SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss. 240.14a-2
The Prudential Series Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of Each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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SUPPLEMENTARY PROXY MATERIAL
EQUITY PORTFOLIO
EQUITY INCOME PORTFOLIO
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SPECIAL MEETING OF SHAREHOLDERS OF
THE PRUDENTIAL SERIES FUND, INC.
TO BE HELD ON JANUARY 31, 2001
----------
In this statement, we discuss four additional proposals that shareholders
of the Equity Portfolio and Equity Income Portfolio of the Prudential Series
Fund, Inc. (the Fund) will be asked to vote upon. This statement is accompanied
by the proxy statement that will be presented to all shareholders of the Fund
(the Main Proxy Statement). In certain portions of this statement, we have
included disclosure by simply referring to the pertinent section of the Main
Proxy Statement. As with the Main Proxy Statement, this statement (the
Supplementary Statement) is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Directors to be used at the
Special Meeting of Shareholders and at any adjournments thereof (the Meeting) to
be held on January 31, 2001 at 9:00 a.m. Eastern time at the offices of The
Prudential Insurance Company of America (Prudential), 100 Mulberry Street,
Gateway Center Three, 14th Floor, Newark, NJ. The Fund began to mail copies of
the Main Proxy Statement and the Supplementary Statement to shareholders of the
Equity and Equity Income Portfolios on or about December 15, 2000.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is being made primarily by the mailing of the Main Proxy Statement
and the Supplementary Statement and the accompanying proxy card. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, electronic
means or by personal interview by representatives of the Fund or Prudential.
Proxies may be revoked at any time before they are voted. The expenses in
connection with preparing the Main Proxy Statement and the Supplementary
Statement and its enclosures and of all solicitations will be paid by the Fund.
The Fund may reimburse brokerage firms and others for their reasonable expenses
in forwarding solicitation material to the beneficial owners of shares.
The principal business address of Prudential (the Fund's administrator),
and of Prudential Investment Management Services LLC (PIMS) (the Fund's
principal underwriter) is 751 Broad Street, Newark, NJ 07102. PIMS is an
indirect wholly-owned subsidiary of Prudential. The principal business address
of the Fund's proposed new investment adviser, Prudential Investments Fund
Management LLC (PIFM), is 100 Mulberry Street, Gateway Center Three, 14th floor,
Newark, NJ 07102. PIFM currently serves as the investment adviser to the Fund
under an interim management contract.
If the enclosed proxy card is executed and returned, it may nevertheless be
revoked at any time prior to its use by written notification received by the
Fund, by the execution of a later-dated proxy card, or by attending the meeting
and voting in person.
All proxy cards solicited by the Board of Directors that are properly
executed and received by the Secretary prior to the Meeting, and are not
revoked, will be voted at the Meeting. Shares represented by such proxies will
be voted in accordance with the instructions thereon. Prudential, its affiliated
insurance companies, and certain other insurers are the legal owners of all Fund
shares, but in accordance with current policy of the Securities and Exchange
Commission (SEC), these insurers pass voting rights to the variable annuity and
variable life
1
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insurance contractholders and certain plan participants that have allocated
purchase payments to subaccounts corresponding to Portfolios of the Fund. In
addition to voting Fund shares in accordance with contractholder/participant
instructions that they do receive, Prudential and those insurers will vote
shares that are not voted by contractholders/participants, as well as shares
owned beneficially by such insurers themselves, in the same proportions as the
votes that actually are cast by contractholders/participants. Prudential, its
affiliated insurers, and the other insurers will apportion votes to each
contractholder/participant in direct proportion to the dollar value of the
pertinent variable contract as of the record date.
HOW CAN I VOTE MY SHARES?
o BY MAIL: By signing, dating, voting and returning the proxy card in the
enclosed postage paid envelope.
o BY PHONE: With a toll-free call to 1-888-221-0697 between 9:00 A.M. and
10:00 P.M. (Eastern Time).
o BY INTERNET: By signing onto the internet site listed on your proxy card
and entering the proper information, including the control number also
listed on your poxy card.
O IN PERSON: By attending the meeting and voting your shares.
If you have questions regarding the Main Proxy Statement or the Supplementary
Statement please call (877) 778-5008, from 8 a.m. to 6 p.m. Eastern Time, Monday
through Friday.
Class 1 and Class 2 shares of the Equity Portfolio and Equity Income
Portfolio of the Fund issued and outstanding as of November 17, 2000 (the record
date) are indicated in the following table:
PORTFOLIO # OF SHARES
--------- -----------
Equity ....................................................... 198,916,100
Equity Income ................................................ 90,728,873
As of November 17, 2000, the directors/nominees and Fund officers owned, in
the aggregate, none of the Fund's outstanding shares--all of the Fund's
outstanding shares are owned by insurance company separate accounts. To the
knowledge of the Fund, no shareholder of record (other than Prudential, its
affiliated insurers, and the other insurers) owned beneficially more than 5% of
the outstanding shares of the Fund as of November 17, 2000. None of the Fund's
executive officers has any substantial economic interest in any matter to be
acted upon at the Meeting.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED JUNE 30,
2000, CALL (877) 778-5008 OR WRITE TO PRUDENTIAL AT 751 BROAD STREET, NEWARK, NJ
07102-3777.
VOTE REQUIRED: PROPOSALS 1-8 ARE DISCUSSED IN THE MAIN PROXY STATEMENT.
APPROVAL OF PROPOSALS 9, 10, 11 AND 12 BELOW OF THIS SUPPLEMENTARY STATEMENT
REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING
SECURITIES" OF EACH PORTFOLIO IN ORDER TO BE DEEMED EFFECTIVE WITH RESPECT TO
EACH SUCH PORTFOLIO. A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS THE
AFFIRMATIVE VOTE OF (a) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR (b) MORE
THAN 50% OF THE OUTSTANDING VOTING SECURITIES, WHICHEVER IS LESS.
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The following table summarizes each proposal and lists the Supplementary
Statement page where the proposal is discussed in more detail. Implementation of
these proposals is contingent upon shareholder approval of the proposed
management contract between PIFM and the Fund.
PROPOSAL # PROPOSAL DESCRIPTION PAGE
---------- -------------------- ----
9. To approve a new subadvisory agreement between 4
Prudential Investments Fund Management LLC and GE
Investment Management Incorporated for the Equity
Portfolio.
10. To approve a new subadvisory agreement between 6
Prudential Investments Fund Management LLC and Salomon
Brothers Asset Management Inc. for the Equity Portfolio.
11. To approve a new subadvisory agreement between 8
Prudential Investments Fund Management LLC and Deutsche
Asset Management, Inc. for the Equity Income Portfolio.
12. To approve a new subadvisory agreement between 10
Prudential Investments Fund Management LLC and Key Asset
Management, Inc. for the Equity Income Portfolio.
The table below indicates the Proposals that are applicable to each
Portfolio within this Supplementary Statement.
PORTFOLIO PROPOSALS 9 AND 10 PROPOSALS 11 AND 12
--------- ------------------ -------------------
Equity X
Equity Income X
3
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PROPOSAL 9
PROPOSED SUBADVISORY AGREEMENT BETWEEN PIFM AND GE ASSET MANAGEMENT INCORPORATED
In proposal 5(b) within the Main Proxy Statement, shareholders of the Fund's
Equity Portfolio are being asked to vote upon a subadvisory agreement between
Prudential Investments Fund Management LLC (PIFM) and Jennison Associates LLC
(Jennison). Here, we are asking shareholders of the Fund's Equity Portfolio to
vote on a subadvisory agreement between PIFM and GE Asset Management
Incorporated (GE) under which GE would serve as subadviser to a portion of the
assets (approximately 25%) of the Equity Portfolio. If this proposed contract is
approved, and proposal 5(b) within the Main Proxy Statement also is approved by
Equity Portfolio shareholders, then PIFM will employ both Jennison and GE as
subadvisers to the Equity Portfolio. If Proposal 10 within this Supplementary
Statement is approved, Salomon Brothers Asset Management Inc. would manage a
portion of the Equity Portfolio's assets.
GE, located at 3003 Summer Street, Stamford, CT 06905, is a wholly-owned
subsidiary of General Electric Company, a widely held public corporation.
Together with its predecessor organizations, GE has managed assets for employee
pension and benefit plans since the late 1920s. As of September 30, 2000, GE had
assets under management of approximately $124 billion. The name, and principal
occupation of the principal executive officer and each director of GE is as
appears below. The address of each person is 3003 Summer Street, Stamford, CT
06905.
NAME TITLE
---- -----
John H. Myers Chairman & President
Eugene K. Bolton Executive Vice President
Michael J. Cosgrove Executive Vice President
Alan M. Lewis Executive Vice President
Ralph R. Layman Executive Vice President
Robert A. MacDougall Executive Vice President
Geoffrey R. Norman Executive Vice President
Donald W. Torey Executive Vice President
GE does not currently advise a registered mutual fund with an investment
objective similar to that which GE will pursue in managing a portion of the
assets of the Equity Portfolio. The proposed subadvisory contract with GE is
attached hereto as Exhibit A.
The proposed subadvisory agreement, in brief, provides that:
o as compensation for GE's services, PIFM will pay GE a fee equal, on an
annualized basis, to the following:
0.30 of 1% on the first $50 million of the average net assets under
GE's management; and
0.20 of 1% on the next $250 million of the average net assets under
GE's management; and
0.15 of 1% over $300 million under GE's management.
o GE will provide day-to-day management of the Portfolio's investments
and otherwise determine what investments the Portfolio will purchase,
retain, and sell.
4
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o GE will select brokers to effect trades for the Portfolio, and may pay
a higher commission to a broker that provides bona fide research
services.
o GE will maintain certain books and records on behalf of the Portfolio.
o PIFM may replace GE as subadviser or amend the subadvisory agreement
without obtaining shareholder approval.
o PIFM will determine the allocation of assets among the Portfolio's
subadvisers.
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with GE to
shareholders was approved by the Board of Directors of the Fund, and all of the
independent directors, on November 28, 2000. The Board received materials
relating to the proposed subadvisory agreement in advance of the meeting at
which the proposed subadvisory agreement was considered, and had the opportunity
to ask questions and request further information in connection with such
consideration. The Board gave primary consideration to GE's past investment
performance, including particularly how that performance ranked on a
risk-adjusted basis. In addition, the Board considered that the fees to be paid
to GE are consistent with industry norms.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
5
<PAGE>
PROPOSAL 10
PROPOSED SUBADVISORY AGREEMENT BETWEEN PIFM AND SALOMON BROTHERS ASSET
MANAGEMENT INC.
In proposal 5(b) within the Main Proxy Statement, shareholders of the Fund's
Equity Portfolio are being asked to vote upon a subadvisory agreement between
PIFM and Jennison Associates LLC (Jennison). Here, we are asking shareholders of
the Fund's Equity Portfolio to vote on a subadvisory agreement between PIFM and
Salomon Brothers Asset Management Inc. (SB), under which SB would serve as
subadviser to a portion of the assets (approximately 25%) of the Equity
Portfolio. If this proposed contract is approved, and proposal 5(b) within the
Main Proxy Statement also is approved by Equity Portfolio shareholders, then
PIFM will employ both Jennison and SB as subadvisers to the Equity Portfolio. GE
Asset Management Incorporated will subadvise a portion of the Equity Portfolio
if Proposal 9 within this Supplementary Statement is approved. The proposed
subadvisory agreement with SB is attached as Exhibit B.
SB, an independent U.S. registered investment adviser since 1989, is located at
7 World Trade Center, New York, NY 10048. It is a wholly-owned subsidiary of
Salomon Smith Barney Holdings Inc., a subsidiary of Citigroup Inc. SB is part of
SSB Citi Asset Management Group, the global asset management arm of Citigroup
Inc. that managed approximately $396 billion in total assets as of September 30,
2000. The name, and principal occupation of the principal executive officer and
each director of SB is as appears below. The address of each person is7 World
Trade Center, New York, NY 10048.
NAME TITLE
---- -----
Virgil H. Cummings Director
Ross S. Margolies Managing Director
Wendy Murdock Executive Vice President, Salomon
Smith Barney Inc.
Peter J. Wilby Managing Director
The following tables set out comparable mutual funds for which SB serves as
investment adviser, and indicates the size of each such fund as well as the rate
of SB's compensation.
<TABLE>
<CAPTION>
SERIES FUND COMPARABLE SB APPROXIMATE ASSETS OF ADVISORY FEE FOR COMPARABLE
PORTFOLIO ADVISED FUND COMPARABLE FUND AS OF FUND
----------- ------------ 9/30/00 ----
-------
<S> <C> <C> <C>
Equity Salomon Brothers $1,896.5 million 0.65% to $350 million
Portfolio Fund 0.55% next $150 million
0.525% next $250 million
0.50% next $250 million
0.45% over $1 billion*
</TABLE>
* This compensation is adjusted up or down through a "fulcrum fee" formula,
which adjusts SB's compensation according to whether the Fund outperformed or
underperformed the S&P 500 Index.
SB also manages the following, the advisory fee for which is paid according to
the fees indicated.
6
<PAGE>
<TABLE>
<CAPTION>
SERIES FUND COMPARABLE SB APPROXIMATE ASSETS OF ADVISORY FEE FOR COMPARABLE
PORTFOLIO ADVISED FUND COMPARABLE FUND AS OF FUND
----------- ------------- 9/30/00 ----
-------
<S> <C> <C> <C>
Equity Smith Barney Large $525.6 million 65 basis points annually.
Portfolio Cap Blend Fund
Equity Smith Barney Growth & $1,475.0 million 65 basis points annually.
Portfolio Income Fund
Equity Smith Barney Concert $13.9 million 75 basis points annually.
Portfolio Series Investment
Growth & Income Fund
Equity Smith Barney $17.8 million 45 basis points annually.
Portfolio Greenwich Street
Growth & Income Fund
</TABLE>
The proposed subadvisory agreement, in brief, provides that:
o as compensation for SB's services, PIFM will pay SB a fee equal, on an
annualized basis, to the following:
0.40 of 1% of the first $50 million of the average net assets under
SB's management; and
0.30 of 1% of the next $250 million of the average net assets under
SB's management; and
0.155 of 1% over $300 million under SB's management.
o SB will provide day-to-day management of the Portfolio's investments
and otherwise determine what investments the Portfolio will purchase,
retain, and sell.
o SB will select brokers to effect trades for the Portfolio, and may pay
a higher commission to a broker that provides bona fide research
services.
o SB will maintain certain books and records on behalf of the Portfolio.
o PIFM may replace SB as subadviser or amend the subadvisory agreement
without obtaining shareholder approval.
o PIFM will determine the allocation of assets among the Portfolio's
subadvisers.
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with SB to
shareholders was approved by the Board of Directors of the Fund, and all of the
independent directors, on November 28, 2000. The Board received materials
relating to the proposed subadvisory agreement in advance of the meeting at
which the proposed subadvisory agreement was considered, and had the opportunity
to ask questions and request further information in connection with such
consideration. The Board gave primary consideration to SB's past investment
performance, including particularly how that performance ranked on a
risk-adjusted basis. In addition, the Board considered that the fees to be paid
to SB are consistent with industry norms.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
7
<PAGE>
PROPOSAL 11
PROPOSED SUBADVISORY AGREEMENT BETWEEN PIFM AND DEUTSCHE ASSET MANAGEMENT INC.
In proposal 5(b) within the Main Proxy Statement, shareholders of the Fund's
Equity Income Portfolio are being asked to vote upon a subadvisory agreement
between Prudential Investments Fund Management (PIFM) and Jennison Associates
LLC (Jennison). Here, we are asking shareholders of the Fund's Equity Income
Portfolio to vote on a subadvisory agreement between PIFM and Deutsche Asset
Management Inc. (Deutsche), under which Deutsche would serve as subadviser to a
portion of the assets (approximately 25%) of the Equity Income Portfolio. If
this proposed contract is approved, and proposal 5(b) within the Main Proxy
Statement also is approved by Equity Income Portfolio shareholders, then PIFM
will employ both Jennison and Deutsche as subadvisers to the Equity Income
Portfolio. If shareholders approve Proposal 12 within this Supplementary
Statement, then Key Asset Management Inc. will subadvise a portion of the assets
of the Equity Income Portfolio. The proposed agreement with Deutsche is attached
as Exhibit C.
Deutsche, located at 130 Liberty Street, New York, NY 10006, is one of five
business units of The Deutsche Bank Group, which has more than 125 years of
global investment experience and has employees in more than 50 countries.
Deutsche is owned by Deutsche Asset Management Holdings, BV, and is indirectly
owned by Deutsche Asset Management Group Limited. Deutsche is the successor
organization to Morgan Grenfell, Inc., and has approximately $17.4 billion of
assets under management.
The name, and principal occupation of the principal executive officer and each
director of Deutsche is as appears below. The address of each person is 130
Liberty Street, New York, NY 10006.
NAME TITLE(S)
---- --------
Joshua A. Weinreich Director, Chairman
Dean Barr President, CIO
David Westover Baldt Director, Executive Vice President
Audrey Mary Theresa Jones Director, Executive Vice President
Deutsche does not currently advise a registered fund with an investment
objective similar to that which Deutsche will pursue in managing a portion of
the assets of the Equity Income Portfolio.
The Proposed Subadvisory Agreement, in brief, provides that:
o as compensation for Deutsche's services, PIFM will pay Deutsche a fee
equal, on an annualized basis, to the following:
0.29 of 1% on the first $50 million of the average net assets under
Deutsche's management, and
0.23 of 1% on the next $250 million of the average net assets under
Deutsche's management, and
0.15 of 1% over $300 million under Deutsche's management.
o Deutsche will provide day-to-day management of the Portfolio's
investments and otherwise determine what investments the Portfolio
will purchase, retain, and sell.
o Deutsche will select brokers to effect trades for the Portfolio, and
may pay a higher commission to a broker that provides bona fide
research services.
8
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o Deutsche will maintain certain books and records on behalf of the
Portfolio.
o PIFM may replace Deutsche as subadviser or amend the subadvisory
agreement without obtaining shareholder approval.
o PIFM will determine the allocation of assets among the Portfolio's
subadvisers.
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with Deutsche to
shareholders was approved by the Board of Directors of the Fund, and all of the
independent directors, on November 28, 2000. The Board received materials
relating to the proposed subadvisory agreement in advance of the meeting at
which the proposed subadvisory agreement was considered, and had the opportunity
to ask questions and request further information in connection with such
consideration. The Board gave primary consideration to Deutsche's past
investment performance, including particularly how that performance ranked on a
risk-adjusted basis. In addition, the Board considered that the fees to be paid
to Deutsche are consistent with industry norms.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
9
<PAGE>
PROPOSAL 12
PROPOSED SUBADVISORY AGREEMENT BETWEEN PIFM AND KEY ASSET MANAGEMENT INC.
In proposal 5(b) within the Main Proxy Statement, shareholders of the Fund's
Equity Income Portfolio are being asked to vote upon a subadvisory agreement
between PIFM and Jennison Associates LLC (Jennison). Here, we are asking
shareholders of the Fund's Equity Income Portfolio to vote on a subadvisory
agreement between PIFM and Key Asset Management Inc. (Key), under which Key
would serve as subadviser to a portion of the assets (approximately 25%) of the
Equity Income Portfolio. If this proposed contract is approved, and proposal
5(b) within the Main Proxy Statement also is approved by Equity Income Portfolio
shareholders, then PIFM will employ both Jennison and Key as subadvisers to the
Equity Income Portfolio. If shareholders approve Proposal 11 within this
Supplementary Statement, then Deutsche Asset Management Inc. will subadvise a
portion of the assets of the Equity Income Portfolio. The proposed subadvisory
agreement with Key is attached as Exhibit D.
Key, located at 127 Public Square, Cleveland, OH 44114, is a wholly-owned
subsidiary of KeyCorp. Key is one of the large registered investment advisers in
the United States, managing in excess of $71 billion. Together with its
predecessor firms, Society Bank and Ameritrust, Key has been managing assets
since 1912.
The name, and principal occupation of the principal executive officer and each
director of Key is as appears below. The address of each person is 127 Public
Square, Cleveland, OH 44114.
NAME TITLE (S)
---- ---------
William G. Spears Chairman, Director, Senior
Managing Director
Richard J. Buoncore Director, President, CEO,
Senior Managing Director
James D. Kacic CFO, CAO, Senior
Managing Director
Anthony Aveni CIO, Director, Senior
Managing Director
Vincent Farrell CIO, Senior Managing
Director
Bradley E. Turner COO, Director, Senior
Managing Director
Robert B. Heisler, Jr. Director
Robert T. Clutterbuck Director
The following table sets out a comparable mutual fund for which Key serves as
investment adviser, and indicates the size of that fund as well as the rate of
Key's compensation.
<TABLE>
<CAPTION>
SERIES FUND COMPARABLE KEY APPROXIMATE ASSETS OF ADVISORY FEE FOR COMPARABLE
PORTFOLIO ADVISED FUND COMPARABLE FUND AS OF FUND
--------- ------------ 11/27/00 ----
--------
<S> <C> <C> <C>
Equity Income INDOCAM US $148.3 million 0.45%
Portfolio Value Fund
</TABLE>
10
<PAGE>
The Proposed Subadvisory Agreement, in brief, provides that:
o as compensation for Key's services, PIFM will pay Key a fee equal, on
an annualized basis, to the following:
0.29 of 1% on the first $50 million of the average net assets under
Key's management; and
0.23 of 1% on the next $250 million of the average net assets under
Key's management; and
0.15 of 1% over $300 million under Key's management.
o Key will provide day-to-day management of the Portfolio's investments
and otherwise determine what investments the Portfolio will purchase,
retain, and sell.
o Key will select brokers to effect trades for the Portfolio, and may
pay a higher commission to a broker that provides bona fide research
services.
o Key will maintain certain books and records on behalf of the
Portfolio.
o PIFM may replace Key as subadviser or amend the subadvisory agreement
without obtaining shareholder approval.
o PIFM will determine the allocation of assets among the Portfolio's
subadvisers.
MATTERS CONSIDERED BY THE BOARD
The proposal to present the proposed subadvisory agreement with Key to
shareholders was approved by the Board of Directors of the Fund, and all of the
independent directors, on November 28, 2000. The Board received materials
relating to the proposed subadvisory agreement in advance of the meeting at
which the proposed subadvisory agreement was considered, and had the opportunity
to ask questions and request further information in connection with such
consideration. The Board gave primary consideration to Key's past investment
performance, including particularly how that performance ranked on a
risk-adjusted basis. In addition, the Board considered that the fees to be paid
to Key are consistent with industry norms.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
INTEREST OF FUND DIRECTORS, DIRECTOR/NOMINEES, AND OFFICERS IN PROPOSALS 9-12
With respect to the current Fund directors, those nominated to become Fund
directors, and the officers of the Fund (collectively, "Directors/Officers"),
none of such individuals currently holds an office with, or is employed by,
either GE, SB, Deutsche, or Key. Nor does any such Director/Officer own more
than 1,000 shares of any such subadvisor or its affiliates (as defined by SEC
proxy rules). Mr. LaBlanc is a former partner of Salomon Brothers who, along
with his wife, currently participates in a pooled investment vehicle managed by
SB and invested in New Jersey municipal obligations. Key Bank, an affiliate of
Key, has made available $34 million in short and medium-term loans to Carlisle
Companies Inc., of which Mr. Munn is Chairman.
11
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EXHIBIT A
THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 1st day of February 2001 between Prudential
Investments Fund Management LLC (PIFM or the Manager) and GE Asset Management
Incorporated (the Subadviser or GE).
WHEREAS, the Manager has entered into a Management Agreement, dated
September 7, 2000 (the Management Agreement), with The Prudential Series Fund,
Inc. (the Fund), a Maryland corporation and a diversified, open-end management
investment company registered under the Investment Company Act of 1940 (the 1940
Act), pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto, if any (individually and collectively, with the Fund,
referred to herein as the Fund) and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Subadviser is willing to render
such investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors/Trustees of the Fund, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus(es) (such
Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of
the Fund's investments as the Manager shall direct and shall determine
from time to time what investments and securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the assets
will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Manager and of the Board of
Directors/Trustees of the Fund, and will conform to and comply with
the requirements of the 1940 Act, the Internal Revenue Code of 1986
and all other applicable federal and state laws and regulations. In
connection therewith, the Subadviser shall, among other things,
prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by such portion of each Fund's
series, as applicable, and will place orders with or through such
persons, brokers, dealers or futures commission merchants (including
but not limited to Prudential Securities Incorporated [or any
A-1
<PAGE>
broker or dealer affiliated with the Subadviser]) to carry out the
policy with respect to brokerage as set forth in the Fund's Prospectus
or as the Board of Directors/Trustees may direct from time to time. In
providing the Fund with investment supervision, it is recognized that
the Subadviser will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of this
policy, the Subadviser may consider the financial responsibility,
research and investment information and other services provided by
brokers, dealers or futures commission merchants who may effect or be
a party to any such transaction or other transactions to which the
Subadviser's other clients may be a party. It is understood that
Prudential Securities Incorporated [or any broker or dealer affiliated
with the Subadviser] may be used as principal broker for securities
transactions, but that no formula has been adopted for allocation of
the Fund's investment transaction business. It is also understood that
it is desirable for the Fund that the Subadviser have access to
supplemental investment and market research and security and economic
analysis provided by brokers or futures commission merchants who may
execute brokerage transactions at a higher cost to the Fund than may
result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore,
the Subadviser is authorized to place orders for the purchase and sale
of securities and futures contracts for the Fund with such brokers or
futures commission merchants, subject to review by the Fund's Board of
Directors/Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services
provided by such brokers or futures commission merchants may be useful
to the Subadviser in connection with the Subadviser's services to
other clients.
On occasions when the Subadviser deems the purchase or sale of a
security or futures contract to be in the best interest of the Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities or futures contracts to be
sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities or futures contracts so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by the Subadviser in the manner the Subadviser considers to be
the most equitable and consistent with its fiduciary obligations to
the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Fund's Board of
Directors/Trustees such periodic and special reports as the
Directors/Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Directors/Trustees or officers or employees of the Fund
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's
A-2
<PAGE>
assets it manages, and shall provide the Manager with such information
upon request of the Manager.
(vi) The investment management services provided by the
Subadviser hereunder are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others.
Conversely, Subadviser and Manager understand and agree that if the
Manager manages the Fund in a "manager-of-managers" style, the Manager
will, among other things, (i) continually evaluate the performance of
the Subadviser to each of the Fund's separate series through
quantitative and qualitative analysis and consultations with such
Subadviser (ii) periodically make recommendations to the Fund's Board
as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to the
Fund's Board regarding the results of its evaluation and monitoring
functions. Subadviser recognizes that its services may be terminated
or modified pursuant to this process.
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors or officers of the
Fund to serve in the capacities in which they are elected. Services to be
furnished by the Subadviser under this Agreement may be furnished through
the medium of any of such directors, officers or employees.
(c) The Subadviser shall keep the Fund's books and records required to
be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall
timely furnish to the Manager all information relating to the Subadviser's
services hereunder needed by the Manager to keep the other books and
records of the Series required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records which it maintains for the Series are
the property of the Fund, and the Subadviser will surrender promptly to the
Fund any of such records upon the Fund's request, provided, however, that
the Subadviser may retain a copy of such records. The Subadviser further
agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940 and other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and (ii)
the maintenance of compliance procedures pursuant to paragraph 1(d) hereof
as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement.
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation therefor, a
fee equal to the percentage of the Fund's average daily net assets managed by
the Subadviser as described in the attached Schedule A.
A-3
<PAGE>
4. The Subadviser shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Manager in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Subadviser's part in the performance of its
duties or from its reckless disregard of its obligations and duties under this
Agreement.
5. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Board of Directors/Trustees of
the Fund or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, or by the Manager or the Subadviser at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act) or
upon the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Subadviser's directors, officers or employees who may also be a
Director/Trustee, officer or employee of the Fund to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or a dissimilar nature, nor
limit or restrict the Subadviser's right to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. During the term of this Agreement, the Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Subadviser in any
way, prior to use thereof and not to use material if the Subadviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. Sales literature may be furnished to the
Subadviser hereunder by first-class or overnight mail, facsimile transmission
equipment or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of the
Fund must be obtained in conformity with the requirements of the 1940 Act.
9. This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
BY: ___________________________
Robert F. Gunia
Executive Vice President
GE ASSET MANAGEMENT INCORPORATED
BY: ____________________________
A-4
<PAGE>
SCHEDULE A
----------
SERIES FUND EQUITY PORTFOLIO
PRUDENTIAL EQUITY FUND
As compensation for GE's services, PIFM will pay GE a fee equal, on an
annualized basis, to the following:
0.30 of 1% on the first $50 million of the average net assets under GE's
management; and
0.20 of 1% on the next $250 million of the average net assets under GE's
management; and
0.15 of 1% over $300 million under GE's management.
For purposes of computing the fees set out above, PIFM will aggregate the assets
of the Series Fund Equity Portfolio and Prudential Equity Fund that are under
GE's management.
A-5
<PAGE>
EXHIBIT B
THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 1st day of February 2001 between Prudential
Investments Fund Management LLC (PIFM or the Manager) and Salomon Brothers Asset
Management Inc. (the Subadviser or SB).
WHEREAS, the Manager has entered into a Management Agreement, dated
September 7, 2000 (the Management Agreement), with The Prudential Series Fund,
Inc. (the Fund), a Maryland corporation and a diversified, open-end management
investment company registered under the Investment Company Act of 1940 (the 1940
Act), pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto, if any (individually and collectively, with the Fund,
referred to herein as the Fund) and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Subadviser is willing to render
such investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors/Trustees of the Fund, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus(es) (such
Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of
the Fund's investments as the Manager shall direct and shall determine
from time to time what investments and securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the assets
will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Manager and of the Board of
Directors of the Fund, and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986 and
all other applicable federal and state laws and regulations. In
connection therewith, the Subadviser shall, among other things,
prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by such portion of each Fund's
series, as applicable, and will place orders with or through such
persons, brokers, dealers or futures commission merchants (including
but not limited to Prudential Securities Incorporated [or any broker
or dealer affiliated with the Subadviser]) to carry out the policy
with respect to
B-1
<PAGE>
brokerage as set forth in the Fund's Prospectus or as the Board of
Directors/Trustees may direct from time to time. In providing the Fund
with investment supervision, it is recognized that the Subadviser will
give primary consideration to securing the most favorable price and
efficient execution. Within the framework of this policy, the
Subadviser may consider the financial responsibility, research and
investment information and other services provided by brokers, dealers
or futures commission merchants who may effect or be a party to any
such transaction or other transactions to which the Subadviser's other
clients may be a party. It is understood that Prudential Securities
Incorporated [or any broker or dealer affiliated with the Subadviser]
may be used as principal broker for securities transactions, but that
no formula has been adopted for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for
the Fund that the Subadviser have access to supplemental investment
and market research and security and economic analysis provided by
brokers or futures commission merchants who may execute brokerage
transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Subadviser is
authorized to place orders for the purchase and sale of securities and
futures contracts for the Fund with such brokers or futures commission
merchants, subject to review by the Fund's Board of Directors/Trustees
from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers
or futures commission merchants may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of a
security or futures contract to be in the best interest of the Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities or futures contracts to be
sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities or futures contracts so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by the Subadviser in the manner the Subadviser considers to be
the most equitable and consistent with its fiduciary obligations to
the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Fund's Board of
Directors/Trustees such periodic and special reports as the
Directors/Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Directors/Trustees or officers or employees of the Fund
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's assets it manages, and shall provide the
Manager with such information upon request of the Manager.
B-2
<PAGE>
(vi) The investment management services provided by the
Subadviser hereunder are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others.
Conversely, Subadviser and Manager understand and agree that if the
Manager manages the Fund in a "manager-of-managers" style, the Manager
will, among other things, (i) continually evaluate the performance of
the Subadviser to each of the Fund's separate series through
quantitative and qualitative analysis and consultations with such
Subadviser (ii) periodically make recommendations to the Fund's Board
as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to the
Fund's Board regarding the results of its evaluation and monitoring
functions. Subadviser recognizes that its services may be terminated
or modified pursuant to this process.
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors or officers of the
Fund to serve in the capacities in which they are elected. Services to be
furnished by the Subadviser under this Agreement may be furnished through
the medium of any of such directors, officers or employees.
(c) The Subadviser shall keep the Fund's books and records required to
be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall
timely furnish to the Manager all information relating to the Subadviser's
services hereunder needed by the Manager to keep the other books and
records of the Series required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records which it maintains for the Series are
the property of the Fund, and the Subadviser will surrender promptly to the
Fund any of such records upon the Fund's request, provided, however, that
the Subadviser may retain a copy of such records. The Subadviser further
agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940 and other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and (ii)
the maintenance of compliance procedures pursuant to paragraph 1(d) hereof
as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement.
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation therefor, a
fee equal to the percentage of the Fund's average daily net assets managed by
the Subadviser as described in the attached Schedule A.
4. The Subadviser shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Manager in connection with the matters to which
this Agreement relates, except
B-3
<PAGE>
a loss resulting from willful misfeasance, bad faith or gross negligence on the
Subadviser's part in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement.
5. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Board of Directors/Trustees of
the Fund or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, or by the Manager or the Subadviser at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act) or
upon the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Subadviser's directors, officers or employees who may also be a
Director/Trustee, officer or employee of the Fund to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or a dissimilar nature, nor
limit or restrict the Subadviser's right to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. During the term of this Agreement, the Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Subadviser in any
way, prior to use thereof and not to use material if the Subadviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. Sales literature may be furnished to the
Subadviser hereunder by first-class or overnight mail, facsimile transmission
equipment or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of the
Fund must be obtained in conformity with the requirements of the 1940 Act.
9. This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
BY: ______________________________________
Robert F. Gunia
Executive Vice President
SALOMON BROTHERS ASSET MANAGEMENT INC.
BY: ______________________________________
B-4
<PAGE>
SCHEDULE A
----------
EQUITY PORTFOLIO
PRUDENTIAL EQUITY FUND
As compensation for SB's services, PIFM will pay SB a fee equal, on an
annualized basis, to the following:
0.40 of 1% of the first $50 million of the average net assets under SB's
management; and
0.30 of 1% of the next $250 million of the average net assets under SB's
management; and
0.155 of 1% over $300 million under SB's management.
For purposes of computing the fees set out above, PIFM will aggregate the assets
of the Series Fund Equity Portfolio and Prudential Equity Fund that are under
SB's management.
B-5
<PAGE>
EXHIBIT C
THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 1st day of February 2001 between Prudential
Investments Fund Management LLC (PIFM or the Manager) and Deutsche Asset
Management Inc. (the Subadviser or Deutsche).
WHEREAS, the Manager has entered into a Management Agreement, dated
September 7, 2000 (the Management Agreement), with The Prudential Series Fund,
Inc. (the Fund), a Maryland corporation and a diversified, open-end management
investment company registered under the Investment Company Act of 1940 (the 1940
Act), pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto, if any (individually and collectively, with the Fund,
referred to herein as the Fund) and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Subadviser is willing to render
such investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors/Trustees of the Fund, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus(es) (such
Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of
the Fund's investments as the Manager shall direct and shall determine
from time to time what investments and securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the assets
will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Manager and of the Board of
Directors/Trustees of the Fund, and will conform to and comply with
the requirements of the 1940 Act, the Internal Revenue Code of 1986
and all other applicable federal and state laws and regulations. In
connection therewith, the Subadviser shall, among other things,
prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by such portion of each Fund's
series, as applicable, and will place orders with or through such
persons, brokers, dealers or futures commission merchants (including
but not limited to Prudential Securities Incorporated [or any broker
or dealer affiliated with the Subadviser]) to carry out the policy
with respect to
C-1
<PAGE>
brokerage as set forth in the Fund's Prospectus or as the Board of
Directors/Trustees may direct from time to time. In providing the Fund
with investment supervision, it is recognized that the Subadviser will
give primary consideration to securing the most favorable price and
efficient execution. Within the framework of this policy, the
Subadviser may consider the financial responsibility, research and
investment information and other services provided by brokers, dealers
or futures commission merchants who may effect or be a party to any
such transaction or other transactions to which the Subadviser's other
clients may be a party. It is understood that Prudential Securities
Incorporated [or any broker or dealer affiliated with the Subadviser]
may be used as principal broker for securities transactions, but that
no formula has been adopted for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for
the Fund that the Subadviser have access to supplemental investment
and market research and security and economic analysis provided by
brokers or futures commission merchants who may execute brokerage
transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Subadviser is
authorized to place orders for the purchase and sale of securities and
futures contracts for the Fund with such brokers or futures commission
merchants, subject to review by the Fund's Board of Directors/Trustees
from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers
or futures commission merchants may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of a
security or futures contract to be in the best interest of the Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities or futures contracts to be
sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities or futures contracts so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by the Subadviser in the manner the Subadviser considers to be
the most equitable and consistent with its fiduciary obligations to
the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Fund's Board of
Directors/Trustees such periodic and special reports as the
Directors/Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Directors/Trustees or officers or employees of the Fund
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's assets it manages, and shall provide the
Manager with such information upon request of the Manager.
C-2
<PAGE>
(vi) The investment management services provided by the
Subadviser hereunder are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others.
Conversely, Subadviser and Manager understand and agree that if the
Manager manages the Fund in a "manager-of-managers" style, the Manager
will, among other things, (i) continually evaluate the performance of
the Subadviser to each of the Fund's separate series through
quantitative and qualitative analysis and consultations with such
Subadviser (ii) periodically make recommendations to the Fund's Board
as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to the
Fund's Board regarding the results of its evaluation and monitoring
functions. Subadviser recognizes that its services may be terminated
or modified pursuant to this process.
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors/Trustees or officers
of the Fund to serve in the capacities in which they are elected. Services
to be furnished by the Subadviser under this Agreement may be furnished
through the medium of any of such directors, officers or employees.
(c) The Subadviser shall keep the Fund's books and records required to
be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall
timely furnish to the Manager all information relating to the Subadviser's
services hereunder needed by the Manager to keep the other books and
records of the Series required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records which it maintains for the Series are
the property of the Fund, and the Subadviser will surrender promptly to the
Fund any of such records upon the Fund's request, provided, however, that
the Subadviser may retain a copy of such records. The Subadviser further
agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940 and other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and (ii)
the maintenance of compliance procedures pursuant to paragraph 1(d) hereof
as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement.
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation therefor, a
fee equal to the percentage of the Fund's average daily net assets managed by
the Subadviser as described in the attached Schedule A.
4. The Subadviser shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Manager in connection with the matters to which
this Agreement relates, except
C-3
<PAGE>
a loss resulting from willful misfeasance, bad faith or gross negligence on the
Subadviser's part in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement.
5. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Board of Directors/Trustees of
the Fund or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, or by the Manager or the Subadviser at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act) or
upon the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Subadviser's directors, officers or employees who may also be a
Director/Trustee, officer or employee of the Fund to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or a dissimilar nature, nor
limit or restrict the Subadviser's right to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. During the term of this Agreement, the Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Subadviser in any
way, prior to use thereof and not to use material if the Subadviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. Sales literature may be furnished to the
Subadviser hereunder by first-class or overnight mail, facsimile transmission
equipment or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of the
Fund must be obtained in conformity with the requirements of the 1940 Act.
9. This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
BY: ______________________________________
Robert F. Gunia
Executive Vice President
DEUTSCHE ASSET MANAGEMENT INC.
BY:________________________________________
C-4
<PAGE>
SCHEDULE A
----------
SERIES FUND PRUDENTIAL VALUE PORTFOLIO
(FORMERLY, EQUITY INCOME PORTFOLIO)
PRUDENTIAL VALUE FUND
As compensation for Deutsche's services, PIFM will pay Deutsche a fee equal, on
an annualized basis, to the following:
0.29 of 1% on the first $50 million of the average net assets under Deutsche's
management, and
0.23 of 1% on the next $250 million of the average net assets under Deutsche's
management, and
0.15 of 1% over $300 million under Deutsche's management.
For purposes of computing the fees set out above, PIFM will aggregate the assets
of the Series Fund Prudential Value Portfolio and Prudential Value Fund under
Deutsche's management.
C-5
<PAGE>
EXHIBIT D
THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 1st day of February 2001 between Prudential
Investments Fund Management LLC (PIFM or the Manager) and Key Asset Management
Inc. (the Subadviser or Key).
WHEREAS, the Manager has entered into a Management Agreement, dated
September 7, 2000 (the Management Agreement), with The Prudential Series Fund,
Inc. (the Fund), a Maryland corporation and a diversified, open-end management
investment company registered under the Investment Company Act of 1940 (the 1940
Act) [and Value Fund], pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto, if any (individually and collectively, with the Fund,
referred to herein as the Fund) and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Subadviser is willing to render
such investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors/Trustees of the Fund, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and shall
manage the composition of the Fund's portfolio(s), including the purchase,
retention and disposition thereof, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus(es) (such
Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of
the Fund's investments as the Manager shall direct and shall determine
from time to time what investments and securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the assets
will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Manager and of the Board of
Directors/Trustees of the Fund, and will conform to and comply with
the requirements of the 1940 Act, the Internal Revenue Code of 1986
and all other applicable federal and state laws and regulations. In
connection therewith, the Subadviser shall, among other things,
prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by such portion of each Fund's
series, as applicable, and will place orders with or through such
persons, brokers, dealers or futures commission merchants (including
but not limited to Prudential Securities Incorporated [or any broker
or dealer affiliated with the Subadviser]) to carry out the policy
with respect to
D-1
<PAGE>
brokerage as set forth in the Fund's Prospectus or as the Board of
Directors/Trustees may direct from time to time. In providing the Fund
with investment supervision, it is recognized that the Subadviser will
give primary consideration to securing the most favorable price and
efficient execution. Within the framework of this policy, the
Subadviser may consider the financial responsibility, research and
investment information and other services provided by brokers, dealers
or futures commission merchants who may effect or be a party to any
such transaction or other transactions to which the Subadviser's other
clients may be a party. It is understood that Prudential Securities
Incorporated [or any broker or dealer affiliated with the Subadviser]
may be used as principal broker for securities transactions, but that
no formula has been adopted for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for
the Fund that the Subadviser have access to supplemental investment
and market research and security and economic analysis provided by
brokers or futures commission merchants who may execute brokerage
transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Subadviser is
authorized to place orders for the purchase and sale of securities and
futures contracts for the Fund with such brokers or futures commission
merchants, subject to review by the Fund's Board of Directors/Trustees
from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers
or futures commission merchants may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of a
security or futures contract to be in the best interest of the Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities or futures contracts to be
sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities or futures contracts so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by the Subadviser in the manner the Subadviser considers to be
the most equitable and consistent with its fiduciary obligations to
the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Fund's Board of
Directors/Trustees such periodic and special reports as the
Directors/Trustees may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Directors/Trustees or officers or employees of the Fund
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's assets it manages, and shall provide the
Manager with such information upon request of the Manager.
D-2
<PAGE>
(vi) The investment management services provided by the
Subadviser hereunder are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others.
Conversely, Subadviser and Manager understand and agree that if the
Manager manages the Fund in a "manager-of-managers" style, the Manager
will, among other things, (i) continually evaluate the performance of
the Subadviser to each of the Fund's separate series through
quantitative and qualitative analysis and consultations with such
Subadviser (ii) periodically make recommendations to the Fund's Board
as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to the
Fund's Board regarding the results of its evaluation and monitoring
functions. Subadviser recognizes that its services may be terminated
or modified pursuant to this process.
(b) The Subadviser shall authorize and permit any of its directors,
officers and employees who may be elected as Directors/Trustees or officers
of the Fund to serve in the capacities in which they are elected. Services
to be furnished by the Subadviser under this Agreement may be furnished
through the medium of any of such directors, officers or employees.
(c) The Subadviser shall keep the Fund's books and records required to
be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall
timely furnish to the Manager all information relating to the Subadviser's
services hereunder needed by the Manager to keep the other books and
records of the Series required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records which it maintains for the Series are
the property of the Fund, and the Subadviser will surrender promptly to the
Fund any of such records upon the Fund's request, provided, however, that
the Subadviser may retain a copy of such records. The Subadviser further
agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940 and other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and (ii)
the maintenance of compliance procedures pursuant to paragraph 1(d) hereof
as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement.
3. For the services provided and the expenses assumed pursuant to this
Agreement, the Manager shall pay the Subadviser as full compensation therefor, a
fee equal to the percentage of the Fund's average daily net assets managed by
the Subadviser as described in the attached Schedule A.
4. The Subadviser shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Manager in connection with the matters to which
this Agreement relates, except
D-3
<PAGE>
a loss resulting from willful misfeasance, bad faith or gross negligence on the
Subadviser's part in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement.
5. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Board of Directors/Trustees of
the Fund or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, or by the Manager or the Subadviser at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act) or
upon the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Subadviser's directors, officers or employees who may also be a
Director/Trustee, officer or employee of the Fund to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or a dissimilar nature, nor
limit or restrict the Subadviser's right to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. During the term of this Agreement, the Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Subadviser in any
way, prior to use thereof and not to use material if the Subadviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. Sales literature may be furnished to the
Subadviser hereunder by first-class or overnight mail, facsimile transmission
equipment or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of the
Fund must be obtained in conformity with the requirements of the 1940 Act.
9. This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
BY: ______________________________________
Robert F. Gunia
Executive Vice President
KEY ASSET MANAGEMENT INC.
BY: ______________________________________
D-4
<PAGE>
SCHEDULE A
----------
SERIES FUND PRUDENTIAL VALUE PORTFOLIO
(FORMERLY, EQUITY INCOME PORTFOLIO)
PRUDENTIAL VALUE FUND
As compensation for Key's services, PIFM will pay Key a fee equal, on an
annualized basis, to the following:
0.29 of 1% on the first $50 million of the average net assets under Key's
management; and
0.23 of 1% on the next $250 million of the average net assets under Key's
management; and
0.15 of 1% over $300 million under Key's management.
For purposes of computing the fees set out above, PIFM will aggregate the assets
of the Series Fund Prudential Value Portfolio and Prudential Value Fund under
Key's management.
D-5
<PAGE>
THE PRUDENTIAL SERIES FUND, INC.
EQUITY PORTFOLIO AND EQUITY INCOME PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 2001
As of November 17, 2000, the Record Date, you were entitled to give voting
instructions to your Insurance Company (the "Company") relative to the
proposals, as described in the accompanying Proxy Statement and Proxy Statement
Supplement, to be voted upon at the Special Meeting of Shareholders of The
Prudential Series Fund, Inc. (the "Fund") to be held on January 31, 2001 for
each of your investment positions as represented by the enclosed Voting
Instruction Forms.
The Company will vote the appropriate number of Fund shares pursuant to the
instructions given. If no choice is made as to any or all of Proposals 1 through
12, the Company will vote "FOR" any such Proposal. With respect to any other
business which may properly come before the meeting, the Company will vote in
accordance with its best judgment. Implementation of Proposal 5(b) is
conditioned on approval of Proposal 4. For Proposals 3, 4, 5(b), 6, 7, 8, 9, 10,
11 and 12, you are entitled to vote on a portfolio-by-portfolio basis, using the
enclosed Voting Instruction Forms.
To execute your voting instructions:
o Sign and date each Voting Instruction Form.
o Mark your instructions on the reverse side of the form. NOTE: If you
wish to vote "FOR" all proposals, as the Board of Directors recommends,
simply fill in the box on the front of the form.
o Return the Form(s) in the enclosed postage-paid envelope.
o If you wish to vote via the Internet, log on to www.proxyweb.com, enter
the control number shown on the Voting Instruction Form and follow the
instructions. Each form must be voted separately.
o If you wish to vote by touch-tone telephone, dial 1-888-221-0697, enter
the control number on the Voting Instruction Form and follow the voice
prompts. Each form must be voted separately.
NOTE: If you vote by Internet or phone, please do not return your Voting
Instruction Form(s).
YOUR VOTE IS IMPORTANT. TO SAVE THE FUND THE COST OF ADDITIONAL SOLICITATION,
PLEASE VOTE TODAY.
<PAGE>
THE BOARD OF DIRECTORS OF THE PRUDENTIAL SERIES FUND, INC.
RECOMMENDS A VOTE "FOR" ALL PROPOSALS.
================================================================================
NOTE: YOUR VOTING INSTRUCTION FORM IS NOT VALID UNLESS IT IS SIGNED.
PLEASE BE SURE TO SIGN YOUR VOTING INSTRUCTION FORM BELOW.
================================================================================
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-888-221-0697
OR LOG ON TO WWW.PROXYWEB.COM
VOTING INSTRUCTION FORM
VOTING INSTRUCTIONS ARE HEREBY SOLICITED BY THE ABOVE-REFERENCED INSURANCE
COMPANY AND THE BOARD OF DIRECTORS OF THE PRUDENTIAL SERIES FUND, INC. (THE
"FUND") IN CONNECTION WITH A SPECIAL MEETING OF SHAREHOLDERS OF THE FUND TO BE
HELD ON JANUARY 31, 2001 AT THE OFFICES OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, 100 MULBERRY STREET, NEWARK, NEW JERSEY AT 9:00 A.M.
I (we) the undersigned hereby instruct the above-referenced Insurance Company to
vote the Fund shares to which I (we) the undersigned am (are) entitled to give
instructions as indicated on the reverse side of this form or as indicated
below.
I (we) wish to instruct the Company to vote "FOR" all proposals. / /
Date ___________________, 2000 [2001]
Each owner should sign as
his/her name appears on this
form; If a contract is owned
jointly, each owner should
sign; if a contract is held in
a fiduciary capacity, the
fiduciary should sign and
indicate his/her fiduciary
capacity.
--------------------------------
--------------------------------
Signature(s)/Fiduciary Capacity,
if applicable.
PSFE & EI
PRUPSFF
<PAGE>
PLEASE VOTE BY FILLING IN
THE APPROPRIATE BOXES BELOW.
VOTING INSTRUCTION FORM VOTING INSTRUCTION FORM
----------------------- -----------------------
1. To elect as Directors the following FOR WITHHOLD
19 nominees: (01) Eugene C. Dorsey, all nominees authority to
(02) Saul K. Fenster, (03) Delayne listed (except as vote for all
D. Gold, (04) Robert D. Gunia, (05) noted in space nominees
Maurice F. Holmes, (06) Robert E. provided) listed
LeBlanc, (07) Douglas McCorkindale,
(08) W. Scott McDonald, Jr., (09) / / / /
Thomas T. Mooney, (10) Stephen P.
Munn, (11) David R. Odenath, Jr.,
(12) Richard A. Redeker, (13) Judy
A. Rice (14) Robin B. Smith, (15)
Stephen Stoneburn, (16) Nancy H.
Teeters, (17) Joseph Weber, (18)
Louis A. Weil, III, (19) Clay T.
Whitehead
INSTRUCTION: To withhold authority to vote for any individual nominee, write
the name(s) on the line immediately below.
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers as independent / / / / / /
accountants of the Fund.
3. To approve a "managers of managers" structure for the Fund. / / / / / /
4. To approve a new management contract with Prudential Investments Fund / / / / / /
Management LLC.
5(b). To approve a subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC and Jennison Associates LLC.
6(a). To amend the fundamental investment policies of the Fund concerning real / / / / / /
estate & commodities.
6(b). To delete the fundamental investment policy of the Fund concerning / / / / / /
controlling investments.
6(c). To amend the fundamental investment policy of the Fund concerning / / / / / /
borrowing.
6(d). To amend the fundamental investment policy of the Fund concerning loans. / / / / / /
6(e). To amend the fundamental investment policy of the Fund concerning / / / / / /
underwriting.
6(f). To delete the fundamental investment policy of the Fund concerning / / / / / /
diversification interpretation.
7. To amend the Fund's By-Laws. / / / / / /
8. To amend the fundamental investment objective of the Fund's Equity Income / / / / / /
Portfolio.
9. To approve a subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC and GE Asset Management Incorporated for the Equity
Portfolio.
10. To approve a subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC and Salomon Brothers Asset Management Inc. for the
Equity Portfolio.
11. To approve a subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC and Deutsche Asset Investment Management Inc. for the
Equity Income Portfolio.
12. To approve a subadvisory agreement between Prudential Investments Fund / / / / / /
Management LLC and Key Asset Management Inc. for the Equity Income
Portfolio.
</TABLE>
PSFE & EI
PRUPSFB
<PAGE>
THE PRUDENTIAL SERIES FUND, INC.
EQUITY PORTFOLIO AND EQUITY INCOME PORTFOLIO
ABOUT THE PROPOSALS
PROPOSALS 1-8 ARE DISCUSSED IN THE ACCOMPANYING PROXY STATEMENT. All Portfolio
votes will be combined for Proposals 1, 2 and 7 as these Proposals relate to
the Fund as a whole. Each Portfolio votes separately on Proposals 3, 4, 5(b),
and 6.
PROPOSAL 5(a) does not apply to Equity Portfolio or Equity Income Portfolio
and does not appear on your voting instruction form.
PROPOSAL 8 applies only to Equity Income Portfolio.
PROPOSALS 9-12 ARE DISCUSSED IN THE ACCOMPANYING PROXY STATEMENT SUPPLEMENT.
PROPOSALS 9 AND 10 apply only to Equity Portfolio.
PROPOSALS 11 AND 12 apply only to Equity Income Portfolio.
