November 26, 1996
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1996 FOR
THE MEDLEY PROGRAM
GROUP TAX-DEFERRED VARIABLE ANNUITY CONTRACTS
ISSUED THROUGH
THE PRUDENTIAL VARIABLE CONTRACT ACCOUNT-10 ("VCA-10")
THE PRUDENTIAL VARIABLE CONTRACT ACCOUNT-11 ("VCA-11")
AND THE PRUDENTIAL VARIABLE CONTRACT ACCOUNT-24 ("VCA-24")
On November 22, 1996, persons having voting rights in respect of VCA-10
approved two proposals to revise VCA-10's fundamental investment policies and
restrictions. First, a proposal to revise VCA-10's fundamental investment
objective was approved. Second, a proposal was approved to revise VCA-10's
fundamental investment restrictions (1) to permit VCA-10 to make certain
investments and utilize certain investment techniques designed to meet VCA-10's
objective, and (2) to make the restrictions more consistent with other accounts
and funds managed by Prudential and its affiliates.
Also on November 22, 1996, persons having voting rights in respect of
VCA-11 approved a proposal to revise VCA-11's fundamental investment
restrictions (1) to make the restrictions more consistent with other accounts
and funds managed by Prudential and its affiliates; and (2) to make certain
restrictions non-fundamental so that they may be changed by the VCA-11
Committee.
These approved changes will be effective on the date of the next revision
of the MEDLEY prospectus, which is currently expected to be May 1, 1997. This
supplement is designed to advise current investors of changes that will become
effective as of that date.
1. VCA-10 -- Revised Investment Objective
--------------------------------------
Effective May 1, 1997, VCA-10's investment objective will change as
described below. The primary purpose of the change is to make the objective
consistent with other accounts and funds managed by Prudential and its
affiliates. Other than the changes resulting from the revisions to VCA-10's
investment restrictions, also described below, the investment adviser does not
anticipate that there will be significant differences in the way in which the
Account is managed.
Effective May 1, 1997, the VCA-10 investment objective stated on the cover
page will be changed to the following:
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The Prudential Variable Contract Account-10 will invest primarily in equity
securities of major, established corporations that are selected with the
objective of long-term growth of capital.
Effective May 1, 1997, the definition of "Variable Contract Account-10" on
page 2 will be changed to the following:
A separate account of Prudential registered under the Investment Company
Act of 1940 as an open-end, diversified management investment company,
invested primarily in equity securities of major, established corporations
that are selected with the objective of long-term growth.
Effective May 1, 1997, the first two sentences under "Investment Objectives
of the Accounts" on page 5 will be changed to the following:
VCA-10's investment objective is long-term growth of capital. VCA-10
will seek to achieve this objective by investing primarily in equity
securities of major, established corporations. Current income, if any,
is incidental to this objective.
Effective May 1, 1997, the paragraph under "VCA-10's investment objectives"
on page 12 will be changed to the following:
VCA-10's investment objective is long-term growth of capital. VCA-10 will
seek to achieve this objective by investing primarily in equity securities
of major, established corporations. Current income, if any, is incidental
to this objective. This objective is a fundamental investment policy and
may not be changed without the approval of a majority vote of persons
having voting rights in respect of VCA-10 (as defined in the 1940 Act).
Certain investment restrictions applicable to VCA-10 are set forth in a
supplement to the Statement of Additional Information.
2. VCA-10 -- Revised Non-Fundamental Investment Policy
---------------------------------------------------
Effective May 1, 1997, the second paragraph under "VCA-10's investment
policy" on page 12 will be changed to the following:
In attempting to achieve its objective, VCA-10 will invest in common
stocks, preferred stocks, warrants or convertible bonds which, in the
opinion of VCA-10's investment adviser, are believed to be in sound
financial condition and have prospects for price appreciation greater than
broadly based stock indices. Under normal market conditions, VCA-10 may
also invest up to 20% of its assets in investment grade
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short-term, intermediate-term, or long-term debt instruments. At times when
economic conditions or general levels of common stock prices are such that
the investment adviser deems it prudent to adopt a defensive position by
reducing or curtailing investments in equities, a larger proportion than
usual of VCA-10's assets may be invested in such debt instruments.
3. VCA-10 -- Revised Fundamental Investment Restrictions
-----------------------------------------------------
Effective May 1, 1997, VCA-10's fundamental investment restrictions will be
revised in a variety of respects. The current investment restrictions are set
forth on pages 3-4 of the statement of additional information ("SAI") for
VCA-10, VCA-11 and VCA-24 dated May 1, 1996. The revised restrictions are set
forth in a supplement dated November 26, 1996 to the SAI (the "SAI Supplement").
For more information, please refer to those documents, which are available from
Prudential free of charge upon request.
Briefly, those revisions will permit VCA-10 to make certain investments and
utilize certain investment techniques designed to meet VCA-10's objective. Among
other things, effective May 1, 1997, VCA-10 may utilize (1) reverse repurchase
agreements; (2) dollar rolls; (3) interest rate swaps; and (4) forward foreign
currency exchange contracts. In addition, effective May 1, 1997, the revised
restrictions will broaden VCA-10's existing authority to use options and
financial futures contracts. More information about these various investments
and techniques, including certain risks associated with their use, is included
in the SAI Supplement.
4. VCA-11 -- Revised Fundamental Investment Restrictions
-----------------------------------------------------
Effective May 1, 1997, VCA-11's fundamental investment restrictions will be
revised in a variety of respects. The current investment restrictions are set
forth on pages 3-4 of the SAI. The revised restrictions are set forth in the SAI
Supplement. For more information, please refer to those documents, which are
available from Prudential free of charge upon request.
Because rules of the Securities and Exchange Commission already
significantly limit the types of securities in which VCA-11 may invest, the
VCA-11 Committee and the investment adviser do not expect that the revisions to
the restrictions will have any impact on VCA-11's current investment practices.
The revisions were made for the sake of consistency with other accounts and for
future flexibility.
