190
PNC Funding Corp.
18,000 6.20%, 1/31/00 17,907,000
62,000 5.95%, 3/13/00 61,262,200
Salomon Smith Barney Holdings,
Inc.
50,000 5.73%, 2/10/00 49,681,667
33,000 5.79%, 3/10/00 32,633,783
Santander Finance, Inc.
54,000 5.90%, 2/1/00 53,725,650
55,100 5.98%, 2/4/00 54,788,807
Swedbank, Inc.
21,154 5.93%, 3/31/00 20,840,392
67,000 5.94%, 3/31/00 66,005,050
Wachovia Corp.
50,000 5.85%, 4/3/00 49,244,375
--------------
2,837,540,451
- ------------------------------------------------------------
Time Deposit - Eurodollar--1.0%
Bank of Montreal
64,327 5.00%, 1/3/00 64,327,000
- ------------------------------------------------------------
Other Corporate Obligations--29%
Abbey National Treasury Services
PLC(b)
80,000 6.1525%, 1/24/00 79,973,649
50,000 5.29%, 5/22/00 49,988,779
Associates Corp. of North
America(b)
200,000 6.41025%, 1/31/00 199,931,148
Bank One Corp.
47,000 6.15375%, 2/22/00 47,000,000
Centex Home Mortgage LLC(b)
24,000 6.60125%, 1/20/00 24,000,000
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. B-19
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL MONEYMART ASSETS, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
Other Corporate Obligations (cont'd.)
Citicorp
$ 10,000 6.5125%, 1/3/00 $ 10,000,000
Conseco Finance Vehicle Trust
1999(b)
45,000 6.62125%, 1/18/00 45,000,000
Corporate Asset Funding Co.,
Inc.(b)
129,000 6.57125%, 1/20/00 128,994,423
Ford Motor Credit Co.(b)
120,000 6.0375%, 2/18/00 119,938,903
181,000 6.17375%, 3/30/00 180,867,175
Goldman Sachs Group, LP(b)
370,700 5.72625%, 1/18/00 370,700,000
Restructured Asset Security(b)
132,000 6.55875%, 1/6/00 132,000,000
117,000 6.56875%, 1/10/00 117,000,000
Security Life of Denver Corp.(b)
14,000 6.24625%, 1/12/00 14,000,000
Strategic Money Market Trust(b)
179,000 6.2975%, 1/13/00 179,000,000
25,000 6.56125%, 1/18/00 25,000,000
69,000 6.18125%, 3/15/00 69,000,000
Travelers Insurance Co.(b)
25,000 6.16%, 1/5/00 25,000,000
Variable Funding Capital Corp.(b)
115,000 6.58125%, 1/24/00 115,000,000
--------------
1,932,394,077
- ------------------------------------------------------------
U.S. Agencies - Non-discount--3.0%
Federal Home Loan Bank
44,000 4.90%, 2/11/00 43,995,235
56,000 4.95%, 2/17/00 55,996,142
75,000 5.035%, 2/25/00 74,991,184
Federal National Mortgage
Association
$ 25,000 4.99%, 2/22/00 $ 24,999,466
--------------
199,982,027
- ------------------------------------------------------------
Total Investments--97.9%
(amortized cost $6,512,919,714) 6,512,919,714
Other assets in excess of
liabilities--2.1% 140,195,310
--------------
Net Assets--100% $6,653,115,024
--------------
--------------
</TABLE>
- ---------------
(a) Federal income tax basis for portfolio securities is the same as for
financial reporting purposes.
(b) The maturity date presented for these instruments is the later of the next
date on which the security can be redeemed at par or the next date on which
the rate of interest is adjusted.
The industry classification of portfolio holdings and other assets in excess of
liabilities shown as a percentage of net assets as of December 31, 1999 was as
follows:
<TABLE>
<S> <C>
Commercial Banks..................................... 44.4%
Security Brokers & Dealers........................... 10.1
Asset Backed Securities.............................. 8.9
Bank Holding Company................................. 8.7
Motor Vehicle........................................ 8.5
Short-Term Business Credit........................... 5.4
Federal Credit....................................... 3.7
Personal Credit Institutions......................... 3.5
U.S. Treasury........................................ 3.0
Phone Communication.................................. .9
Life Insurance....................................... .7
Electric Industry.................................... .1
-----
97.9
Other assets in excess of liabilities................ 2.1
-----
100.0%
-----
-----
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. B-20
<PAGE>
Statement of Assets and Liabilities PRUDENTIAL MONEYMART ASSETS, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets December 31, 1999
-----------------
<S> <C>
Investments, at amortized cost which approximates market value.......................................... $ 6,512,919,714
Cash.................................................................................................... 920,722
Receivable for Fund shares sold......................................................................... 202,138,291
Interest receivable..................................................................................... 47,146,679
Deferred expenses and other assets...................................................................... 165,008
-----------------
Total assets......................................................................................... 6,763,290,414
-----------------
Liabilities
Payable for Fund shares reacquired...................................................................... 101,661,450
Accrued expenses........................................................................................ 5,201,657
Management fee payable.................................................................................. 1,655,765
Dividends payable....................................................................................... 1,315,531
Distribution fee payable................................................................................ 340,987
-----------------
Total liabilities.................................................................................... 110,175,390
-----------------
Net Assets.............................................................................................. $ 6,653,115,024
-----------------
-----------------
Net assets were comprised of:
Common Stock, at par ($.001 par value; 15 billion shares authorized for issuance).................... $ 6,653,115
Paid-in capital in excess of par..................................................................... 6,646,461,909
-----------------
Net assets, December 31, 1999........................................................................... $ 6,653,115,024
-----------------
-----------------
Class A:
Net asset value, offering price and redemption price per share
($6,393,585,657 / 6,393,585,657 shares of common stock issued and outstanding).................... $1.00
-----------------
-----------------
Class Z:
Net asset value, offering price and redemption price per share
($259,529,367 / 259,529,367 shares of common stock issued and outstanding)........................ $1.00
-----------------
-----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. B-21
<PAGE>
PRUDENTIAL MONEYMART ASSETS, INC.
Statement of Operations
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Income December 31, 1999
<S> <C>
Income
Interest.............................. $ 343,743,514
-----------------
Expenses
Management fee........................ 19,657,429
Distribution fee--Class A............. 7,865,039
Transfer agent's fees and expenses.... 13,852,000
Reports to shareholders............... 1,500,000
Registration.......................... 455,000
Custodian's fees and expenses......... 200,000
Insurance............................. 105,000
Director's fees and expenses.......... 39,000
Audit fees and expenses............... 35,000
Legal fees and expenses............... 30,000
Miscellaneous......................... 72,765
-----------------
Total expenses..................... 43,811,233
-----------------
Net investment income.................... 299,932,281
-----------------
Net Realized Loss on Investments
Net realized loss on investment
transactions.......................... (75,947)
-----------------
Net Increase in Net Assets
Resulting from Operations................ $ 299,856,334
-----------------
-----------------
</TABLE>
PRUDENTIAL MONEYMART ASSETS, INC.
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended December 31,
in Net Assets 1999 1998
<S> <C> <C>
Operations
Net investment income... $ 299,932,281 $ 346,805,006
Net realized gain (loss)
on investment
transactions......... (75,947) 24,512
---------------- ----------------
Net increase in net
assets resulting from
operations........... 299,856,334 346,829,518
---------------- ----------------
Dividends and distributions
to shareholders (Note 1)
Class A.............. (289,099,677) (336,977,571)
Class Z.............. (10,756,657) (9,851,947)
---------------- ----------------
(299,856,334) (346,829,518)
---------------- ----------------
Fund share transactions
(Note 4)
(At $1.00 per share)
Proceeds from shares
sold................. 32,858,644,444 30,787,213,555
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 284,993,693 329,144,169
Cost of shares
reacquired........... (32,854,846,473) (31,773,032,919)
---------------- ----------------
Net increase (decrease)
in net assets from
Fund share
transactions......... 288,791,664 (656,675,195)
---------------- ----------------
Total increase
(decrease).............. 288,791,664 (656,675,195)
Net Assets
Beginning of year.......... 6,364,323,360 7,020,998,555
---------------- ----------------
End of year................ $ 6,653,115,024 $ 6,364,323,360
---------------- ----------------
---------------- ----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. B-22
<PAGE>
Notes to Financial Statements PRUDENTIAL MONEYMART ASSETS, INC.
- --------------------------------------------------------------------------------
Prudential MoneyMart Assets, Inc. (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 Policies
The following is a summary of significant generally accepted 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 any discount or premium.
Repurchase Agreements: In connection with transactions in repurchase agreements
with U.S. financial institutions, it is the Fund's policy that its custodian or
designated subcustodians, as the case may be under triparty repurchase
agreements, take possession of the underlying collateral securities, the value
of which exceeds the principal amount of the repurchase transaction including
accrued interest. If the seller defaults and the value of the collateral
declines or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of the collateral by the Fund may be delayed or
limited.
Securities Transactions and Net 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. Expenses are recorded on the accrual basis which may require the
use of certain estimates by management. Net investment income of the Fund
consists of interest accrued and discount earned less estimated expenses
applicable to the dividend period. Net investment income (other than
distribution fees), and realized gains or losses, if any, are allocated daily to
each class of shares based upon the relative proportion of net assets of each
class at the beginning of the day.
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 investment income to its
shareholders. Therefore, no federal income tax provision is required.
The cost of portfolio securities for federal income tax purposes is
substantially the same as for financial reporting purposes.
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. Payment of dividends is
made monthly.
- ------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM 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. PIFM 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 PIFM is computed daily and payable monthly, 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 Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'), which acts as the distributor of the Class A and Z shares
of the Fund. The Fund reimburses the distributors for distributing and servicing
the Fund's Class A shares pursuant to the plan of distribution at an annual rate
of .125 of 1% of the average daily net assets of the Class A shares. The Class A
distribution fee is accrued daily and payable monthly. No distribution or
service fees are paid to PIMS as distributor of the Class Z shares of the Fund.
PIFM, PIMS and PIC are indirect, wholly owned subsidiaries of The Prudential
Insurance Company of America.
- --------------------------------------------------------------------------------
B-23
<PAGE>
Notes to Financial Statements PRUDENTIAL MONEYMART ASSETS, INC.
- --------------------------------------------------------------------------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the year ended December 31, 1999,
the Fund incurred fees of approximately $13,153,000 for the services of PMFS. As
of December 31, 1999, approximately $1,083,000 of such fees were due to PMFS.
Transfer agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
- ------------------------------------------------------------
Note 4. Capital
The Fund offers Class A and Class Z shares. Class Z shares are not subject to
any distribution and/or service fees and are offered exclusively for sale to a
limited group of investors.
The Fund has authorized 15 billion shares of common stock, $.001 par value per
share, divided into 13 billion authorized Class A shares and 2 billion
authorized Class Z shares. Of the 6,653,115,024 shares of common stock issued
and outstanding at December 31, 1999, PIFM owned 262 shares and 186 shares of
Class A and Z, respectively.
Transactions in shares of common stock (at $1 net asset value per share) were as
follows:
<TABLE>
<CAPTION>
Year ended Year ended
December 31, December 31,
1999 1998
---------------- ----------------
<S> <C> <C>
Class A
- ---------------------------
Shares sold................ 32,041,675,513 30,236,936,348
Shares issued in
reinvestment of dividends
and distributions........ 274,562,853 319,520,177
Shares reacquired.......... (32,074,696,386) (31,268,059,561)
---------------- ----------------
Net increase (decrease) in
shares outstanding....... 241,541,980 (711,603,036)
---------------- ----------------
---------------- ----------------
<CAPTION>
Class Z
- ---------------------------
<S> <C> <C>
Shares sold................ 816,968,930 550,277,207
Shares issued in
reinvestment of dividends
and distributions........ 10,430,840 9,623,992
Shares reacquired.......... (780,150,080) (504,973,358)
---------------- ----------------
Net increase (decrease) in
shares outstanding....... 47,249,690 54,927,841
---------------- ----------------
---------------- ----------------
</TABLE>
- --------------------------------------------------------------------------------
B-24
<PAGE>
Financial Highlights PRUDENTIAL MONEYMART ASSETS, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class Z
---------------------------------------------------------------------- ---------------------
Year Ended
Year Ended December 31, December 31,
---------------------------------------------------------------------- ---------------------
1999 1998 1997 1996 1995 1999 1998
---------- ---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net
realized gains............... .046 .050 .050 .048 .054 .047 .051
Dividends and distributions to
shareholders................. (.046) (.050) (.050) (.048) (.054) (.047) (.051)
---------- ---------- ---------- ---------- ---------- -------- --------
Net asset value, end of
period...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- ---------- -------- --------
TOTAL RETURN(a)................ 4.69% 5.06% 5.09% 4.97% 5.51% 4.82% 5.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)....................... $6,393,586 $6,152,044 $6,863,647 $7,315,223 $7,221,658 $259,529 $212,280
Average net assets (000)....... $6,292,031 $6,810,377 $7,121,692 $7,326,023 $6,914,520 $227,112 $194,669
Ratios to average net assets:
Expenses, including
distribution fee......... .68% .69% .70% .71% .69% .55% .57%
Expenses, excluding
distribution fee......... .55% .57% .58% .59% .56% .55% .57%
Net investment income....... 4.60% 4.95% 4.97% 4.83% 5.38% 4.74% 5.07%
<CAPTION>
March 1,
1996(b)
Through
December 31,
1997 1996
-------- ------------
<S> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 1.000 $ 1.000
Net investment income and net
realized gains............... .051 .040
Dividends and distributions to
shareholders................. (.051) (.040)
-------- ------------
Net asset value, end of
period...................... $ 1.000 $ 1.000
-------- ------------
-------- ------------
TOTAL RETURN(a)................ 5.22% 4.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)....................... $157,352 $149,212
Average net assets (000)....... $159,508 $121,135
Ratios to average net assets:
Expenses, including
distribution fee......... .58% .59%(c)
Expenses, excluding
distribution fee......... .58% .59%(c)
Net investment income....... 5.10% 4.86%(c)
</TABLE>
- ---------------
(a) 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. Total returns for less than a full year are
not annualized.
(b) Commencement of offering of Class Z shares.
(c) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. B-25
<PAGE>
Report of Independent Accountants PRUDENTIAL MONEYMART ASSETS, INC.
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Prudential MoneyMart Assets, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential MoneyMart Assets, Inc.
(the 'Fund') at December 31, 1999, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the three years in
the period then ended, in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as 'financial statements') are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at December
31, 1999 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above. The accompanying financial highlights for each of
the two years in the period ended December 31, 1996 were audited by other
independent accountants whose report dated February 6, 1997 was unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 14, 2000
- --------------------------------------------------------------------------------
B-26
<PAGE>
APPENDIX
DESCRIPTION OF RATINGS
BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.-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 S&P. 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.
FITCH IBCA-The following summarizes the ratings used by Fitch IBCA for
long-term debt:
"AAA": Highest credit quality. "AAA" ratings denote the lowest
expectation of credit risk. They are assigned only in case of exceptionally
strong capacity for timely payment of financial commitments. This capacity
is highly unlikely to be adversely affected by foreseeable events.
"AA": Very high credit quality. "AA" ratings denote a very low
expectation of credit risk. They indicate very strong capacity for timely
payment of financial commitments. This capacity is not significantly
vulnerable to foreseeable events.
"A": High credit quality. "A" ratings denote a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered strong. This capacity may, nevertheless, be more vulnerable to
changes in circumstances or in economic conditions than is the case for
higher ratings.
"BBB": Good credit quality. "BBB" ratings indicate that there is
currently a low expectation of credit risk. The capacity for timely payment
of financial commitments is considered adequate, but adverse changes in
circumstances and in economic conditions are more likely to impair this
capacity. This is the lowest investment grade category.
"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the "AAA" long-term rating
category or to categories below "CCC".
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 supporting institutions) have a
I-1
<PAGE>
superior ability for repayment of senior short-term debt obligations. Issuers
rated "Prime-2" (or supporting institutions) have a strong ability for repayment
of senior short-term debt obligations. Issuers rated "Prime-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.
D-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.
D-1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.
D-1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
D-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.
D-3: Satisfactory liquidity and other protection factors qualify issue as
to investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payment is expected.
The following summarizes the ratings used by Fitch IBCA for short-term
debt, which apply to most obligations with maturities of less than 12 months, or
up to three years for U.S. public finance securities:
"F1": Highest credit quality. Indicates the strongest capacity for
timely payment of financial commitments; may have an added "+" to denote
any exceptionally strong credit feature.
"F2": Good credit quality. A satisfactory capacity for timely payment
of financial commitments, but the margin of safety is not as great as in
the case of the higher ratings.
"F3": Fair credit quality. The capacity for timely payment of
financial commitments is adequate, however, near-term adverse changes could
result in a reduction to non-investment grade.
"B": Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial
and economic conditions.
"C": High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.
"D": Default. Denotes actual or imminent payment default.
"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to short-term ratings other than
"F1".
I-2
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Articles of Restatement of Articles of Incorporation,
incorporated by reference to Exhibit 1 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(b) By-Laws, incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(c) (i) Form of stock certificate, incorporated by reference to
Exhibit 4(a) to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 27, 1997.
(ii) Instruments defining rights of shareholders incorporated by
reference to Exhibits a and b.
(d) (i) Management Agreement between the Registrant and Prudential
Mutual Fund Management, incorporated by reference to Exhibit 5(a)
to Post-Effective Amendment No. 33 to the Registration Statement
on Form N-1A (2-55301) filed via EDGAR on February 27, 1997.
(ii) Subadvisory Agreement between Prudential Mutual Fund
Management and The Prudential Investment Corporation,
incorporated by reference to Exhibit 5(b) to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(iii) Amendment to Subadvisory Agreement between Prudential
Investments Fund Management LLC and The Prudential Investment
Corporation.*
(e) (i) Distribution Agreement, incorporated by reference to Exhibit
6 to Post-Effective Amendment No. 33 to the Registration
Statement on Form N-1A (2-55301) filed via EDGAR on February 27,
1997.
(ii) Distribution Agreement between the Registrant and Prudential
Investment Management Service LLC.*
(iii) Form of Dealer Agreement.*
(f) Not applicable.
(g) Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit 8 to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(h) Transfer Agency and Service Agreement, incorporated by reference
to Exhibit 9 to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 27, 1997.
(i) Opinion and Consent of Gardner, Carton & Douglas regarding
legality of the securities being registered, incorporated by
reference to Exhibit 10(b) to Post-Effective Amendment No. 27 to
the Registration Statement on Form N-1A (2-55301), filed via
EDGAR on December 31, 1998.
(j) Consent of Independent Accountants.*
(k) Not applicable.
(l) Not applicable.
(m) (i) Distribution and Service Plan of Registrant incorporated by
reference to Exhibit No. 15(b) to Post-Effective Amendment No. 28
on Form N-1A (2-55301) filed via EDGAR on February 17, 1994.
(ii) Amended and Restated Distribution and Service Plan of
Registrant.*
(n) Rule 18f-3 Plan, incorporated by reference to Exhibit No. 18 to
Post-Effective Amendment No. 30 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on October 31, 1995.
- ----------
* Filed herewith
C-1
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 25. INDEMNIFICATION.
As permitted by Sections 17(h) and 17(i) of the Investment Company Act of
1940, as amended (the 1940 Act) and pursuant to Article X of the Registrant's
By-Laws (Exhibit (b) 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 1940 Act, pursuant to Section 9 of the
Distribution Agreements (Exhibit (e) to the Registration Statement), the
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, as amended (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 of 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 (d)(i) to the Registration
Statement) limits the liability of Prudential Investments Fund Management LLC
(PIFM) 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 PIFM of its obligations and duties under the Management Agreement. Section 4
of the Subadvisory Agreement (Exhibit (d)(ii) 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 1940 Act so long as the interpretation of Sections 17(h)
and 17(i) of such Act remains in effect and is consistently applied.
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 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER (i) Prudential
Investments Fund Management LLC (PIFM).
See "How the Fund is Managed--Manager" in the Prospectus constituting Part
A of this Post-Effective Amendment to the Registration Statement and "Investment
Advisory and Other Services--Investment Adviser" in the Statement of Additional
Information constituting Part B of this Post-Effective Amendment to the
Registration Statement.
The business and other connections of directors and officers of PIFM are
listed in Schedules A and D of Form ADV of PIFM as currently on file with the
Commission, the text of which is hereby incorporated by reference (File No.
801-31104).
The business and other connections of the directors and officers of PIFM
are set forth below. Except as otherwise indicated, the address of each person
is Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.
C-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PIFM PRINCIPAL OCCUPATIONS
- ---------------- ------------------ ---------------------
<S> <C> <C>
Robert F. Gunia Executive Vice President Executive Vice President and Chief Administrative Officer,
and Chief Administrative PIFM; Vice President, Prudential; President, Prudential
Officer Investment Management Services LLC (PIMS)
William V. Healey Executive Vice Executive Vice President, Chief Legal Officer and
President, Chief Legal Secretary, PIFM; Vice President and Associate General
Officer and Secretary Counsel, Prudential; Senior Vice President, Chief Legal
Officer and Secretary, PIMS
Brian W. Henderson Executive Vice President Executive Vice President, PIFM; Senior Vice President and
Chief Operating Officer, PIMS
David R. Odenath, Jr. Officer in Charge, Officer in Charge, President, Chief Executive Officer and
President, Chief Chief Operating Officer, PIFM; Senior Vice President,
Executive Officer and The Prudential Insurance Company of America (Prudential)
Chief Operating Officer
Stephen Pelletier Executive Vice President Executive Vice President, PIFM
Judy A. Rice Executive Vice President Executive Vice President, PIFM
Lynn M. Waldvogel Executive Vice President Executive Vice President, PIFM
</TABLE>
(ii) The Prudential Investment Corporation (PIC).
See "How the Fund is Managed--Manager" in the Prospectus constituting Part
A of this Post-Effective Amendment to the Registration Statement and "Investment
Advisory and Other Services--Investment Adviser" in the Statement of Additional
Information constituting Part B of this Registration Statement.
The business and other connections of PIC's directors and executive
officers are as set forth below. Except as otherwise indicated, the address of
each person is Prudential Plaza, Newark, NJ 07102-4077.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PIC PRINCIPAL OCCUPATIONS
- ---------------- ----------------- ---------------------
<S> <C> <C>
Jeffrey Hiller Chief Compliance Officer Chief Compliance Officer, Prudential Global Asset Management
John R. Strangfeld, Jr. Chairman of the Board, President of Prudential Global Asset Management Group of
President, Chief Prudential; Senior Vice President, Prudential; Chairman
Executive Officer and of the Board, President, Chief Executive Officer and
Director Director, PIC
Bernard Winograd Senior Vice President Chief Executive Officer, Prudential Real Estate Investors;
and Director Senior Vice President and Director, PIC
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Prudential Investment Management Series LLC.
Prudential Investment Management Series LLC is distributor for Prudential
Government Securities Trust, The Target Portfolio Trust, Cash Accumulation
Trust, COMMAND Government Fund, COMMAND Money Fund, COMMAND Tax-Free Fund,
Global Utility Fund, Inc., Nicholas-Applegate Fund, Inc. (Nicholas-Applegate
Growth Equity Fund), Prudential Balanced Fund, Prudential California Municipal
Fund, Prudential Developing Markets Fund, Prudential Diversified Bond Fund,
Inc., Prudential Diversified Funds, Prudential Emerging Growth Fund, Inc.,
Prudential Equity Fund, Inc., Prudential Equity Income Fund, Prudential Europe
Growth Fund, Inc., Prudential Global Genesis Fund, Inc., Prudential Global Total
Return Fund, Inc., Prudential High Yield Fund, Inc., Prudential Index Series
Fund, Prudential MoneyMart Assets Inc., Prudential Natural Resources Fund, Inc.,
Prudential Government Income Fund, Inc., Prudential High Yield Total Return
Fund, Inc., Prudential International Bond Fund, Inc., Prudential Institutional
Liquidity Portfolio, Inc., The Prudential Investment Portfolios, Inc.,
Prudential Mid-Cap Value Fund, Prudential Municipal Bond Fund, Prudential
Municipal Series Fund, Prudential National Municipals Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Real Estate Securities Fund, Prudential
Sector Funds, Inc., Prudential Small-Cap Quantum Fund, Inc., Prudential Small
Company Value Fund, Inc., Prudential Special Money Market Fund, Inc., Prudential
Structured Maturity Fund, Inc., Prudential Tax-Free Money Fund, Inc., Prudential
Tax-Managed Funds, Prudential 20/20 Focus Fund, Prudential World Fund, Inc. and
Target Funds.
C-3
<PAGE>
(b) Information concerning officers of Prudential Investment Management
Services LLC is set forth below.
<TABLE>
<CAPTION>
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME(1) UNDERWRITER REGISTRANT
- ---- ------------- --------------
<S> <C> <C>
Margaret Deverell Vice President and Chief Financial Officer None
Kevin Frawley Senior Vice President and Compliance Officer None
Robert F. Gunia President Vice President and Director
William V. Healey Senior Vice President, Secretary and None
Chief Legal Officer
Brian W. Henderson Senior Vice President and Officer None
John R. Strangfeld, Jr. Advisory Board Member President and Director
</TABLE>
(1) The address of each person named is Prudential Plaza, 751 Broad Street,
Newark, New Jersey 07102, unless otherwise indicated.
(c) Registrant has no principal underwriter who is not an affiliated person
of the Registrant.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder are maintained at the
offices of State Street Bank and Trust Company, One Heritage Drive, North
Quincy, Massachusetts 02171, The Prudential Investment Corporation, Prudential
Plaza, 745 Broad Street, Newark, New Jersey 07102, the Registrant, Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, and Prudential
Mutual Fund Services LLC, Raritan Plaza One, Edison, New Jersey 08837. Documents
required by Rules 31a-1(b) (4), (5), (6), (7), (9), (10) and (11) and 31a-1 (d)
and (f) will be kept at Gateway Center Three, Newark, New Jersey 07102-4077, and
the remaining accounts, books and other documents required by such other
pertinent provisions of Section 31(a) and the Rules promulgated thereunder will
be kept by State Street Bank and Trust Company and Prudential Mutual Fund
Services LLC.
ITEM 29. 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 caption "Investment Advisory and Other Services" in the Statement of
Additional Information, constituting Parts A and B, respectively, of this
Post-Effective Amendment to the Registration Statement, Registrant is not a
party to any management-related service contract.
ITEM 30. UNDERTAKINGS
Not applicable.
C-4
<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 under Rule 485(b) of the Securities Act 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
Newark, and State of New Jersey, on the 28th day of February, 2000.
PRUDENTIAL MONEYMART ASSETS, INC.
/s/ John R. Strangfeld, Jr.
------------------------------------
(JOHN R. STRANGFELD, JR., 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/ Delayne D. Gold Director February 28, 2000
- --------------------------------
DELAYNE D. GOLD
/s/ Robert F. Gunia Vice President and Director February 28, 2000
- --------------------------------
ROBERT F. GUNIA
/s/ Robert E. LaBlanc Director February 28, 2000
- --------------------------------
ROBERT E. LABLANC
/s/ David R. Odenath, Jr. Director February 28, 2000
- --------------------------------
DAVID R. ODENATH, JR.
/s/ Robin B. Smith Director February 28, 2000
- --------------------------------
ROBIN B. SMITH
/s/ Stephen Stoneburn Director February 28, 2000
- --------------------------------
STEPHEN STONEBURN
/s/ John R. Strangfeld Director and President February 28, 2000
- --------------------------------
JOHN R. STRANGFELD
/s/ Nancy H. Teeters Director February 28, 2000
- --------------------------------
NANCY H. TEETERS
/s/ Clay T. Whitehead Director February 28, 2000
- --------------------------------
CLAY T. WHITEHEAD
/s/ Grace C. Torres Treasurer, Principal Financial and February 28, 2000
- -------------------------------- Accounting Officer
GRACE C. TORRES
</TABLE>
<PAGE>
EXHIBIT INDEX
(a) Articles of Restatement of Articles of Incorporation, incorporated by
reference to Exhibit 1 to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A (2-55301) filed via EDGAR on February
27, 1997.
(b) By-Laws, incorporated by reference to Exhibit 2 to Post-Effective Amendment
No. 33 to the Registration Statement on Form N-1A (2-55301) filed via EDGAR
on February 27, 1997.
(c) (i) Form of stock certificate, incorporated by reference to Exhibit 4(a) to
Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997. (ii) Instruments defining
rights of shareholders incorporated by reference to Exhibits a and b.
(d) (i) Management Agreement between the Registrant and Prudential Mutual Fund
Management, incorporated by reference to Exhibit 5(a) to Post-Effective
Amendment No. 33 to the Registration Statement on Form N-1A (2-55301) filed
via EDGAR on February 27, 1997.
(ii) Subadvisory Agreement between Prudential Mutual Fund Management and
The Prudential Investment Corporation, incorporated by reference to Exhibit
5(b) to Post-Effective Amendment No. 33 to the Registration Statement on
Form N-1A (2-55301) filed via EDGAR on February 27, 1997.
(iii) Amendment to Subadvisory Agreement between Prudential Investments
Fund Management LLC and The Prudential Investment Corporation.*
(e) (i) Distribution Agreement, incorporated by reference to Exhibit 6 to
Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A
(2-55301) filed via EDGAR on February 27, 1997.
(ii) Distribution Agreement between the Registrant and Prudential
Investment Management Services LLC.*
(iii) Form of Dealer Agreement.*
(f) Not applicable.
(g) (i) Custodian Contract with State Street Bank and Trust Company,
incorporated by reference to Exhibit 8 to Post-Effective Amendment No. 33
to the Registration Statement on Form N-1A (2-55301) filed via EDGAR on
February 27, 1997.
(h) Transfer Agency and Service Agreement, incorporated by reference to Exhibit
9 to Post-Effective Amendment No. 33 to the Registration Statement on Form
N-1A (2-55301) filed via EDGAR on February 27, 1997.
(i) Opinion and Consent of Gardner, Carton & Douglas regarding legality of the
securities being registered, incorporated by reference to Exhibit 10(b) to
Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A
(2-55301), filed via EDGAR on December 31, 1998.
(j) Consent of Independent Accountants.*
(k) Not applicable.
(l) Not applicable.
(m) (i) Distribution and Service Plan of Registrant incorporated by reference
to Exhibit No. 15(b) to Post-Effective Amendment No. 28 on Form N-1A
(2-55301) filed via EDGAR on February 17, 1994.
(ii) Amended and Restated Distribution and Service Plan of Registrant.*
(n) Rule 18f-3 Plan, incorporated by reference to Exhibit No. 18 to
Post-Effective Amendment No. 30 to the Registration Statement on Form N-1A
2-55301 filed via EDGAR on October 31, 1995.
- ----------
* Filed herewith.
AMENDMENT TO SUBADVISORY AGREEMENT
PRUDENTIAL MONEYMART ASSETS, INC.
AMENDMENT made as of this 1st day of January, 2000, between Prudential
Investments Fund Management LLC ("PIFM"), and The Prudential Investment
Corporation ("PIC").
WHEREAS, PIFM, either itself or as successor to Prudential Investments Fund
Management, Inc., and PIC have entered into a Subadvisory Agreement (the
"Agreement") dated May 2, 1988, with respect to the management of Prudential
MoneyMart Assets, Inc. (the "Fund"); and
WHEREAS, the Agreement provides that PIC shall provide investment advisory
services to the Fund, subject to oversight by PIFM; and
WHEREAS, PIFM and PIC desire to amend the Agreement with respect to the
compensation to be paid by PIFM to PIC for services provided by PIC pursuant to
the Agreement.
NOW, THEREFORE, for and in consideration of the continuation of the
Agreement for its current term, and other good and valuable consideration, PIFM
and PIC hereby amend the Agreement to provide for the compensation to be paid by
PIFM to PIC as described on the attached schedule, effective as of January 1,
2000, for the same term, including renewals, as the Agreement and upon the same
terms and conditions as described in the Agreement.
IN WITNESS WHEREOF, PIMS and PIC have signed this Amendment as of the day
and year first above written.
PRUDENTIAL INVESTMENTS THE PRUDENTIAL INVESTMENT
FUND MANAGEMENT LLC CORPORATION
By: /s/Robert F. Gunia By: /s/ John R. Strangfeld, Jr.
--------------------------- --------------------------------
Name: Robert F. Gunia Name: John R. Strangfeld, Jr.
------------------------- ------------------------------
Title: Executive Vice President Title: Chief Executive Officer
------------------------ -----------------------------
<PAGE>
COMPENSATION SCHEDULE
<TABLE>
<CAPTION>
Fund Name Contractual Compensation
Mgmt Fee to PGAM
Domestic Equity
- ------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
<S> <C> <C>
Prudential 20/20 Focus Fund* 0.75% 0.375%
Prudential Balanced Fund 0.65% 0.325%
Prudential Developing Markets Fund -Developing Markets Equity Fund 1.25% 0.625%
Prudential Developing Markets Fund -Latin America Equity Fund 1.25% 0.625%
Prudential Diversified Conservative Growth Fund* 0.75% 0.375%
Prudential Diversified Moderate Growth Fund* 0.75% 0.375%
Prudential Diversified High Growth Fund* 0.75% 0.375%
Prudential Distressed Securities Fund, Inc. 0.75% 0.375%
Prudential Emerging Growth Fund, Inc. 0.60% 0.300%
Prudential Equity Fund, Inc. .50% to $500 mil 0.250%
.475% next $500 mil 0.226%
.45% over 1 bil 0.203%
Prudential Equity Income Fund .60% to $500 mil 0.300%
.50% next $500 mil 0.238%
.475% next $500 mil 0.214%
.45% over 1.5 bil 0.191%
Prudential Bond Market Index Fund 0.25% 0.125%
Prudential Europe Index Fund 0.40% 0.200%
Prudential Pacific Index Fund 0.40% 0.200%
Prudential Small Cap Index Fund 0.30% 0.195%
Prudential Stock Index Fund 0.30% 0.150%
Prudential Active Balanced Fund 0.65% 0.325%
Prudential Mid-Cap Value Fund 0.70% 0.350%
Prudential Natural Resources Fund 0.75% 0.375%
Prudential Real Estate Securities Fund 0.75% .45% to $250 mil
.40% next $250 mil
.35% next $250 mil
.30% over $750 mil
Prudential Financial Services Fund 0.75% 0.375%
Prudential Health Sciences Fund* 0.75% 0.375%
Prudential Technology Fund 0.75% 0.375%
Prudential Utility Fund .60% to $250 mil 0.300%
.50% next $500 mil 0.238%
.45% next $750 mil 0.203%
.40% next $500 mil 0.170%
.35% next $2 bil 0.140%
.325% next $2 bil 0.122%
.30% over $6 bil 0.105%
Prudential Small-Cap Quantum Fund, Inc. 0.60% 0.390%
Prudential Small Company Value Fund, Inc. 0.70% 0.455%
Prudential Tax-Managed Equity Fund 0.65% 0.325%
Prudential World Fund, Inc., Global Series 0.75% 0.375%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fund Name Contractual Compensation
Mgmt Fee to PGAM
Domestic Equity
- ------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
<S> <C> <C>
Prudential Europe Growth Fund 0.75% 0.375%
Prudential Global Genesis Fund 1.00% 0.500%
Prudential Pacific Growth Fund 0.75% 0.375%
TAXABLE FIXED INCOME FUNDS
Prudential Diversified Bond Fund, Inc. 0.50% 0.250%
Prudential Global Limited Maturity Fund, Inc. 0.55% 0.275%
Prudential Government Income Fund, Inc. .50% to $3 bil 0.250%
.35% over $3 bil 0.166%
Prudential Government Securities Trust Short Intermediate Term Series 0.40% 0.200%
The High Yield Income Fund, Inc. 0.70% 0.350%
Prudential High Yield Fund, Inc. .50% to $250 mil 0.250%
.475% next $500 mil 0.226%
.45% next $750 mil 0.203%
.425% next $500 mil 0.181%
.40% next $500 mil 0.160%
.375% next $500 mil 0.141%
.35% over $3 bil 0.123%
Prudential High Yield Total Return Fund, Inc. 0.65% 0.325%
Prudential Intermediate Global Income Fund, Inc. 0.75% 0.375%
Prudential International Bond Fund, Inc., .75% to 1 bil 0.375%
.70% over 1 bil 0.333%
Prudential Structured Maturity Fund, Inc. 0.40% 0.200%
Prudential Global Total Return Fund, Inc. .75% to $500 mil 0.375%
.70% next $500 mil 0.333%
.65% over $1 bil 0.293%
TAX-EXEMPT FIXED INCOME FUNDS
Prudential California Municipal Fund - California Series 0.50% 0.250%
Prudential California Municipal Fund - California Income 0.50% 0.250%
Prudential National Municipals Fund, Inc. .50% to $250 mil 0.250%
.475% next $250 mil 0.226%
.45% next $500 mil 0.203%
.425% next $250 mil 0.181%
.40% next $250 mil 0.160%
.375% over $1.5 bil 0.141%
Prudential Municipal Bond Fund - High Income Series .50% to 1 bil 0.250%
.45% over 1 bil 0.214%
Prudential Municipal Bond Fund - Insured Series .50% to 1 bil 0.250%
.45% over 1 bil 0.214%
Prudential Municipal Series Fund - Florida Series 0.50% 0.250%
Prudential Municipal Series Fund - Massachusetts Series 0.50% 0.250%
Prudential Municipal Series Fund - New Jersey Series 0.50% 0.250%
Prudential Municipal Series Fund - New York Series 0.50% 0.250%
Prudential Municipal Series Fund - North Carolina Series 0.50% 0.250%
Prudential Municipal Series Fund - Ohio Series 0.50% 0.250%
Prudential Municipal Series Fund - Pennsylvania Series 0.50% 0.250%
MONEY MARKET FUNDS
Command Money Fund .50% to $500 mil 0.250%
.425% next $500 mil 0.191%
.375% next $500 mil 0.150%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fund Name Contractual Compensation
Mgmt Fee to PGAM
Domestic Equity
- ------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
<S> <C> <C>
.35% over $1.5 bil 0.123%
Command Government Money Market Fund .40% to $1 bil 0.200%
.375% over $1 bil 0.169%
Command Tax-Free Fund .50% to $500 mil 0.250%
.425% next $500 mil 0.191%
.375% over $1bil 0.150%
Prudential Government Securities Trust - Money Market Series .40% to $1 bil 0.200%
.375% next $500 mil 0.169%
.35% over $1.5 bil 0.140%
Prudential Government Securities Trust - U.S. Treasury Money Market Series 0.40% 0.200%
Prudential Institutional Liquidity Portfolio, Inc. 0.20% 0.100%
Prudential Tax-Free Money Market Fund, Inc. .50% to $750 mil 0.250%
.425% next $750 mil 0.191%
.375% over $1.5 bil 0.150%
Prudential California Municipal Fund - California Money Market Series 0.50% 0.250%
Prudential MoneyMart Assets, Inc. Fund .50% to $50 mil 0.250%
.30% over $50 mil 0.135%
Prudential Municipal Series Fund - Connecticut Money Market Series 0.50% 0.250%
Prudential Municipal Series Fund - Massachusetts Money Market Series 0.50% 0.250%
Prudential Municipal Series Fund - New Jersey Money Market Series 0.50% 0.250%
Prudential Municipal Series Fund - New York Money Market Series 0.50% 0.250%
Prudential Special Money Fund - Money Market Series 0.50% 0.250%
Cash Accumulated Trust Fund: Liquid Assets 0.07% 0.035%
Cash Accumulated Trust Fund: National Money Market .39% to $1 bil 0.195%
.375% next $500 mil 0.169%
.35% next $500 mil 0.140%
.325% over $2 bil 0.114%
</TABLE>
* Compensation to PGAM based on Prudential advised assets only.
PRUDENTIAL MONEYMART ASSETS, INC.
Distribution Agreement
Agreement made as of June 1, 1998, between Prudential MoneyMart Assets,
Inc. (the Fund), and Prudential Investment Management Services LLC, a Delaware
limited liability company (the Distributor).
WITNESSETH
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the Investment Company Act), as a diversified, open-end, management
investment company and it is in the interest of the Fund to offer its shares for
sale continuously;
WHEREAS, the shares of the Fund may be divided into classes and/or series
(all such shares being referred to herein as Shares) and the Fund currently is
authorized to offer Class A and Class Z Shares;
WHEREAS, the Distributor is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, and is engaged in the business of selling
shares of registered investment companies either directly or through other
broker-dealers;
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other, with respect to the continuous offering of the Fund's Shares from
and after the date hereof in order to promote the growth of the Fund and
facilitate the distribution of its Shares; and
WHEREAS, the Fund has adopted a plan (or plans) of distribution pursuant to
Rule 12b-1 under the Investment Company Act with respect to certain of its
classes and/or series of Shares (the Plans) authorizing payments by the Fund to
the Distributor with respect to the distribution of such classes and/or series
of Shares and the maintenance of related shareholder accounts.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor
The Fund hereby appoints the Distributor as the principal underwriter and
distributor of the Shares of the Fund to sell Shares to the public on behalf of
the Fund and the Distributor hereby accepts such appointment and agrees to act
hereunder. The Fund hereby agrees during the term of this Agreement to sell
Shares of the Fund through the Distributor on the terms and conditions set forth
below.
<PAGE>
Section 2. Exclusive Nature of Duties
Except with respect to a period of time (not to exceed 60 days) during
which the Distributor and Prudential Securities Incorporated will serve as
co-distributors of the Fund in the transition of distribution services from
Prudential Securities Incorporated to the Distributor, the Distributor shall be
the exclusive representative of the Fund to act as principal underwriter and
distributor of the Fund's Shares, provided that:
2.1 The exclusive rights granted to the Distributor to sell Shares of the
Fund shall not apply to Shares of the Fund issued in connection with the merger
or consolidation of any other investment company or personal holding company
with the Fund or the acquisition by purchase or otherwise of all (or
substantially all) the assets or the outstanding shares of any such company by
the Fund.
2.2 Such exclusive rights shall not apply to Shares issued by the Fund
pursuant to reinvestment of dividends or capital gains distributions or through
the exercise of any conversion feature or exchange privilege.
2.3 Such exclusive rights shall not apply to Shares issued by the Fund
pursuant to the reinstatement privilege afforded redeeming shareholders.
2.4 Such exclusive rights shall not apply to purchases made through the
Fund's transfer and dividend disbursing agent in the manner set forth in the
currently effective Prospectus of the Fund. The term "Prospectus" shall mean the
Prospectus and Statement of Additional Information included as part of the
Fund's Registration Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time, and the term
"Registration Statement" shall mean the Registration Statement filed by the Fund
with the Securities and Exchange Commission and effective under the Securities
Act of 1933, as amended (Securities Act), and the Investment Company Act, as
such Registration Statement is amended from time to time.
Section 3. Purchase of Shares from the Fund
3.1 The Distributor shall have the right to buy from the Fund on behalf of
investors the Shares needed, but not more than the Shares needed (except for
clerical errors in transmission) to fill unconditional orders for Shares placed
with the Distributor by investors or registered and qualified securities dealers
and other financial institutions (selected dealers).
3.2 The Shares shall be sold by the Distributor on behalf of the Fund and
2
<PAGE>
delivered by the Distributor or selected dealers, as described in Section 6.4
hereof, to investors at the offering price as set forth in the Prospectus.
3.3 The Fund shall have the right to suspend the sale of any or all classes
and/or series of its Shares at times when redemption is suspended pursuant to
the conditions in Section 4.3 hereof or at such other times as may be determined
by the Board. The Fund shall also have the right to suspend the sale of any or
all classes and/or series of its Shares if a banking moratorium shall have been
declared by federal or New Jersey authorities.
3.4 The Fund, or any agent of the Fund designated in writing by the Fund,
shall be promptly advised of all purchase orders for Shares received by the
Distributor. Any order may be rejected by the Fund; provided, however, that the
Fund will not arbitrarily or without reasonable cause refuse to accept or
confirm orders for the purchase of Shares. The Fund (or its agent) will confirm
orders upon their receipt, will make appropriate book entries and upon receipt
by the Fund (or its agent) of payment therefor, will deliver deposit receipts
for such Shares pursuant to the instructions of the Distributor. Payment shall
be made to the Fund in New York Clearing House funds or federal funds. The
Distributor agrees to cause such payment and such instructions to be delivered
promptly to the Fund (or its agent).
Section 4. Repurchase or Redemption of Shares by the Fund
4.1 Any of the outstanding Shares may be tendered for redemption at any
time, and the Fund agrees to repurchase or redeem the Shares so tendered in
accordance with its Declaration of Trust as amended from time to time, and in
accordance with the applicable provisions of the Prospectus. The price to be
paid to redeem or repurchase the Shares shall be equal to the net asset value
determined as set forth in the Prospectus. All payments by the Fund hereunder
shall be made in the manner set forth in Section 4.2 below.
4.2 The Fund shall pay the total amount of the redemption price as defined
in the above paragraph pursuant to the instructions of the Distributor on or
before the seventh day subsequent to its having received the notice of
redemption in proper form. The proceeds of any redemption of Shares shall be
paid by the Fund as follows: (i) in the case of Shares subject to a contingent
deferred sales charge, any applicable contingent deferred sales charge shall be
paid to the Distributor, and the balance shall be paid to or for the account of
the redeeming shareholder, in each case in accordance with applicable provisions
of the Prospectus; and (ii) in the case of all other Shares, proceeds shall be
paid to or for the account of the redeeming shareholder, in each case in
accordance with applicable provisions of the Prospectus.
4.3 Redemption of any class and/or series of Shares or payment may be
3
<PAGE>
suspended at times when the New York Stock Exchange is closed for other than
customary weekends and holidays, when trading on said Exchange is restricted,
when an emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably practicable
for the Fund fairly to determine the value of its net assets, or during any
other period when the Securities and Exchange Commission, by order, so permits.
Section 5. Duties of the Fund
5.1 Subject to the possible suspension of the sale of Shares as provided
herein, the Fund agrees to sell its Shares so long as it has Shares of the
respective class and/or series available.
5.2 The Fund shall furnish the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares, and this shall
include one certified copy, upon request by the Distributor, of all financial
statements prepared for the Fund by independent public accountants. The Fund
shall make available to the Distributor such number of copies of its Prospectus
and annual and interim reports as the Distributor shall reasonably request.
5.3 The Fund shall take, from time to time, but subject to the necessary
approval of the Board and the shareholders, all necessary action to fix the
number of authorized Shares and such steps as may be necessary to register the
same under the Securities Act, to the end that there will be available for sale
such number of Shares as the Distributor reasonably may expect to sell. The Fund
agrees to file from time to time such amendments, reports and other documents as
may be necessary in order that there will be no untrue statement of a material
fact in the Registration Statement, or necessary in order that there will be no
omission to state a material fact in the Registration Statement which omission
would make the statements therein misleading.
5.4 The Fund shall use its best efforts to notify such states as the
Distributor and the Fund may approve of its intention to sell any appropriate
number of its Shares; provided that the Fund shall not be required to amend its
Articles of Incorporation or By-Laws to comply with the laws of any state, to
maintain an office in any state, to change the terms of the offering of its
Shares in any state from the terms set forth in its Registration Statement, to
qualify as a foreign corporation in any state or to consent to service of
process in any state other than with respect to claims arising out of the
offering of its Shares. Any such notification may be withheld, terminated or
withdrawn by the Fund at any time in its discretion. As provided in Section 9
hereof, the expense of notification and maintenance of notification shall be
borne by the Fund. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the Fund
in connection with such notifications.
4
<PAGE>
Section 6. Duties of the Distributor
6.1 The Distributor shall devote reasonable time and effort to effect sales
of Shares, but shall not be obligated to sell any specific number of Shares.
Sales of the Shares shall be on the terms described in the Prospectus. The
Distributor may enter into like arrangements with other investment companies.
The Distributor shall compensate the selected dealers as set forth in the
Prospectus.
6.2 In selling the Shares, the Distributor shall use its best efforts in
all respects duly to conform with the requirements of all federal and state laws
relating to the sale of such securities. Neither the Distributor nor any
selected dealer nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus and any sales literature approved by
appropriate officers of the Fund.
6.3 The Distributor shall adopt and follow procedures for the confirmation
of sales to investors and selected dealers, the collection of amounts payable by
investors and selected dealers on such sales and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of Securities
Exchange Act Rule 10b-10 and the rules of the National Association of Securities
Dealers, Inc. (NASD).
6.4 The Distributor shall have the right to enter into selected dealer
agreements with registered and qualified securities dealers and other financial
institutions of its choice for the sale of Shares, provided that the Fund shall
approve the forms of such agreements. Within the United States, the Distributor
shall offer and sell Shares only to such selected dealers as are members in good
standing of the NASD or are institutions exempt from registration under
applicable federal securities laws. Shares sold to selected dealers shall be for
resale by such dealers only at the offering price determined as set forth in the
Prospectus.
Section 7. Payments to the Distributor
7.1 With respect to classes and/or series of Shares which impose a
front-end sales charge, the Distributor shall receive and may retain any portion
of any front-end sales charge which is imposed on such sales and not reallocated
to selected dealers as set forth in the Prospectus, subject to the limitations
of Rule 2830 of the Conduct Rules of the NASD. Payment of these amounts to the
Distributor is not contingent upon the adoption or continuation of any
applicable Plans.
7.2 With respect to classes and/or series of Shares which impose a
contingent deferred sales charge, the Distributor shall receive and may retain
any
5
<PAGE>
contingent deferred sales charge which is imposed on such sales as set forth in
the Prospectus, subject to the limitations of Rule 2830 of the Conduct Rules of
the NASD. Payment of these amounts to the Distributor is not contingent upon the
adoption or continuation of any Plan.
Section 8. Payment of the Distributor under the Plan
8.1 The Fund shall pay to the Distributor as compensation for services
under any Plans adopted by the Fund and this Agreement a distribution and
service fee with respect to the Fund's classes and/or series of Shares as
described in each of the Fund's respective Plans and this Agreement.
8.2 So long as a Plan or any amendment thereto is in effect, the
Distributor shall inform the Board of the commissions and account servicing fees
with respect to the relevant class and/or series of Shares to be paid by the
Distributor to account executives of the Distributor and to broker-dealers,
financial institutions and investment advisers which have dealer agreements with
the Distributor. So long as a Plan (or any amendment thereto) is in effect, at
the request of the Board or any agent or representative of the Fund, the
Distributor shall provide such additional information as may reasonably be
requested concerning the activities of the Distributor hereunder and the costs
incurred in performing such activities with respect to the relevant class and/or
series of Shares.
Section 9. Allocation of Expenses
The Fund shall bear all costs and expenses of the continuous offering of
its Shares (except for those costs and expenses borne by the Distributor
pursuant to a Plan and subject to the requirements of Rule 12b-1 under the
Investment Company Act), including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
Registration Statements and/or Prospectuses under the Investment Company Act or
the Securities Act, and all amendments and supplements thereto, and preparing
and mailing annual and periodic reports and proxy materials to shareholders
(including but not limited to the expense of setting in type any such
Registration Statements, Prospectuses, annual or periodic reports or proxy
materials). The Fund shall also bear the cost of expenses of making notice
filings for the Shares for sale, and, if necessary or advisable in connection
therewith, of qualifying the Fund as a broker or dealer, in such states of the
United States or other jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 5.4 hereof and the cost and expense payable to
each such state for continuing notification therein until
6
<PAGE>
the Fund decides to discontinue such notification pursuant to Section 5.4
hereof. As set forth in Section 8 above, the Fund shall also bear the expenses
it assumes pursuant to any Plan, so long as such Plan is in effect.
Section 10. Indemnification
10.1 The Fund agrees to indemnify, defend and hold the Distributor, its
officers and directors and any person who controls the Distributor within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Distributor,
its officers, members or any such controlling person may incur under the
Securities Act, or under common law or otherwise, arising out of or based upon
any untrue statement of a material fact contained in the Registration Statement
or Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either thereof or necessary to make the
statements in either thereof not misleading, except insofar as such claims,
demands, liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information furnished by the Distributor to the Fund
for use in the Registration Statement or Prospectus; provided, however, that
this indemnity agreement shall not inure to the benefit of any such officer,
member or controlling person unless a court of competent jurisdiction shall
determine in a final decision on the merits, that the person to be indemnified
was not liable by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement (disabling conduct), or, in the absence of such
a decision, a reasonable determination, based upon a review of the facts, that
the indemnified person was not liable by reason of disabling conduct, by (a) a
vote of a majority of a quorum of directors or directors who are neither
"interested persons" of the Fund as defined in Section 2(a)(19) of the
Investment Company Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. The Fund's agreement to indemnify the
Distributor, its officers and members and any such controlling person as
aforesaid is expressly conditioned upon the Fund's being promptly notified of
any action brought against the Distributor, its officers or members, or any such
controlling person, such notification to be given by letter or telegram
addressed to the Fund at its principal business office. The Fund agrees promptly
to notify the Distributor of the commencement of any litigation or proceedings
against it or any of its officers or directors in connection with the issue and
sale of any Shares.
10.2 The Distributor agrees to indemnify, defend and hold the Fund, its
officers and directors and any person who controls the Fund, if any, within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or
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defending against such claims, demands or liabilities and any reasonable counsel
fees incurred in connection therewith) which the Fund, its officers and
directors or any such controlling person may incur under the Securities Act or
under common law or otherwise, but only to the extent that such liability or
expense incurred by the Fund, its directors or officers or such controlling
person resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished by the Distributor to the Fund for use in the Registration Statement
or Prospectus or shall arise out of or be based upon any alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement or Prospectus or necessary to make such
information not misleading. The Distributor's agreement to indemnify the Fund,
its officers and directors and any such controlling person as aforesaid, is
expressly conditioned upon the Distributor's being promptly notified of any
action brought against the Fund, its officers and directors or any such
controlling person, such notification being given to the Distributor at its
principal business office.
Section 11. Duration and Termination of this Agreement
11.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Board of the Fund, or by the vote of a majority of the
outstanding voting securities of the applicable class and/or series of the Fund,
and (b) by the vote of a majority of those directors who are not parties to this
Agreement or interested persons of any such parties and who have no direct or
indirect financial interest in this Agreement or in the operation of any of the
Fund's Plans or in any agreement related thereto (Independent directors), cast
in person at a meeting called for the purpose of voting upon such approval.
11.2 This Agreement may be terminated at any time, without the payment of
any penalty, by a majority of the independent directors or by vote of a majority
of the outstanding voting securities of the applicable class and/or series of
the Fund, or by the Distributor, on sixty (60) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment.
11.3 The terms "affiliated person," "assignment," "interested person" and
"vote of a majority of the outstanding voting securities", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
Section 12. Amendments to this Agreement
This Agreement may be amended by the parties only if such amendment
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is specifically approved by (a) the Board of the Fund, or by the vote of a
majority of the outstanding voting securities of the applicable class and/or
series of the Fund, and (b) by the vote of a majority of the independent
directors cast in person at a meeting called for the purpose of voting on such
amendment.
Section 13. Separate Agreement as to Classes and/or Series
The amendment or termination of this Agreement with respect to any class
and/or series shall not result in the amendment or termination of this Agreement
with respect to any other class and/or series unless explicitly so provided.
Section 14. Governing Law
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New Jersey as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of New Jersey, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year above written.
Prudential Investment Management Services LLC
By: /s/Jonathan M. Greene
-------------------------
Jonathan M. Greene
Executive Vice President
Prudential MoneyMart Assets, Inc.
By: /s/ Richard A. Redeker
-------------------------
Richard A. Redeker
President
9
DEALER AGREEMENT
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC
Prudential Investment Management Services LLC ("Distributor") and
_________________ ("Dealer") have agreed that Dealer will participate in the
distribution of shares ("Shares") of all the funds and series thereof (as they
may exist from time to time) comprising the Prudential Mutual Fund Family (each
a "Fund" and collectively the "Funds") and any classes thereof for which
Distributor now or in the future serves as principal underwriter and
distributor, subject to the terms of this Dealer Agreement ("Agreement"). Any
such additional Funds will be included in this Agreement upon Distributor's
written notification to Dealer.
1. LICENSING
a. Dealer represents and warrants that it is: (i) a broker-dealer
registered with the Securities and Exchange Commission ("SEC"); (ii) a member in
good standing of the National Association of Securities Dealers, Inc. ("NASD");
and (iii) licensed by the appropriate regulatory agency of each state or other
jurisdiction in which Dealer will offer and sell Shares of the Funds, to the
extent necessary to perform the duties and activities contemplated by this
Agreement.
b. Dealer represents and warrants that each of its partners, directors,
officers, employees, and agents who will be utilized by Dealer with respect to
its duties and activities under this Agreement is either appropriately licensed
or exempt from such licensing requirements by the appropriate regulatory agency
of each state or other jurisdiction in which Dealer will offer and sell Shares
of the Funds.
c. Dealer agrees that: (i) termination or suspension of its registration
with the SEC; (ii) termination or suspension of its membership with the NASD; or
(iii) termination or suspension of its license to do business by any state or
other jurisdiction or federal regulatory agency shall immediately cause the
termination of this Agreement. Dealer further agrees to immediately notify
Distributor in writing of any such action or event.
d. Dealer agrees that this Agreement is in all respects subject to the
Conduct Rules of the NASD and such Conduct Rules shall control any provision to
the contrary in this Agreement.
e. Dealer agrees to be bound by and to comply with all applicable state and
federal laws and all rules and regulations promulgated thereunder generally
affecting the sale or distribution of mutual fund shares.
2. ORDERS
a. Dealer agrees to offer and sell Shares of the Funds (including those of
each of its classes) only at the regular public offering price applicable to
such Shares and in
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effect at the time of each transaction. The procedures relating to all orders
and the handling of each order (including the manner of computing the net asset
value of Shares and the effective time of orders received from Dealer) are
subject to: (i) the terms of the then current prospectus and statement of
additional information (including any supplements, stickers or amendments
thereto) relating to each Fund, as filed with the SEC ("Prospectus"); (ii) the
new account application for each Fund, as supplemented or amended from time to
time; and (iii) Distributor's written instructions and multiple class pricing
procedures and guidelines, as provided to Dealer from time to time. To the
extent that the Prospectus contains provisions that are inconsistent with this
Agreement or any other document, the terms of the Prospectus shall be
controlling.
b. Distributor reserves the right at any time, and without notice to
Dealer, to suspend the sale of Shares or to withdraw or limit the offering of
Shares. Distributor reserves the unqualified right not to accept any specific
order for the purchase or sale of Shares.
c. In all offers and sales of the Shares to the public, Dealer is not
authorized to act as broker or agent for, or employee of, Distributor, any Fund
or any other dealer, and Dealer shall not in any manner represent to any third
party that Dealer has such authority or is acting in such capacity. Rather,
Dealer agrees that it is acting as principal for Dealer's own account or as
agent on behalf of Dealer's customers in all transactions in Shares, except as
provided in Section 3.i. hereof. Dealer acknowledges that it is solely
responsible for all suitability determinations with respect to sales of Shares
of the Funds to Dealer's customers and that Distributor has no responsibility
for the manner of Dealer's performance of, or for Dealer's acts or omissions in
connection with, the duties and activities Dealer provides under this Agreement.
d. All orders are subject to acceptance by Distributor in its sole
discretion and become effective only upon confirmation by Distributor.
e. Distributor agrees that it will accept from Dealer orders placed through
a remote terminal or otherwise electronically transmitted via the National
Securities Clearing Corporation ("NSCC") Fund/Serv Networking program, provided,
however, that appropriate documentation thereof and agreements relating thereto
are executed by both parties to this Agreement, including in particular the
standard NSCC Networking Agreement and any other related agreements between
Distributor and Dealer deemed appropriate by Distributor, and that all accounts
opened or maintained pursuant to that program will be governed by applicable
NSCC rules and procedures. Both parties further agree that, if the NSCC
Fund/Serv Networking program is used to place orders, the standard NSCC
Networking Agreement will control insofar as there is any conflict between any
provision of the Dealer Agreement and the standard NSCC Networking Agreement.
3. DUTIES OF DEALER
a. Dealer agrees to purchase Shares only from Distributor or from Dealer's
customers.
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b. Dealer agrees to enter orders for the purchase of Shares only from
Distributor and only for the purpose of covering purchase orders Dealer has
already received from its customers or for Dealer's own bona fide investment.
c. Dealer agrees to date and time stamp all orders received by Dealer and
promptly, upon receipt of any and all orders, to transmit to Distributor all
orders received prior to the time described in the Prospectus for the
calculation of each Fund's net asset value so as to permit Distributor to
process all orders at the price next determined after receipt by Dealer, in
accordance with the Prospectus. Dealer agrees not to withhold placing orders for
Shares with Distributor so as to profit itself as a result of such inaction.
d. Dealer agrees to maintain records of all purchases and sales of Shares
made through Dealer and to furnish Distributor or regulatory authorities with
copies of such records upon request. In that regard, Dealer agrees that, unless
Dealer holds Shares as nominee for its customers or participates in the NSCC
Fund/Serv Networking program, at certain matrix levels, it will provide
Distributor with all necessary information to comply properly with all federal,
state and local reporting requirements and backup and nonresident alien
withholding requirements for its customer accounts including, without
limitation, those requirements that apply by treating Shares issued by the Funds
as readily tradable instruments. Dealer represents and agrees that all Taxpayer
Identification Numbers ("TINs") provided are certified, and that no account that
requires a certified TIN will be established without such certified TIN. With
respect to all other accounts, including Shares held by Dealer in omnibus
accounts and Shares purchased or sold through the NSCC Fund/Serv Networking
program, at certain matrix levels, Dealer agrees to perform all federal, state
and local tax reporting with respect to such accounts, including without
limitation redemptions and exchanges.
e. Dealer agrees to distribute or cause to be delivered to its customers
Prospectuses, proxy solicitation materials and related information and proxy
cards, semi-annual and annual shareholder reports and any other materials in
compliance with applicable legal requirements, except to the extent that
Distributor expressly undertakes to do so in writing.
f. Dealer agrees that if any Share is repurchased by any Fund or is
tendered for redemption within seven (7) business days after confirmation by
Distributor of the original purchase order from Dealer, Dealer shall forfeit its
right to any concession or commission received by Dealer with respect to such
Share and shall forthwith refund to Distributor the full concession allowed to
Dealer or commission paid to Dealer on the original sale. Distributor agrees to
notify Dealer of such repurchase or redemption within a reasonable time after
settlement. Termination or cancellation of this Agreement shall not relieve
Dealer from its obligation under this provision.
g. Dealer agrees that payment for Shares ordered from Distributor shall be
in Fed Funds, New York clearinghouse or other immediately available funds and
that such funds shall be received by Distributor by the earlier of: (i) the end
of the third (3rd) business day following Dealer's receipt of the customer's
order to purchase such Shares; or (ii) the settlement date established in
accordance with Rule 15c6-1 under the Securities Exchange Act of 1934, as
amended. If such payment is not received by Distributor by such date, Dealer
shall forfeit its right to any concession or commission with respect to such
order, and Distributor reserves the
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right, without notice, forthwith to cancel the sale, or, at its option, to sell
the Shares ordered back to the Fund, in which case Distributor may hold Dealer
responsible for any loss, including loss of profit, suffered by Distributor
resulting from Dealer's failure to make payment as aforesaid. If a purchase is
made by check, the purchase is deemed made upon conversion of the purchase
instrument into Fed Funds, New York clearinghouse or other immediately available
funds.
h. Dealer agrees that it: (i) shall assume responsibility for any loss to
the Fund caused by a correction to any order placed by Dealer that is made
subsequent to the trade date for the order, provided such order correction was
not based on any negligence on Distributor's part; and (ii) will immediately pay
such loss to the Fund upon notification.
i. Dealer agrees that in connection with orders for the purchase of Shares
on behalf of any IRAs, 401(k) plans or other retirement plan accounts, by mail,
telephone, or wire, Dealer shall act as agent for the custodian or trustee of
such plans (solely with respect to the time of receipt of the application and
payments), and Dealer shall not place such an order with Distributor until it
has received from its customer payment for such purchase and, if such purchase
represents the first contribution to such a retirement plan account, the
completed documents necessary to establish the retirement plan. Dealer agrees to
indemnify Distributor and its affiliates for any claim, loss, or liability
resulting from incorrect investment instructions received by Distributor from
Dealer.
j. Dealer agrees that it will not make any conditional orders for the
purchase or redemption of Shares and acknowledges that Distributor will not
accept conditional orders for Shares.
k. Dealer agrees that all out-of-pocket expenses incurred by it in
connection with its activities under this Agreement will be borne by Dealer.
l. Dealer agrees that it will keep in force appropriate broker's blanket
bond insurance policies covering any and all acts of Dealer's partners,
directors, officers, employees, and agents adequate to reasonably protect and
indemnify the Distributor and the Funds against any loss which any party may
suffer or incur, directly or indirectly, as a result of any action by Dealer or
Dealer's partners, directors, officers, employees, and agents.
m. Dealer agrees that it will maintain the required net capital as
specified by the rules and regulations of the SEC, NASD and other regulatory
authorities.
4. DEALER COMPENSATION
a. On each purchase of Shares by Dealer from Distributor, the total sales
charges and dealer concessions or commissions, if any, payable to Dealer shall
be as stated on Schedule A to this Agreement, which may be amended by
Distributor from time to time. Distributor reserves the right, without prior
notice, to suspend or eliminate such dealer concession or commissions by
amendment, sticker or supplement to the then current Prospectus for each Fund.
Such sales charges and dealer concessions or commissions, are subject to
reduction under a variety of circumstances as described in each Fund's then
current Prospectus. For an investor to obtain any reduction, Distributor must be
notified at the time of the sale that
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the sale qualifies for the reduced sales charge. If Dealer fails to notify
Distributor of the applicability of a reduction in the sales charge at the time
the trade is placed, neither Distributor nor any Fund will be liable for amounts
necessary to reimburse any investor for the reduction that should have been
effected. Dealer acknowledges that no sales charge or concession or commission
will be paid to Dealer on the reinvestment of dividends or capital gains
reinvestment or on Shares acquired in exchange for Shares of another Fund, or
class thereof, having the same sales charge structure as the Fund, or class
thereof, from which the exchange was made, in accordance with the Prospectus.
b. In accordance with the Funds' Prospectuses, Distributor or any affiliate
may, but is not obligated to, make payments to dealers from Distributor's own
resources as compensation for certain sales that are made at net asset value
("Qualifying Sales"). If Dealer notifies Distributor of a Qualifying Sale,
Distributor may make a contingent advance payment up to the maximum amount
available for payment on the sale. If any of the Shares purchased in a
Qualifying Sale are redeemed within twelve (12) months of the end of the month
of purchase, Distributor shall be entitled to recover any advance payment
attributable to the redeemed Shares by reducing any account payable or other
monetary obligation Distributor may owe to Dealer or by making demand upon
Dealer for repayment in cash. Distributor reserves the right to withhold
advances to Dealer, if for any reason Distributor believes that it may not be
able to recover unearned advances from Dealer.
c. With respect to any Fund that offers Shares for which distribution plans
have been adopted under Rule 12b-1 under the Investment Company Act of 1940, as
amended ("Rule 12b-1 Plans"), Distributor also is authorized to pay the Dealer
continuing distribution and/or service fees, as specified in Schedule A and the
relevant Fund Prospectus, with respect to Shares of any such Fund, to the extent
that Dealer provides distribution, marketing, administrative and other services
and activities regarding the promotion of such Shares and the maintenance of
related shareholder accounts.
d. In connection with the receipt of distribution fees and/or service fees
under Rule 12b-1 Plans applicable to Shares purchased by Dealer's customers,
Distributor directs Dealer to provide enhanced shareholder services such as:
processing purchase and redemption transactions; establishing shareholder
accounts; and providing certain information and assistance with respect to the
Funds. (Redemption levels of shareholder accounts assigned to Dealer will be
considered in evaluating Dealer's continued ability to receive payments of
distribution and/or service fees.) In addition, Dealer agrees to support
Distributor's marketing efforts by, among other things, granting reasonable
requests for visits to Dealer's office by Distributor's wholesalers and
marketing representatives, including all Funds covered by a Rule 12b-1 Plan on
Dealer's "approved," "preferred" or other similar product lists, if applicable,
and otherwise providing satisfactory product, marketing and sales support.
Further, Dealer agrees to provide Distributor with supporting documentation
concerning the shareholder services provided, as Distributor may reasonably
request from time to time.
e. All Rule 12b-1 Plan distribution and/or servicing fees shall be based on
the value of Shares attributable to Dealer's customers and eligible for such
payment, and shall be calculated on the basis of and at the rates set forth in
the compensation schedule then in effect. Without prior approval by a majority
of the outstanding shares of a Fund, the aggregate annual
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fees paid to Dealer pursuant to any Rule 12b-1 Plan shall not exceed the amounts
stated as the "annual maximums" in each Fund's Prospectus, which amount shall be
a specified percent of the value of the Fund's net assets held in Dealer's
customers' accounts that are eligible for payment pursuant to the Rule 12b-1
Plans (determined in the same manner as each Fund uses to compute its net assets
as set forth in its then current Prospectus).
f. The provisions of any Rule 12b-1 Plan between the Funds and the
Distributor shall control over this Agreement in the event of any inconsistency.
Each Rule 12b-1 Plan in effect on the date of this Agreement is described in the
relevant Fund's Prospectus. Dealer hereby acknowledges that all payments under
Rule 12b-1 Plans are subject to limitations contained in such Rule 12b-1 Plans
and may be varied or discontinued at any time.
5. REDEMPTIONS, REPURCHASES AND EXCHANGES
a. The Prospectus for each Fund describes the provisions whereby the Fund,
under all ordinary circumstances, will redeem Shares held by shareholders on
demand. Dealer agrees that it will not make any representations to shareholders
relating to the redemption of their Shares other than the statements contained
in the Prospectus and the underlying organizational documents of the Fund, to
which it refers, and that Dealer will pay as redemption proceeds to shareholders
the net asset value, minus any applicable deferred sales charge or redemption
fee, determined after receipt of the order as discussed in the Prospectus.
b. Dealer agrees not to repurchase any Shares from its customers at a price
below that next quoted by the Fund for redemption or repurchase, I.E., at the
net asset value of such Shares, less any applicable deferred sales charge, or
redemption fee, in accordance with the Fund's Prospectus. Dealer shall, however,
be permitted to sell Shares for the account of the customer or record owner to
the Funds at the repurchase price then currently in effect for such Shares and
may charge the customer or record owner a fair service fee or commission for
handling the transaction, provided Dealer discloses the fee or commission to the
customer or record owner. Nevertheless, Dealer agrees that it shall not under
any circumstances maintain a secondary market in such repurchased Shares.
c. Dealer agrees that, with respect to a redemption order it has made, if
instructions in proper form, including any outstanding certificates, are not
received by Distributor within the time customary or the time required by law,
the redemption may be canceled forthwith without any responsibility or liability
on Distributor's part or on the part of any Fund, or Distributor, at its option,
may buy the shares redeemed on behalf of the Fund, in which latter case
Distributor may hold Dealer responsible for any loss, including loss of profit,
suffered by Distributor resulting from Distributor's failure to settle the
redemption.
d. Dealer agrees that it will comply with any restrictions and limitations
on exchanges described in each Fund's Prospectus, including any restrictions or
prohibitions relating to frequent purchases and redemptions (i.e., market
timing).
6. MULTIPLE CLASSES OF SHARES
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Distributor may, from time to time, provide Dealer with written guidelines
or standards relating to the sale or distribution of Funds offering multiple
classes of Shares with different sales charges and distribution-related
operating expenses.
7. FUND INFORMATION
a. Dealer agrees that neither it nor any of its partners, directors,
officers, employees, and agents is authorized to give any information or make
any representations concerning Shares of any Fund except those contained in the
Fund's then current Prospectus or in materials provided by Distributor.
b. Distributor will supply to Dealer Prospectuses, reasonable quantities of
sales literature, sales bulletins, and additional sales information as provided
by Distributor. Dealer agrees to use only advertising or sales material relating
to the Funds that: (i) is supplied by Distributor, or (ii) conforms to the
requirements of all applicable laws or regulations of any government or
authorized agency having jurisdiction over the offering or sale of Shares of the
Funds and is approved in writing by Distributor in advance of its use. Such
approval may be withdrawn by Distributor in whole or in part upon written notice
to Dealer, and Dealer shall, upon receipt of such notice, immediately
discontinue the use of such sales literature, sales bulletins and advertising.
Dealer is not authorized to modify or translate any such materials without
Distributor's prior written consent.
8. SHARES
a. Distributor acts solely as agent for the Fund and Distributor shall have
no obligation or responsibility with respect to Dealer's right to purchase or
sell Shares in any state or jurisdiction.
b. Distributor shall periodically furnish Dealer with information
identifying the states or jurisdictions in which it is believed that all
necessary notice, registration or exemptive filings for Shares have been made
under applicable securities laws such that offers and sales of Shares may be
made in such states or jurisdictions. Distributor shall have no obligation to
make such notice, registration or exemptive filings with respect to Shares in
any state or jurisdiction.
c. Dealer agrees not to transact orders for Shares in states or
jurisdictions in which it has been informed that Shares may not be sold or in
which it and its personnel are not authorized to sell Shares.
d. Distributor shall have no responsibility, under the laws regulating the
sale of securities in the United States or any foreign jurisdiction, with
respect to the qualification or status of Dealer or Dealer's personnel selling
Fund Shares. Distributor shall not, in any event, be liable or responsible for
the issue, form, validity, enforceability and value of such Shares or for any
matter in connection therewith.
e. Dealer agrees that it will make no offers or sales of Shares in any
foreign jurisdiction, except with the express written consent of Distributor.
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9. INDEMNIFICATION
a. Dealer agrees to indemnify, defend and hold harmless Distributor and the
Funds and their predecessors, successors, and affiliates, each current or former
partner, officer, director, employee, shareholder or agent and each person who
controls or is controlled by Distributor from any and all losses, claims,
liabilities, costs, and expenses, including attorney fees, that may be assessed
against or suffered or incurred by any of them howsoever they arise, and as they
are incurred, which relate in any way to: (i) any alleged violation of any
statute or regulation (including without limitation the securities laws and
regulations of the United States or any state or foreign country) or any alleged
tort or breach of contract, related to the offer or sale by Dealer of Shares of
the Funds pursuant to this Agreement (except to the extent that Distributor's
negligence or failure to follow correct instructions received from Dealer is the
cause of such loss, claim, liability, cost or expense); (ii) any redemption or
exchange pursuant to instructions received from Dealer or its partners,
affiliates, officers, directors, employees or agents; or (iii) the breach by
Dealer of any of its representations and warranties specified herein or the
Dealer's failure to comply with the terms and conditions of this Agreement,
whether or not such action, failure, error, omission, misconduct or breach is
committed by Dealer or its predecessor, successor, or affiliate, each current or
former partner, officer, director, employee or agent and each person who
controls or is controlled by Dealer.
b. Distributor agrees to indemnify, defend and hold harmless Dealer and its
predecessors, successors and affiliates, each current or former partner,
officer, director, employee or agent, and each person who controls or is
controlled by Dealer from any and all losses, claims, liabilities, costs and
expenses, including attorney fees, that may be assessed against or suffered or
incurred by any of them which arise, and which relate to any untrue statement of
or omission to state a material fact contained in the Prospectus or any written
sales literature or other marketing materials provided by the Distributor to the
Dealer, required to be stated therein or necessary to make the statements
therein not misleading.
c. Dealer agrees to notify Distributor, within a reasonable time, of any
claim or complaint or any enforcement action or other proceeding with respect to
Shares offered hereunder against Dealer or its partners, affiliates, officers,
directors, employees or agents, or any person who controls Dealer, within the
meaning of Section 15 of the Securities Act of 1933, as amended.
d. Dealer further agrees promptly to send Distributor copies of (i) any
report filed pursuant to NASD Conduct Rule 3070, including, without limitation
quarterly reports filed pursuant to Rule 3070(c), (ii) reports filed with any
other self-regulatory organization in lieu of Rule 3070 reports pursuant to Rule
3070(e) and (iii) amendments to Dealer's Form BD.
e. Each party's obligations under these indemnification provisions shall
survive any termination of this Agreement.
10. TERMINATION; AMENDMENT
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a. In addition to the automatic termination of this Agreement specified in
Section 1.c. of this Agreement, each party to this Agreement may unilaterally
cancel its participation in this Agreement by giving thirty (30) days prior
written notice to the other party. In addition, each party to this Agreement may
terminate this Agreement immediately by giving written notice to the other party
of that other party's material breach of this Agreement. Such notice shall be
deemed to have been given and to be effective on the date on which it was either
delivered personally to the other party or any officer or member thereof, or was
mailed postpaid or delivered to a telegraph office for transmission to the other
party's designated person at the addresses shown herein or in the most recent
NASD Manual.
b. This Agreement shall terminate immediately upon the appointment of a
Trustee under the Securities Investor Protection Act or any other act of
insolvency by Dealer.
c. The termination of this Agreement by any of the foregoing means shall
have no effect upon transactions entered into prior to the effective date of
termination and shall not relieve Dealer of its obligations, duties and
indemnities specified in this Agreement. A trade placed by Dealer subsequent to
its voluntary termination of this Agreement will not serve to reinstate the
Agreement. Reinstatement, except in the case of a temporary suspension of
Dealer, will only be effective upon written notification by Distributor.
d. This Agreement is not assignable or transferable and will terminate
automatically in the event of its "assignment," as defined in the Investment
Company Act of 1940, as amended and the rules, regulations and interpretations
thereunder. The Distributor may, however, transfer any of its duties under this
Agreement to any entity that controls or is under common control with
Distributor.
e. This Agreement may be amended by Distributor at any time by written
notice to Dealer. Dealer's placing of an order or accepting payment of any kind
after the effective date and receipt of notice of such amendment shall
constitute Dealer's acceptance of such amendment.
11. DISTRIBUTOR'S REPRESENTATIONS AND WARRANTIES
Distributor represents and warrants that:
a. It is a limited liability company duly organized and existing and in
good standing under the laws of the state of Delaware and is duly registered or
exempt from registration as a broker-dealer in all states and jurisdictions in
which it provides services as principal underwriter and distributor for the
Funds.
b. It is a member in good standing of the NASD.
c. It is empowered under applicable laws and by Distributor's charter and
by-laws to enter into this Agreement and perform all activities and services of
the Distributor provided for herein and that there are no impediments, prior or
existing, regulatory, self-regulatory, administrative, civil or criminal matters
affecting Distributor's ability to perform under this Agreement.
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d. All requisite actions have been taken to authorize Distributor to enter
into and perform this Agreement.
12. ADDITIONAL DEALER REPRESENTATIONS AND WARRANTIES
In addition to the representations and warranties found elsewhere in this
Agreement, Dealer represents and warrants that:
a. It is duly organized and existing and in good standing under the laws of
the state, commonwealth or other jurisdiction in which Dealer is organized and
that Dealer will not offer Shares of any Fund for sale in any state or
jurisdiction where such Shares may not be legally sold or where Dealer is not
qualified to act as a broker-dealer.
b. It is empowered under applicable laws and by Dealer's organizational
documents to enter into this Agreement and perform all activities and services
of the Dealer provided for herein and that there are no impediments, prior or
existing, regulatory, self-regulatory, administrative, civil or criminal matters
affecting Dealer's ability to perform under this Agreement.
c. All requisite actions have been taken to authorize Dealer to enter into
and perform this Agreement.
d. It is not, at the time of the execution of this Agreement, subject to
any enforcement or other proceeding with respect to its activities under state
or federal securities laws, rules or regulations.
13. SETOFF; DISPUTE RESOLUTION; GOVERNING LAW
a. Should any of Dealer's concession accounts with Distributor have a debit
balance, Distributor shall be permitted to offset and recover the amount owed
from any other account Dealer has with Distributor, without notice or demand to
Dealer.
b. In the event of a dispute concerning any provision of this Agreement,
either party may require the dispute to be submitted to binding arbitration
under the commercial arbitration rules and procedures of the NASD. The parties
agree that, to the extent permitted under such arbitration rules and procedures,
the arbitrators selected shall be from the securities industry. Judgment upon
any arbitration award may be entered by any state or federal court having
jurisdiction.
c. This Agreement shall be governed and construed in accordance with the
laws of the state of New Jersey, not including any provision which would require
the general application of the law of another jurisdiction.
14. INVESTIGATIONS AND PROCEEDINGS
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The parties to this Agreement agree to cooperate fully in any securities
regulatory investigation or proceeding or judicial proceeding with respect to
each's activities under this Agreement and promptly to notify the other party of
any such investigation or proceeding.
15. CAPTIONS
All captions used in this Agreement are for convenience only, are not a
party hereof, and are not to be used in construing or interpreting any aspect
hereof.
16. ENTIRE UNDERSTANDING
This Agreement contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and supersedes all previous
agreements. This Agreement shall be binding upon the parties hereto when signed
by Dealer and accepted by Distributor.
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17. SEVERABILITY
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law. If, however, any
provision of this Agreement is held under applicable law to be invalid, illegal,
or unenforceable in any respect, such provision shall be ineffective only to the
extent of such invalidity, and the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired in any
way.
18. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and supersedes all previous
agreements and/or understandings of the parties. This Agreement shall be binding
upon the parties hereto when signed by Dealer and accepted by Distributor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year set forth below.
PRUDENTIAL INVESTMENT MANAGEMENT
SERVICES LLC
By:
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Name:
-----------------------------------
Title:
----------------------------------
Date:
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DEALER:
--------------------------------
By:
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(Signature)
Name:
-----------------------------------
Title:
----------------------------------
Address:
--------------------------------
Telephone:
-----------------------------
NASD CRD #
-----------------------------
Prudential Dealer #
--------------------
(Internal Use Only)
Date:
-----------------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form N-1A of our
report dated February 14, 2000, relating to the financial statements and
financial highlights of Prudential MoneyMart Assets, Inc., which appears in such
Registration Statement. We also consent to the references to us under the
headings "Investment Advisory and Other Services" and "Financial Highlights" in
such Registration Statement.
PricewaterhouseCoopers LLP
New York, New York
February 28, 2000
PRUDENTIAL MONEYMART ASSETS, INC.
Amended and Restated
Distribution and Service Plan
(Class A and Class Z Shares)
Introduction
The Distribution and Service Plan (the Plan) set forth below which is
designed to conform to the requirements of Rule 12b-1 under the Investment
Company Act of 1940 (the Investment Company Act) and Rule 2830 of the Conduct
Rules of the National Association of Securities Dealers, Inc. (NASD) has been
adopted by Prudential MoneyMart Assets, Inc. (the Fund) and by Prudential
Investment Management Services LLC, the Fund's distributor (the Distributor).
The Fund has entered into a distribution agreement pursuant to which the
Fund will employ the Distributor to distribute shares issued by the Fund
(shares). Under the Plan, the Fund intends to pay to the Distributor, as
compensation for its services, a distribution and service fee with respect to
shares.
A majority of the Board of Directors of the Fund, including a majority of
those Directors/Trustees who are not "interested persons" of the Fund (as
defined in the Investment Company Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the Rule 12b-1 Directors), have determined by votes cast in person at a meeting
called for the purpose of voting on this Plan that there is a reasonable
likelihood that adoption and continuation of this Plan will benefit the Fund and
its shareholders. Expenditures under this Plan by the Fund for Distribution
Activities (defined below) are primarily intended to result in the sale of
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shares of the Fund within the meaning of paragraph (a)(2) of Rule 12b-1
promulgated under the Investment Company Act.
The purpose of the Plan is to create incentives to the Distributor and/or
other qualified broker-dealers and their account executives to provide
distribution assistance to their customers who are investors in the Fund, to
defray the costs and expenses associated with the preparation, printing and
distribution of prospectuses and sales literature and other promotional and
distribution activities and to provide for the servicing and maintenance of
shareholder accounts.
The Plan
The material aspects of the Plan are as follows:
1. Distribution Activities
The Fund shall engage the Distributor to distribute shares of the Fund and
to service shareholder accounts using all of the facilities of the Distributor's
distribution network, including sales personnel and branch office and central
support systems, and also using such other qualified broker-dealers and
financial institutions as the Distributor may select, including Prudential
Securities Incorporated (Prudential Securities) and Pruco Securities Corporation
(Prusec). Services provided and activities undertaken to distribute shares of
the Fund are referred to herein as "Distribution Activities."
2. Payment of Service Fee
The Fund shall reimburse the Distributor for costs incurred by it in
providing personal service and/or maintaining shareholder accounts at a rate not
to exceed .125 of 1% per annum of the average daily net assets of the shares
(service fee). The Fund
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shall calculate and accrue daily amounts reimbursable by the shares of the Fund
hereunder and shall pay such amounts monthly or at such other intervals as the
Board of Directors may determine. Costs of the Distributor subject to
reimbursement hereunder include account servicing fees and indirect and overhead
costs associated with providing personal service and/or maintaining shareholder
accounts.
3. Payment for Distribution Activities
Amounts paid to the Distributor by the shares of the Fund will not be used
to pay the distribution expenses incurred with respect to any other class of
shares of the Fund except that distribution expenses attributable to the Fund as
a whole will be allocated to the shares according to the ratio of the sales of
shares to the total sales of the Fund's shares over the Fund's fiscal year or
such other allocation method approved by the Board of Directors. The allocation
of distribution expenses among classes will be subject to the review of the
Board of Directors.
The Distributor shall spend such amounts as it deems appropriate on
Distribution Activities which include, among others:
(a) sales commissions and trailer commissions paid to, or on account of,
account executives of the Distributor;
(b) indirect and overhead costs of the Distributor associated with
Distribution Activities, including central office and branch expenses;
(c) amounts paid to Prudential Securities or Prusec for performing
services under a dealer agreement between Prudential Securities or
Prusec and the Distributor for sale of shares of the Fund, including
sales commissions, trailer commissions paid to, or on account of,
agents and indirect and overhead costs associated with Distribution
Activities;
(d) advertising for the Fund in various forms through any
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available medium, including the cost of printing and mailing Fund
prospectuses, statements of additional information and periodic
financial reports and sales literature to persons other than current
shareholders of the Fund; and
(e) sales commissions (including trailer commissions) paid to, or on
account of, broker-dealers and financial institutions (other than
Prudential Securities or Prusec) which have entered into dealer
agreements with the Distributor with respect to shares of the Fund.
The Fund shall reimburse the Distributor for incurred by it in performing
Distribution Activities at a rate which, together with the service fee
(described in Section 2 hereof), shall not exceed .125 of 1% per annum of the
average daily net assets of the shares of the Fund. The Fund shall calculate and
accrue daily amounts reimbursable by the shares of the Fund hereunder and shall
pay such amounts monthly or at such other intervals as the Board of Directors
may determine.
Amounts paid to the Distributor by the shares of the Fund will not be used
to pay the distribution expenses incurred with respect to any other class of
shares of the Fund except that distribution expenses attributable to the Fund as
a whole will be allocated to the shares according to the ratio of the sales of
shares to the total sales of the Fund's shares over the Fund's fiscal year or
such other allocation method approved by the Board of Directors. The allocation
of distribution expenses among classes will be subject to the review of the
Board of Directors.
Costs of the Distributor subject to reimbursement hereunder are costs of
performing Distribution Activities and may include, among others:
(a) amounts paid to Prudential Securities or Prusec in reimbursement of
costs incurred by Prudential Securities or Prusec in performing
services under a dealer agreement
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between Prudential Securities or Prusec and the Distributor for sale
of shares of the Fund, including sales commissions, trailer
commissions paid to, or on account of, account executives or agents
and indirect and overhead costs associated with Distribution
Activities, including central office and branch expenses;
(b) advertising for the Fund in various forms through any available
medium, including the cost of printing and mailing Fund prospectuses,
statements of additional information and periodic financial reports
and sales literature to persons other than current shareholders of the
Fund; and
(c) sales commissions (including trailer commissions) paid to, or on
account of, broker-dealers and financial institutions (other than
Prudential Securities or Prusec) which have entered into dealer
agreements with the Distributor with respect to shares of the Fund.
4. Quarterly Reports; Additional Information
An appropriate officer of the Fund will provide to the Board of Directors
of the Fund for review, at least quarterly, a written report specifying in
reasonable detail the amounts expended for Distribution Activities (including
payment of the service fee) and the purposes for which such expenditures were
made in compliance with the requirements of Rule 12b-1. The Distributor will
provide to the Board of Directors of the Fund such additional information as the
Board shall from time to time reasonably request, including information about
Distribution Activities undertaken or to be undertaken by the Distributor.
The Distributor will inform the Board of Directors of the Fund of the
commissions and account servicing fees to be paid by the Distributor to account
executives of the Distributor and to broker-dealers and financial institutions
which have dealer agreements with the Distributor.
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5. Effectiveness; Continuation
The Plan shall not take effect until it has been approved by a vote of a
majority of the outstanding voting securities (as defined in the Investment
Company Act) of the shares of the Fund.
If approved by a vote of a majority of the outstanding voting securities of
the shares of the Fund, the Plan shall, unless earlier terminated in accordance
with its terms, continue in full force and effect thereafter for so long as such
continuance is specifically approved at least annually by a majority of the
Board of Directors of the Fund and a majority of the Rule 12b-1 Directors by
votes cast in person at a meeting called for the purpose of voting on the
continuation of the Plan.
6. Termination
This Plan may be terminated at any time, without the payment of any
penalty, by a majority of the Rule 12b-1 Directors or by vote of a majority of
the outstanding voting securities (as defined in the Investment Company Act) of
the Class A and Class Z shares of the Fund, or by the Distributor, on sixty (60)
days' written notice to the other party. This Plan shall automatically terminate
in the event of its assignment.
7. Amendments
The Plan may not be amended to change the combined service and distribution
fees to be paid as provided for in Sections 2 and 3 hereof so as to increase
materially the amounts payable under this Plan unless such amendment shall be
approved by the vote of a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the shares of the Fund. All material
amendments of the Plan shall be approved by a majority of the Board of Directors
of the Fund and a majority of the Rule
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12b-1 Directors by votes cast in person at a meeting called for the purpose of
voting on the Plan.
8. Rule 12b-1 Directors
While the Plan is in effect, the selection and nomination of the Directors
shall be committed to the discretion of the Rule 12b-1 Directors.
9. Records
The Fund shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 4 hereof, for a period of not less than six
years from the date of effectiveness of the Plan, such agreements or reports,
and for at least the first two years in an easily accessible place.
Dated: June 1, 1998
