<PAGE>
THE PRUDENTIAL SERIES FUND, INC.
SUPPLEMENT, DATED FEBRUARY 1, 2001
TO
STATEMENT OF ADDITIONAL INFORMATION,
DATED AUGUST 11, 2000
On January 31, 2001, shareholders of certain Portfolios of The Prudential
Series Fund, Inc. (the "Fund") held a special meeting at which they approved a
number of changes to the Fund. The following information supplements
information contained in the Fund's Statement of Additional Information ("SAI")
dated August 11, 2000.
Investment Restrictions
The following changes are made to investment restrictions 1-12 listed within
the SAI:
Investment Restriction 1 is revised to read as follows:
None of the Portfolios will buy or sell real estate, except that
investments and securities of issuers that invest in real estate and
investments in mortgage-backed securities, mortgage participations or other
instruments supported or secured by interests in real estate are not
subject to this limitation, and except that the Portfolios may exercise
rights relating to such securities, including the right to enforce security
interests and to hold real estate acquired by reason of such enforcement
until that real estate can be liquidated in an orderly manner. None of the
Portfolios will buy or sell commodities or commodity contracts, except that
a Portfolio may, consistent with its investment style, purchase and sell
financial futures contracts and options thereon. For purposes of this
restriction, futures contracts on currencies and on securities indicies and
forward foreign currency exchange contracts are not deemed to be
commodities or commodity contracts.
Investment Restriction 3 is removed.
Investment Restriction 5 is revised to read as follows:
None of the Portfolios will purchase securities on margin (but a Portfolio
may obtain such short-term credits as may be necessary for the clearance of
transactions); provided that the deposit or payment by a Portfolio of
initial or maintenance margin in connection with otherwise permissible
futures or options is not considered the purchase of a security on margin.
None of the Portfolios will issue senior securities, borrow money or pledge
assets, except as permitted by the Investment Company Act of 1940 and rules
thereunder, or by exemptive order, SEC release, no-action letter, or
similar relief or interpretations. For purposes of this restriction, the
purchase or sale of securities on a when-issued or delayed-delivery basis,
reverse repurchase agreements, short sales, derivative and hedging
transactions and collateral arrangements with respect thereto, and
obligations of the Fund to Directors pursuant to deferred compensation
agreements are not deemed to be a pledge of assets or the issuance of a
senior security.
S-1
<PAGE>
Investment Restriction 8 is revised to read as follows:
None of the Portfolios will make loans, except through loans of assets of a
Portfolio, repurchase agreements, trade claims, loan participations or
similar investments, or as permitted by the Investment Company Act of 1940
and rules thereunder, or by exemptive order, SEC release, no-action letter
or similar relief or interpretations. Provided that for purposes of this
limitation, the acquisition of bonds, debentures, other debt securities or
instruments, or participations or other interests therein and investments
in government obligations, commercial paper, certificates of deposit,
bankers' acceptances or instruments similar to any of the foregoing will
not be considered the making of a loan.
Investment Restriction 9 is revised to read as follows:
None of the Portfolios will act as underwriter except to the extent that,
in connection with the disposition of portfolio securities, it may be
deemed to be an underwriter under certain federal securities laws.
Investment Restriction 10 is removed.
Investment Management Arrangements
The following replaces the "Prudential-Advised Funds" section on pages 29-32,
except the advisory fee chart and the information about Franklin Advisers, The
Dreyfus Corporation and Pacific Investment Management Company in that section:
Prudential Investments Fund Management LLC ("PIFM") serves as adviser and
manages the business affairs of all Portfolios of the Fund, including each
Portfolio that formerly was managed by The Prudential Insurance Company of
America.
The Fund operates under a manager-of-managers structure. PIFM is authorized to
select (with approval of the Board's independent directors) one or more
subadvisers to handle the actual day-to-day investment management of each
Portfolio. PIFM monitors each subadviser's performance through quantitative and
qualitative analysis and periodically reports to the Board as to whether each
subadviser's agreement should be renewed, terminated or modified. It is
possible that PIFM will continue to be satisfied with the performance record of
the existing subadvisers and not recommend any additional subadvisers. PIFM is
also responsible for allocating assets among the subadvisers if a Portfolio has
more than one subadviser. In those circumstances, the allocation for each
subadviser can range from 0% to 100% of the Portfolio's assets, and PIFM can
change the allocations without Board or shareholder approval. Shareholders will
be notified of any new subadvisers or materially amended subadvisory
agreements.
The manager-of-managers structure operates under an order issued by the
Securities and Exchange Commission ("SEC"). The current order permits us to
hire or amend subadvisory agreements, without shareholder approval, only with
subadvisers that are not affiliated with Prudential.
S-2
<PAGE>
The current order imposes the following conditions:
1. PIFM will provide general management and administrative services to the
Fund including overall supervisory responsibility for the general
management and investment of the Fund's securities portfolio, and,
subject to review and approval by the Board, will (i) set the
Portfolios' overall investment strategies; (ii) select subadvisers;
(iii) monitor and evaluate the performance of subadvisers; (iv)
allocate and, when appropriate, reallocate a Portfolio's assets among
its subadvisers in those cases where a Portfolio has more than one
subadviser; and (v) implement procedures reasonably designed to ensure
that the subadvisers comply with the Fund's investment objectives,
policies, and restrictions.
2. Before a Portfolio may rely on the order, the operation of the
Portfolio in the manner described in the Application will be approved
by a majority of its outstanding voting securities, as defined in the
Investment Company Act, or, in the case of a new Portfolio whose public
shareholders purchased shares on the basis of a prospectus containing
the disclosure contemplated by condition (4) below, by the sole
shareholder before offering of shares of such Portfolio to the public.
3. The Fund will furnish to shareholders all information about a new
subadviser or subadvisory agreement that would be included in a proxy
statement. Such information will include any change in such disclosure
caused by the addition of a new subadviser or any proposed material
change in a Portfolio's subadvisory agreement. The Fund will meet this
condition by providing shareholders with an information statement
complying with the provisions of Regulation 14C under the Securities
Exchange Act of 1934, as amended, and Schedule 14C thereunder. With
respect to a newly retained subadviser, or a change in a subadvisory
agreement, this information statement will be provided to shareholders
of the Portfolio a maximum of ninety (90) days after the addition of
the new subadviser or the implementation of any material change in a
subadvisory agreement. The information statement will also meet the
requirements of Schedule 14A under the Exchange Act.
4. The Fund will disclose in its prospectus the existence, substance and
effect of the order granted pursuant to the Application.
5. No Director or officer of the Fund or director or officer of PIFM will
own directly or indirectly (other than through a pooled investment
vehicle that is not controlled by such director or officer) any
interest in any subadviser except for (i) ownership of interests in
PIFM or any entity that controls, is controlled by or is under common
control with PIFM, or (ii) ownership of less than 1% of the outstanding
securities of any class of equity or debt of a publicly-traded company
that is either a subadviser or any entity that controls, is controlled
by or is under common control with a subadviser.
6. PIFM will not enter into a subadvisory agreement with any subadviser
that is an affiliated person, as defined in Section 2(a)(3) of the
Investment Company Act, of the Fund or PIFM other than by reason of
serving a subadviser to one or more Portfolios (an "Affiliated
Subadviser") without such agreement, including the
S-3
<PAGE>
compensation to be paid thereunder, being approved by the shareholders
of the applicable Portfolio.
7. At all times, a majority of the members of the Board will be persons
each of whom is not an "interested person" of the Fund as defined in
Section 2(a)(19) of the Investment Company Act ("Independent
Directors"), and the nomination of new or additional Independent
Directors will be placed within the discretion of the then existing
Independent Directors.
8. When a subadviser change is proposed for a Portfolio with an Affiliated
Subadviser, the Board, including a majority of the Independent
Directors, will make a separate finding, reflected in the Board's
minutes, that such change is in the best interests of the Portfolio and
its shareholders and does not involve a conflict of interest from which
PIFM or the Affiliated subadviser derives an inappropriate advantage.
The Fund intends to seek an amendment to the current order or a new order from
the SEC permitting us to (1) hire one or more new affiliated subadvisers
without shareholder approval, (2) amend existing agreements with affiliated
subadvisers without shareholder approval, and (3) disclose only the aggregate
fees (both as a dollar amount and as a percentage of the Fund's net assets)
paid to each unaffiliated subadviser ("Aggregate Fee Disclosure") by PIFM, not
the Fund. We will, of course, comply with any conditions imposed by the SEC
under any new or amended order.
The agreement between the Fund and PIFM, which was approved by the Board on
August 22, 2000 and by shareholders on January 31, 2001, provides that: PIFM
will administer the Fund's business affairs and supervise the Fund's
investments and PIFM may engage one or more subadvisers for each Portfolio,
which will have primary responsibility for determining what investments the
Portfolio will purchase, retain, and sell; PIFM (or the subadviser, acting
under PIFM's supervision) will select brokers to effect trades for the
Portfolio, and may pay a higher commission to a broker that provides research
services; PIFM will pay the salaries and expenses of any employee or officer of
the Fund (other than the fees and expenses of the Fund's independent directors)
and all expenses incurred by PIFM in connection with managing the Fund's
business, except expenses covered by the Fund under the agreement (i.e., fees
and expenses incurred by the Fund in connection with the management of the
investment and reinvestment of the Fund's assets, fees and expenses of the
Fund's independent directors, custodial fees and expenses, transfer and
dividend disbursing fees and expenses, legal counsel and independent accountant
charges and expenses, brokers' commissions and transfer taxes, other local,
state or federal taxes, trade association expenses, certificate expenses,
fidelity bond and insurance, registration expenses, litigation and
indemnification expenses, other extraordinary expenses not incurred in the
ordinary course of the Fund's business, and any expenses assumed by the Fund
under any distribution plan); PIFM will pay any subadvisory fee; PIFM may
replace a Portfolio's subadviser or amend a subadvisory agreement; and if a
Portfolio has more than one subadviser, PIFM will determine the allocation of
assets among the Portfolio's subadvisers. The agreement may be terminated by
either party on not more than 60 days written notice.
S-4
<PAGE>
The agreements between PIFM and each subadviser generally provide that: the
subadviser will provide day-to-day management of the portion of the Portfolio
allocated to it; the subadviser will select brokers to effect trades for the
Fund and may pay a higher commission to a broker that provides research
services; the subadviser will maintain certain books and records on behalf of
the Fund; and PIFM will be responsible for compensating the subadviser for its
services out of the investment advisory fee PIFM receives from the Portfolio.
The agreements generally permit the Fund, PIFM or the subadviser to terminate
the agreement on not more than 60 days written notice.
PIFM currently charges the following annual advisory fees: 0.55% for the
Conservative Balanced Portfolio, 0.40% for the Diversified Bond Portfolio,
0.75% for the Diversified Conservative Growth Portfolio, 0.45% for the Equity
Portfolio, 0.60% for the Flexible Managed Portfolio, 0.75% for the Global
Portfolio, 0.40% for the Government Income Portfolio, 0.55% for the High Yield
Bond Portfolio, 0.40% for the Money Market Portfolio, 0.45% for the Natural
Resources Portfolio, 0.60% for the Prudential Jennison Portfolio, 0.40% for the
Small Capitalization Stock Portfolio, 0.35% for the Stock Index Portfolio,
0.40% for the Prudential Value Portfolio, 0.75% for the 20/20 Focus Portfolio
and 0.40% for the Zero Coupon Bond Portfolio 2005.
PIFM currently pays the following annual advisory fees to Prudential Investment
Corporation ("PIC") based on the portion of the Portfolio managed by PIC:
0.275% for the Conservative Balanced Portfolio, 0.20% for the Diversified Bond
Portfolio, 0.375% for the Diversified Conservative Growth Portfolio, 0.30% for
the Flexible Managed Portfolio, 0.20% for the Government Income Portfolio,
0.275% for the High Yield Bond Portfolio, 0.20% for the Money Market Portfolio,
0.26% for the Small Capitalization Stock Portfolio, 0.175% for the Stock Index
Portfolio and 0.20% for the Zero Coupon Bond Portfolio 2005.
PIFM currently pays the following annual advisory fees to Jennison Associates
LLC ("Jennison") based on the portion of the Portfolio managed by Jennison:
Diversified Conservative Growth Portfolio (Growth portion)
0.30% for first $300 million in assets;
0.25% for assets above $300 million
Diversified Conservative Growth Portfolio (Value portion)
0.375% for all assets
Equity Portfolio
0.225% for all assets
Global Portfolio
0.375% for all assets
Natural Resources Portfolio
0.225% for all assets
Prudential Jennison Portfolio
0.75% for first $10 million in assets;
0.50% for next $30 million in assets;
S-5
<PAGE>
0.35% for next $25 million in assets;
0.25% for next $335 million in assets;
0.22% for next $600 million in assets;
0.20% for assets above $1 billion.
Prudential Value Portfolio
0.20% for all assets
20/20 Focus Portfolio (Growth portion)
0.30% for first $300 million in assets;
0.25% for assets above $300 million
20/20 Focus Portfolio (Value portion)
0.375% for all assets
PIFM currently pays the following annual advisory fees to Salomon Brothers
Asset Management Inc. ("Salomon") based on the portion of the Equity Portfolio
managed by Salomon: 0.40% for the first $50 million in assets, 0.30% for the
next $250 million in assets, and 0.155% for assets over $300 million. For
purposes of calculating these fees, the assets of the Equity Portfolio are
combined with the assets of the PIFM-advised retail fund counterpart to that
Portfolio.
PIFM currently pays the following annual advisory fees to GE Asset Management
Incorporated ("GEAM") based on the portion of the Equity Portfolio managed by
GEAM: 0.30% for the first $50 million in assets, 0.20% for the next $250
million in assets, and 0.15% for assets over $300 million. For purposes of
calculating these fees, the assets of the Equity Portfolio are combined with
the assets of the PIFM-advised retail fund counterpart to that Portfolio.
PIFM currently pays the following annual advisory fees to Deutsche Asset
Management Inc. ("Deutsche") based on the portion of the Prudential Value
Portfolio managed by Deutsche: 0.29% for the first $50 million in assets, 0.23%
for the next $250 million in assets, and 0.15% for assets over $300 million.
For purposes of calculating these fees, the assets of the Prudential Value
Portfolio are combined with the assets of the PIFM-advised retail fund
counterpart to that Portfolio.
PIFM currently pays the following annual advisory fees to Key Asset Management
Inc. ("Key") based on the portion of the Prudential Value Portfolio managed by
Key: 0.29% for the first $50 million in assets, 0.23% for the next $250 million
in assets, and 0.15% for assets over $300 million. For purposes of calculating
these fees, the assets of the Prudential Value Portfolio are combined with the
assets of the PIFM-advised retail fund counterpart to that Portfolio.
The Fund, PIFM, PIC, Jennison, Salomon, GEAM, Deutsche and Key have all adopted
codes of ethics which have been approved by the Board of Directors of the Fund.
The codes permit personnel subject to them, including the portfolio managers,
to invest in securities for their personal account, including securities that
may be purchased or held by the Fund. The
S-6
<PAGE>
codes, however, include protective provisions that prohibit certain investments
and implement certain black-out periods, i.e., periods during which personnel
may not make certain investments.
Management of the Fund
The following replaces the information in "Management of the Fund" on pages 44-
45:
The names of all directors and major officers of the Fund and the principal
occupation of each during the last 5 years are shown below. The address of each
director and officer is 100 Mulberry Street, Gateway Center Three, 14th Floor,
Newark, New Jersey 07102-4077.
Directors of the Fund
Eugene C. Dorsey, 73, Director--Retired President, Chief Executive Officer and
Trustee of the Gannett Foundation (now Freedom Forum); former publisher of four
Gannett newspapers and Vice President of Gannett Company; past Chairman of
Independent Sector (national coalition of philanthropic organizations); former
Chairman of the American Council for the Arts; former Director of the Advisory
Board of Chase Manhattan Bank of Rochester and Director or Trustee of several
funds within the Prudential Mutual Funds Complex.
Saul K. Fenster, 67, Director--President, New Jersey Institute of Technology.
He serves as a Commissioner of the Middle States Association, Commission on
Higher Education. He is currently a member of the New Jersey Commission on
Science and Technology and a director of the New Jersey State Chamber of
Commerce. Mr. Fenster serves on the boards of the Society of Manufacturing
Engineering Education Foundation, the Research and Development Council of New
Jersey, Prosperity New Jersey, Inc., the Edison Partnership, National Action
Council for Minorities in Engineering; Director of IDT Corporation and Director
or Trustee of several funds within the Prudential Mutual Funds complex.
Delayne D. Gold, 62, Director--Marketing and Management Consultant; Director or
Trustee of several funds within the Prudential Mutual Funds complex.
Robert F. Gunia*, 53, Vice President and Director--Executive Vice President and
Chief Administrative Officer (since June 1999) of Prudential Investments;
Corporate Vice President (September 1997-March 1999) of The Prudential
Insurance Company of America ("Prudential"); Executive Vice President and
Treasurer (since December 1996) of Prudential Investments Fund Management LLC
("PIFM"); President (since April 1999) of Prudential Investment Management
Services LLC ("PIMS"); former Senior Vice President (March 1987-May 1999) and
former Chief Administrative Officer (July 1989-September 1996) of Prudential
Securities Incorporated ("Prudential Securities"); Director (January 1989-
September 1996), Executive Vice President, Treasurer and Chief Financial
Officer (June 1987-December 1996) of Prudential Mutual Fund Management, Inc.
("PMF"); Vice President and Director (since May 1989) of The Asia Pacific Fund,
Inc. and Director or Trustee of several funds within the Prudential Mutual
Funds complex.
S-7
<PAGE>
Maurice F. Holmes, 57, Director--Director of Center for Innovation in Product
Development, Professor of Engineering, Massachusetts Institute of Technology
(since January 1998), Chief Engineer and Corporate Vice President, Xerox
Corporation (1972- 1997); and Director or Trustee of several funds within the
Prudential Mutual Funds complex.
Robert E. LaBlanc, 66, Director--President of Robert E. LaBlanc Associates,
Inc. (telecommunications); formerly General Partner at Salomon Brothers and
Vice-Chairman of Continental Telecom. Director of Storage Technology
Corporation, Chartered Semiconductor Manufacturing, Ltd., Titan Corporation,
Salient 3 Communications, Inc. and Tribune Company; Trustee of Manhattan
College; and Trustee or Director of several funds within the Prudential Mutual
Funds complex.
Douglas H. McCorkindale, 61, Director--CEO (since May, 2000), Vice Chairman
(since 1984) and President (since September 1997) of Gannett Co. Inc.
(publishing and media); Director of Gannett Co., Inc., Frontier Corporation and
Continental Airlines, Inc.; and Director or Trustee of several funds within the
Prudential Mutual Funds complex.
W. Scott McDonald, Jr. Ph.D, 63, Director--Vice President, Kaludis Consulting
Group, Inc. (a Sallie Mae company serving higher education). From 1991 to 1995,
Chief Operating Officer, Fairleigh Dickinson University. From 1975-1991,
Executive Vice President and Chief Operating Officer, Drew University. A
founding director of School, College and University Underwriters Ltd. and
Director or Trustee of several funds within the Prudential Mutual Funds
complex.
Thomas T. Mooney, 58, Director--President of the Greater Rochester Metro
Chamber of Commerce; former Rochester City manager; former Deputy Monroe County
Executive; Trustee of Center for Governmental Research, Inc.; Director of Blue
Cross of Rochester, Monroe County Water Authority, Executive Service Corps of
Rochester and Director or Trustee of several funds within the Prudential Mutual
Funds complex.
Stephen P. Munn, 58, Director--Chairman, President and Chief Executive Officer,
Carlisle Companies Incorporated (manufacturer of industrial products) and;
Director or Trustee of several funds within the Prudential Mutual Funds
complex.
David R. Odenath*, 43, Chairman, President and Director--Officer in Charge,
President, Chief Executive Officer and Chief Operating Officer (since June
1999) of PIFM; Senior Vice President (since June 1999) of Prudential; Senior
Vice President (August 1993-May 1999) of PaineWebber Group, Inc. and Director
or Trustee of several funds within the Prudential Mutual Funds complex.
Richard A. Redeker, 57, Director--Former employee of Prudential Investments
(October 1996-December 1998); prior thereto, President, Chief Executive Officer
and Director (October 1993-September 1996) of PMF. Executive Vice President,
Director and Member of the Operating Committee (October 1993-September 1996) of
Prudential Securities; Director (October 1993-September 1996) of Prudential
Securities Group, Inc.; Executive Vice President, The Prudential Investment
Corporation (January 1994-September
S-8
<PAGE>
1996); Director (January 1994-September 1996) of Prudential Mutual Fund
Distributors, Inc. and Prudential Mutual Fund Services, Inc. and Director or
Trustee of several funds within the Prudential Mutual Funds complex.
Judy A. Rice*, 52, Director--Executive Vice President (since 1999) of
Prudential Investments; Executive Vice President (since 1999) of PIFM;
formerly, various positions to Senior Vice President (1992-1999), Prudential
Securities, Inc. and Director or Trustee of several funds within the Prudential
Mutual Funds complex.
Robin B. Smith, 61, Director--Chairman and Chief Executive Officer (since
August 1996), formerly President and Chief Executive Officer (January 1988-
August 1996) and President and Chief Operating Officer of Publishers Clearing
House; Director of BellSouth Corporation, Texaco, Inc., Springs Industries,
Inc. and Kmart Corporation; and Director or Trustee of several funds within the
Prudential Mutual Funds complex.
Stephen Stoneburn, 57, Director--President and Chief Executive Officer (since
June 1996) of Quadrant Media Corp. (a publishing company); formerly President
(June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President
and Managing Director (January 1993-1995) of Cowles Business Media. Senior Vice
President of Fairchild Publications, Inc. and Director or Trustee of several
funds within the Prudential Mutual Fund complex.
Nancy H. Teeters, 70, Director--Economist; former Vice President and Chief
Economist, International Business Machines Corporation; former Director of
Inland Steel Industries (July 1984-1999); and Director or Trustee of several
funds within the Prudential Mutual Funds complex.
Joseph Weber Ph.D, 76, Director--Vice President, Finance, Interclass
(international corporate learning) since 1991. Former President, The Alliance
for Learning. Retired Vice President, Member of the Board of Directors, Member
of the Executive and Operating Committees, Hoffmann-LaRoche Inc. Member, Board
of Overseers, New Jersey Institute of Technology. Trustee and Vice Chairman
Emeritus, Fairleigh Dickinson University; and Director or Trustee of several
funds within the Prudential Mutual Funds complex.
Louis A. Weil, III, 59, Director--Former Chairman (January 1999-July 2000),
President and Chief Executive Officer (January 1996-July 2000) and Director
(since September 1991) of Central Newspapers, Inc.; Chairman of the Board
(since January 1996), Publisher and Chief Executive Officer (August 1991-
December 1995) of Phoenix Newspapers, Inc.; and Director or Trustee of several
funds within the Prudential Mutual Funds complex.
Clay T. Whitehead, 61, Director--President of National Exchange Inc. (new
business development firm) and Director or Trustee of several funds within the
Prudential Mutual Funds complex.
S-9
<PAGE>
Officers Who Are Not Directors
William V. Healey, Assistant Secretary--Vice President and Associate General
Counsel of Prudential and Chief Legal Officer of Prudential Investments since
1998; Director, ICI Mutual Insurance Company since 1999; prior to 1998,
Associate General Counsel of the Dreyfus Corporation.
Jeffrey Scarbel, Assistant Treasurer--Vice President of Prudential.
C. Christopher Sprague, Secretary--Assistant General Counsel of Prudential
since 1994.
Grace C. Torres, Treasurer and Principal Financial and Accounting Officer--
First Vice President of PIFM since 1996, prior to 1996: First Vice President of
Prudential Securities Inc.
--------
* This member of the Board is an interested person of the Fund as defined in
the 1940 Act. They are interested persons of the Fund because they are
officers and/or affiliated persons of PIFM, the investment adviser to the
Fund. Certain actions of the Board, including the annual continuance of the
Investment Advisory Agreement between the Fund and PIFM, must be approved
by a majority of the members of the Board who are not interested persons of
the Fund.
No director or officer of the Fund who is also an officer, director or employee
of Prudential or its affiliates is entitled to any remuneration from the Fund
for services as one of its directors or officers. Each independent director is
paid a fee for each Prudential mutual fund group or "cluster" for which he or
she serves. For each cluster, each independent director receives a annual
retainer fee of $55,000 plus an additional $2,000 per year for serving as a
member of the audit or nominating committee. In addition, members that serve on
a coordinating executive committee receive an additional annual retainer of
$8,000. These fees are shared by all of the funds in the cluster, so this Fund
pays a portion of these fees. The independent directors are also reimbursed for
all expenses incurred in connection with attendance at meetings.
S-10
<PAGE>
The following table sets forth the aggregate compensation paid by the Fund to
the independent directors for the fiscal year ended December 31, 1999 and the
aggregate compensation paid to such directors for service on the Fund's Board
and the Boards of any other investment companies managed by Prudential for the
calendar year ended December 31, 1999.
Compensation Table
<TABLE>
<CAPTION>
Pension or Total
Retirement Estimated Compensation
Benefits Annual From Fund and
Aggregate Accrued as Benefits Fund Complex*
Compensation Part of Fund Upon Paid to
Name and Position From Fund Expenses Retirement Directors**
----------------- ------------ ------------ ---------- -------------
<S> <C> <C> <C> <C>
Eugene C. Dorsey,
Director.................. $ 0 $ 0 $ 0 $103,574
Saul K. Fenster, Director.. $22,800 $ 0 $ 0 $ 35,000
Delayne D. Gold, Director.. $ 0 $ 0 $ 0 $144,500
Robert F. Gunia, Director.. $ 0 $ 0 $ 0 $ 0
Maurice F. Holmes,
Director.................. $ -- $-- $ 0 $ 0
0 0
Robert E. LaBlanc,
Director.................. $ -- $ 0 $ 0 $ 61,250
0
Douglas H. McCorkindale,
Director.................. $ 0 $ 0 $ 0 $ 97,916
W. Scott McDonald, Jr.,
Director.................. $22,800 $ 0 $ 0 $ 35,000
Thomas T. Mooney,
Director.................. $ 0 $ 0 $ 0 $135,102
Stephen P. Munn, Director.. $ 0 $ 0 $ 0 $ 62,250
David R. Odenath, Jr.,
Director.................. $ 0 $ 0 $ 0 $ 0
Richard A. Redeker,
Director.................. $ 0 $ 0 $ 0 $ 95,000
Judy A. Rice, Director..... $ 0 $ 0 $ 0 $ 0
Robin B. Smith, Director... $ 0 $ 0 $ 0 $156,478
Stephen Stoneburn,
Director.................. $ 0 $ 0 $ 0 $ 61,250
Nancy H. Teeters,
Director.................. $ 0 $ 0 $ 0 $ 97,000
Joseph Weber, Director..... $22,800 $ 0 $ 0 $ 35,000
Louis A. Weil, III,
Director.................. $ 0 $ 0 $ 0 $ 96,000
Clay T. Whitehead,
Director.................. $ 0 $ 0 $ 0 $ 77,000
</TABLE>
--------
* Information is for the calendar year ended December 31, 1999 for 50 funds
in the Prudential mutual funds complex. With respect to the independent
directors other than Messrs. Fenster, McDonald and Weber, each such
director was paid by other funds within the Prudential complex, and not by
the Fund. Interested directors of the Fund (currently Mr. Odenath, Mr.
Gunia and Ms. Rice) are compensated by Prudential.
** Certain of the director/trustee fees depicted in the table include amounts
representing deferred compensation.
As of April 1, 2000, the directors and officers of the Fund, as a group,
beneficially owned less than one percent of the outstanding shares of the Fund.
S-11
<PAGE>
THE PRUDENTIAL SERIES FUND, INC.
Conservative Balanced Portfolio
Diversified Bond Portfolio
Diversified Conservative Growth Portfolio
Equity Portfolio
Flexible Managed Portfolio
Global Portfolio
Government Income Portfolio
High Yield Bond Portfolio
Money Market Portfolio
Natural Resources Portfolio
Prudential Jennison Portfolio
Small Capitalization Stock Portfolio
Stock Index Portfolio
Value Portfolio (formerly Equity Income Portfolio)
20/20 Focus Portfolio
Zero Coupon Bond Portfolio 2005
Supplement, dated February 1, 2001
to
Prospectus, dated April 30, 2000
On January 31, 2001, shareholders of the above-referenced Portfolios of The
Prudential Series Fund, Inc. (the "Fund") held a special meeting at which they
approved a number of changes to the Fund. The following information
supplements information contained in the Fund's Prospectus dated April 30,
2000.
Not all Portfolios are available under all variable life and annuity
contracts. Please refer to your contract and the Prospectus for your contract
to determine which Portfolios are available under your contract.
Objective of Value Portfolio (formerly Equity Income Portfolio)
Shareholders approved a new fundamental investment objective for this
Portfolio. To reflect the changed objective, the name was changed to the
Prudential Value Portfolio. The following information replaces the information
about the Equity Income Portfolio in the sections titled "Investment
Objectives and Principal Strategies" and "How the Portfolios Invest--
Investment Objectives and Policies":
The investment objective of the Prudential Value Portfolio is to seek
capital appreciation. It will seek to achieve this objective by focusing on
undervalued stocks--those stocks that are trading below their underlying
asset value, cash generating ability and overall earnings and earnings
growth.
Investment Policies
The following information supplements the information in the section
titled, "How the Portfolios Invest--Investment Objectives and Policies":
Conservative Balanced Portfolio and Flexible Managed Portfolio
The stock portions of these Portfolios generally are managed as index
funds. The Conservative Balanced Portfolio's equity holdings are designed to
mirror the holdings of the S&P 500 Composite Stock Price Index. The Flexible
Managed Portfolio's equity holdings are chosen according to an "enhanced index
style", under which the portfolio managers utilize a quantitative approach in
seeking to outperform the benchmark index (i.e.,
<PAGE>
the S&P 500 Composite Stock Price Index) and to limit the possibility of
significantly underperforming that benchmark.
Each Portfolio may invest in exchange-traded funds.
Diversified Bond Portfolio
Usually, at least 65% of the Portfolio's total assets will be invested in
debt securities that are investment grade. The Portfolio may invest up to 35%
of total assets in debt securities rated below investment grade.
The Portfolio may invest up to 20% of total assets in debt securities
issued outside the United States by U.S. or foreign issuers, whether or not
such securities are denominated in the U.S. dollar. The Portfolio may invest
in forward foreign currency exchange contracts.
Diversified Conservative Growth Portfolio
The segment of the Portfolio focusing on value-oriented large-cap stocks is
now managed by Jennison Associates LLC.
Government Income Portfolio
The Portfolio's former policies to (i) invest "at least 65% of the
Portfolio's total assets in U.S. government securities . . ." and (ii) invest
"up to 35% of its total assets in money market instruments, foreign government
securities . . ." have been amended to refer instead to the Portfolio's "net
assets."
The Portfolio may invest up to 15% of its assets in zero coupon bonds.
Small Capitalization Stock Portfolio and Stock Index Portfolio
Each Portfolio may invest in exchange-traded funds.
Each Portfolio may enter into short sales. No more than 5% of either
Portfolios' total assets may be used as collateral or segregated for purposes
of securing a short sale obligation.
20/20 Focus Portfolio
The Portfolio's limit of 5% of assets held in cash is replaced with the
following policy: "We intend to be fully invested under normal market
conditions, but may accumulate cash and other short-term investments in such
amounts and for such temporary periods of time as market conditions dictate."
New Investment Adviser
Shareholders approved a new agreement under which Prudential Investments
Fund Management LLC, a subsidiary of The Prudential Insurance Company of
America, will serve as investment adviser to the Fund. Previously, The
Prudential Insurance Company of America ("Prudential") served as investment
adviser. Shareholders also approved a new "manager-of-managers" structure for
the Fund. The following information replaces the information about Prudential
in the section titled "How the Fund is Managed--Investment Adviser":
Prudential Investments Fund Management LLC ("PIFM"), a wholly-owned
subsidiary of Prudential, serves as the overall investment adviser for the
Fund. PIFM is located at 100 Mulberry Street, Newark, N.J. 07102-4077. PIFM
and its predecessors have served as manager and administrator to investment
companies since 1987. As of October 31, 2000, PIFM served as the manager to
48 mutual funds, and as manager or administrator to 21 closed-end
investment companies, with aggregate assets of approximately $74.7 billion.
2
<PAGE>
The Fund uses a "manager-of-managers" structure. Under this structure, PIFM
is authorized to select (with approval of the Fund's independent directors)
one or more sub-advisers to handle the actual day-to-day investment management
of each Portfolio. PIFM monitors each sub-adviser's performance through
quantitative and qualitative analysis, and periodically reports to the Fund's
board of directors as to whether each sub-adviser's agreement should be
renewed, terminated or modified. PIFM also is responsible for allocating
assets among the sub-advisers if a Portfolio has more than one sub-adviser. In
those circumstances, the allocation for each sub-adviser can range from 0% to
100% of a Portfolio's assets, and PIFM can change the allocations without
board or shareholder approval. The Fund will notify shareholders of any new
sub-adviser or any material changes to any existing sub-advisory agreement.
New Investment Sub-Advisers
As a result of a transition of most of Prudential's equity management
activities from Prudential Investment Corporation ("PIC") to Jennison
Associates LLC ("Jennison"), and the changes in the overall investment adviser
from Prudential to PIFM noted above, shareholders approved new sub-advisory
agreements with PIC and Jennison. In addition, shareholders have approved new
sub-advisory agreements with sub-advisers not affiliated with Prudential for
the Equity Portfolio and the Prudential Value Portfolio (formerly the Equity
Income Portfolio). The following information replaces the information about
PIC and Jennison in the section titled "How the Fund is Managed--Investment
Sub-Advisers." The information in that section about the Diversified
Conservative Growth Portfolio remains the same, except that Jennison now
manages the equity portion of that Portfolio formerly managed by PIC.
Each Portfolio has one or more sub-advisers providing the day-to-day
investment management. PIFM pays each sub-adviser out of the fee that PIFM
receives from the Fund.
Jennison serves as the sole sub-adviser for the Global Portfolio, the
Natural Resources Portfolio, the Prudential Jennison Portfolio and the 20/20
Focus Portfolio. Jennison serves as a sub-adviser for a portion of the assets
of the Diversified Conservative Growth Portfolio, the Equity Portfolio and the
Prudential Value Portfolio. It is expected that under normal circumstances,
Jennison will manage approximately 50% of each of the Equity and Prudential
Value Portfolios. Jennison's address is 466 Lexington Avenue, New York, NY
10017. As of September 30, 2000, Jennison had over $86.2 billion in assets
under management for institutional and mutual fund clients.
Prudential Investment Corporation serves as the sole sub-adviser for the
Conservative Balanced Portfolio, the Diversified Bond Portfolio, the Flexible
Managed Portfolio, the Government Income Portfolio, the High Yield Bond
Portfolio, the Money Market Portfolio, the Small Capitalization Stock
Portfolio, the Stock Index Portfolio and the Zero Coupon Bond Portfolio 2005.
PIC serves as a sub-adviser for a portion of the assets of the Diversified
Conservative Growth Portfolio (under normal circumstances approximately 20% of
assets). PIC's address is 751 Broad Street, Newark, NJ 07102.
Salomon Brothers Asset Management Inc. ("Salomon") serves as sub-adviser
for a portion of the assets of the Equity Portfolio. It is expected that under
normal circumstances Salomon will manage approximately 25% of the Portfolio.
Salomon is part of the SSB Citi Asset Management Group, the global asset
management arm of Citigroup Inc., which was formed in 1998 as a result of the
merger of Travelers Group and Citicorp Inc. As of September 30, 2000, the
investment advisers within SSB Citi Asset Management Group managed
approximately $396 billion in total assets. Salomon's address is 7 World Trade
Center, 38th Floor, New York, New York 10048.
GE Asset Management Incorporated ("GEAM") serves as a sub-adviser for a
portion of the assets of the Equity Portfolio. It is expected that under
normal circumstances GEAM will manage approximately 25% of the Portfolio. GEAM
is a wholly-owned subsidiary of General Electric Corporation. As of September
30, 2000, GEAM's total assets under management exceeded $123 billion. GEAM's
address is 777 Long Ridge Road, Building B, Stamford, Connecticut 06927.
3
<PAGE>
Deutsche Asset Management Inc. ("Deutsche"), formerly known as Morgan
Grenfell, Inc., serves as a subadviser for a portion of the assets of the
Prudential Value Portfolio (formerly the Equity Income Portfolio). It is
expected that under normal circumstances Deutsche will manage approximately
25% of the Portfolio. Deutsche is a wholly-owned subsidiary of Deutsche Bank
AG. As of September 30, 2000 Deutsche's total assets under management exceeded
$17 billion. Deutsche's address is 280 Park Avenue, New York, New York 10017.
Key Asset Management Inc. ("Key") serves as a subadviser for a portion of
the assets of the Prudential Value Portfolio (formerly the Equity Income
Portfolio). It is expected that under normal circumstances Key will manage
approximately 25% of the Portfolio. Key is a wholly-owned subsidiary of
KeyCorp, Inc. As of September 30, 2000, Key's total assets under management
exceeded $32 billion. Key's address is 127 Public Square, Cleveland, Ohio
44114.
New Portfolio Managers
The following information replaces the information in the section titled
"How the Fund is Managed--Portfolio Managers."
An Introductory Note About Fixed Income Management
Prudential Investments' Fixed Income Group, which provides portfolio
management services to the Conservative Balanced, Diversified Bond,
Diversified Conservative Growth, Flexible Managed, Government Income, High
Yield Bond, Money Market and Zero Coupon Bond 2005 Portfolios, manages more
than $127 billion for Prudential's retail investors, institutional investors,
and policyholders. Senior Managing Directors James J. Sullivan and Jack W.
Gaston head the Group, which is organized into teams specializing in different
market sectors. Top-down, broad investment decisions are made by the Fixed
Income Policy Committee, whereas bottom-up security selection is made by the
sector teams.
Mr. Sullivan has overall responsibility for overseeing portfolio management
and credit research. Prior to joining Prudential Investments in 1998, he was a
Managing Director in Prudential's Capital Management Group, where he oversaw
portfolio management and credit research for Prudential's General Account and
subsidiary fixed-income portfolios. He has more than 16 years of experience in
risk management, arbitrage trading and corporate bond investing.
Mr. Gaston has overall responsibility for overseeing quantitative research
and risk management. Prior to his appointment in 1999, he was Senior Managing
Director of the Capital Management Group where has was responsible for the
investment performance and risk management for Prudential's General Account
and subsidiary fixed-income portfolios. He has more than 20 years of
experience in investment management, including extensive experience applying
quantitative techniques to portfolio management.
The Fixed Income Investment Policy Committee is comprised of key senior
investment managers. Members include seven sector team leaders, the chief
investment strategist, and the head of risk management. The Committee uses a
top-down approach to investment strategy, asset allocation and general risk
management, identifying sectors in which to invest.
Conservative Balanced Portfolio and Flexible Managed Portfolio
These Portfolios are managed by a team of portfolio managers. Mark Stumpp,
Ph.D., Senior Managing Director of Prudential Investments, a division of
Prudential, has been the lead portfolio manager of the Portfolios since 1994
and is responsible for the overall asset allocation decisions.
The Corporate Team, headed by Steven Kellner, is primarily responsible for
overseeing the day-to-day management of the fixed income portion of the
Portfolios. This team uses a bottom-up approach, which focuses on individual
securities, while staying within the guidelines of the Investment Policy
Committee and the
4
<PAGE>
Portfolios' investment restrictions and policies. In addition, the Credit
Research team of analysts supports the sector teams using bottom-up
fundamentals, as well as economic and industry trends. Other sector teams may
contribute to securities selection when appropriate.
The equity portion of the Conservative Balanced Portfolio is managed by
Mark Stumpp, John Moschberger, and Michael Lenarcic. Mr. Stumpp's background
is discussed above. Mr. Lenarcic is a Managing Director within Prudential's
Quantitative Management team. Prior to joining the Quantitative Management
team in 1985, Mr. Lenarcic was a Vice President at Wilshire Associates, where
he was head of the Asset Allocation Division. Mr. Lenarcic holds a B.A. degree
from Kent State University and A.M. and Ph.D. degrees in Business Economics
from Harvard University. John Moschberger, CFA, Vice President of Prudential
Investments, manages the portions of each Portfolio designed to duplicate the
performance of the S&P 500. Mr. Moschberger joined Prudential in 1980 and has
been a portfolio manager since 1986.
The equity portion of the Flexible Managed Portfolio is managed by Mark
Stumpp, John Moschberger, and James Scott. The backgrounds of Mr. Stumpp and
Mr. Moschberger are discussed above. James Scott is a Senior Managing Director
of Prudential Investments Quantitative Management. Mr. Scott has managed
balanced and equity portfolios for Prudential's pension plans and several
institutional clients since 1987. Mr. Scott received a B.A. from Rice
University and an M.S. and a Ph.D. from Carnegie Mellon University.
Diversified Bond Portfolio
The Corporate Team, headed by Steven Kellner, is primarily responsible for
overseeing the day-to-day management of the Portfolio. The Corporate Team is
described above in the description of the Conservative Balanced and Flexible
Managed Portfolios.
Diversified Conservative Growth Portfolio
William Powers manages the portion of the Portfolio assigned to PIMCO. He
is a Managing Director and a senior member of PIMCO's portfolio management and
investment strategy groups. He is also one of five generalists in PIMCO's
portfolio management group, and co-heads the firm's mortgage team. Mr. Powers
joined the firm 10 years ago, having been previously associated with Salomon
Brothers, and with Bear Stearns as Senior Managing Director specializing in
mortgage-backed securities. He has 17 years of investment experience, holds a
bachelor's degree in Economics from Princeton University and an M.B.A. from
Stanford Graduate School of Business.
The High Yield Team, headed by Casey Walsh and Paul Appleby, is primarily
responsible for overseeing the day-to-day management of the fixed income
portion of the Portfolio assigned to PIC. For further information about the
High Yield Team, see "High Yield Bond Portfolio" below.
The large-cap growth equity portion of the Portfolio advised by Jennison is
managed by Spiros "Sig" Segalas, Michael A. Del Balso, and Kathleen A.
McCarragher. Mr. Segalas is a founding member and President and Chief
Investment Officer of Jennison. He has been in the investment business for
over 35 years. Mr. Del Balso, a Director and Executive Vice President of
Jennison, has been part of the Jennison team since 1972 when he joined the
firm from White, Weld & Company. Mr. Del Balso is a member of the New York
Society of Security Analysts. Ms. McCarragher, Director and Executive Vice
President of Jennison, is also Jennison's Growth Equity Investment Strategist,
having joined Jennison last year after a 20 year investment career, including
positions with Weiss, Peck & Greer and State Street Research and Management
Company, where she was a member of the Investment Committee.
The large-cap value equity portion of the Portfolio advised by Jennison is
managed by Thomas Kolefas. Mr. Kolefas has been a Senior Vice President of
Jennison since September 2000. Previously, he was a Managing Director and
Senior Portfolio Manager of Prudential Global Asset Management. He joined
Prudential in May 2000 from Loomis Sayles Co., L.P., where he headed the Large
/Mid Cap Value Team. Prior to 1996, Mr. Kolefas
5
<PAGE>
was employed by Mackay Shields Financial as a portfolio manager for five
years. Mr. Kolefas earned a B.S. and an M.B.A. from New York University and
holds a Chartered Financial Analyst (C.F.A.) designation.
Edward B. Jamieson, Michael McCarthy and Aidan O'Connell manage the portion
of the Portfolio assigned to Franklin. Mr. Jamieson is an Executive Vice
President of Franklin and Managing Director of Franklin's equity and high
yield groups. He has been with Franklin since 1987. Mr. McCarthy joined
Franklin in 1992 and is a vice president and portfolio manager specializing in
research analysis of several technology groups. Mr. O'Connell joined Franklin
in 1998 and is a research analyst specializing in research analysis of the
semiconductor and semiconductor capital equipment industries. Prior to joining
Franklin, Mr. O'Connell was a research associate and corporate finance
associate with Hambrecht & Quist.
William R. Rydell, CFA, and Mark W. Sikorski, CFA, manage the portion of
the Portfolio assigned to Dreyfus. Mr. Rydell is a portfolio manager of
Dreyfus and is the President and Chief Executive Officer of Mellon Equity
Associates LLP. Mr. Rydell has been in the Mellon organization since 1973. Mr.
Sikorski is a portfolio manager of Dreyfus and a Vice President of Mellon
Equity Associates LLP. Mr. Sikorski has been in the Mellon organization since
1996. Prior to joining Mellon, he managed various corporation treasury
projects for Northeast Utilities, including bond refinancing and investment
evaluations.
Equity Portfolio
Jeffrey Siegel, Bradley Goldberg and David Kiefer are co-managers of the
portion of the Portfolio assigned to Jennison. Mr. Siegel has been an
Executive Vice President of Jennison since June 1999. Previously he was at
TIAA-CREF from 1988-1999, where he held positions as a portfolio manager and
analyst. Prior to joining TIAA-CREF, Mr. Siegel was an analyst for Equitable
Capital Management and held positions at Chase Manhattan Bank and First
Fidelity Bank. Mr. Siegel earned a B.A. from Rutgers University. Mr. Goldberg,
an Executive Vice President of Jennison, joined Jennison in 1974 where he also
serves as Chairman of the Asset Allocation Committee. Prior to joining
Jennison, he served as Vice President and Group Head in the Investment
Research Division of Bankers Trust Company. He earned a B.S. from the
University of Illinois and an M.B.A. from New York University. Mr. Goldberg
holds a Chartered Financial Analyst (C.F.A.) designation. Mr. Kiefer has been
a Senior Vice President of Jennison since August 2000. Previously, he was a
Managing Director of Prudential Global Asset Management and has been with
Prudential since 1986. Mr. Kiefer earned a B.S. from Princeton University and
an M.B.A. from Harvard Business School. He holds a Chartered Financial Analyst
(C.F.A.) designation.
Richard Sanderson, Director of Research for GE, will manage the portion of
the Equity Portfolio assigned to GEAM. Mr. Sanderson, a Chartered Financial
Analyst, has been employed with GEAM for over 5 years, and holds B.A. and
M.B.A. degrees from the University of Michigan.
Michael Kagan, a Director of Salomon, will manage the portion of the Equity
Portfolio assigned to Salomon. Mr. Kagan has over 15 years of asset management
experience, including experience as an analyst covering the consumer products,
aerospace, chemicals, and housing industries. Mr. Kagan received his B.A. from
Harvard College and attended the MIT Sloan School of Management.
Global Portfolio
Daniel Duane and Michelle Picker manage this Portfolio. Mr. Duane has been
an Executive Vice President of Jennison since October 2000 and was previously
a Managing Director of Prudential Global Asset Management. He has been
managing the Portfolio since 1991. Prior to joining Prudential, he was with
First Investors Asset Management where he was in charge of all global equity
investments. He earned a B.A. from Boston College, a Ph.D. from Yale
University and an M.B.A. from New York University. He holds a Chartered
Financial Analyst (C.F.A.) designation. Michelle Picker has been a Vice
President of Jennison since October 2000 and was previously a Vice President
of PIC. Ms. Picker joined Prudential in 1992 and has co-managed the Portfolio
since October 1997. Ms. Picker earned a B.A. from the University of
Pennsylvania and an M.B.A. from New York University. She holds a Chartered
Financial Analyst (C.F.A.) designation.
6
<PAGE>
Government Income Portfolio and Zero Coupon Bond Portfolio 2005
The U.S. Liquidity Team, headed by Michael Lillard, is primarily
responsible for overseeing the day-to-day management of the Portfolios. This
Team uses a bottom-up approach, which focuses on individual securities, while
staying within the guidelines of the Investment Policy Committee and the
Portfolios' investment restrictions and policies. In addition, the Credit
Research team of analysts supports the sector teams using bottom-up
fundamentals, as well as economic and industry trends. Other sector teams may
contribute to securities selection when appropriate.
High Yield Bond Portfolio
The High Yield Team, headed by Casey Walsh and Paul Appleby, is primarily
responsible for overseeing the day-to-day management of the Portfolio. This
Team uses a bottom-up approach, which focuses on individual securities, while
staying within the guidelines of the Investment Policy Committee and the
Portfolio's investment restrictions and policies. In addition, the Credit
Research team of analysts supports the sector teams using bottom-up
fundamentals, as well as economic and industry trends. Other sector teams may
contribute to securities selection when appropriate.
Money Market Portfolio
The Money Market Team, headed by Joseph Tully, is primarily responsible for
overseeing the day-to-day management of the Portfolio. This Team uses a
bottom-up approach, which focuses on individual securities, while staying
within the guidelines of the Investment Policy Committee and the Portfolio's
investment restrictions and policies.
Natural Resources Portfolio
Leigh Goehring and Mark DeFranco manage this Portfolio. Mr. Goehring, a
Vice President of Jennison since September 2000, has been managing this
Portfolio since 1991. Prior to joining Jennison, he was a Vice President of
PIC. Mr. Goehring joined Prudential in 1986. Prior to joining Prudential, Mr.
Goehring managed general equity accounts in the Trust Department at Bank of
New York. He earned a B.A. from Hamilton College with a double major in
Economics and Mathematics. Mr. DeFranco, a Vice President of Jennison, joined
Jennison in 1998 with over 12 years of experience in the investment industry,
including positions at Pomboy Capital (1995 to 1998) as a precious metals
equity analyst and portfolio manager and Comstock Partners, where he was an
equity analyst. Mr. DeFranco received a B.A. from Bates College and an M.B.A.
from Columbia University Graduate School of Business.
Prudential Jennison Portfolio
This Portfolio has been managed by Messrs. Segalas and Del Balso and Ms.
McCarragher of Jennison since 1999. For more information about these managers,
see "Diversified Conservative Growth Portfolio" above.
Small Capitalization Stock Portfolio
Wai Chiang, Vice President of Prudential Investments, has managed this
Portfolio since its inception in 1995. Mr. Chiang has been employed by
Prudential as a portfolio manager since 1986.
Stock Index Portfolio
John Moschberger, CFA, Vice President of Prudential Investments, has
managed this Portfolio since 1990. For more information about Mr. Moschberger,
see "Conservative Balanced Portfolio and Flexible Managed Portfolio" above.
7
<PAGE>
Prudential Value Portfolio (formerly Equity Income Portfolio)
Thomas Kolefas and Bradley Goldberg are the co-portfolio managers of the
portion of the Portfolio assigned to Jennison. For more information about Mr.
Kolefas, see "Diversified Conservative Growth Portfolio" above. For more
information about Mr. Goldberg, see "Equity Portfolio" above.
James Giblin, a Chartered Financial Analyst, will manage the portion of the
Portfolio assigned to Deutsche. Mr. Giblin joined Deutsche in 1995 with 22
years of investment experience, including 15 years as a portfolio manager for
Cigna Equity Advisors. He received his B.S. from Pennsylvania State University
and an M.B.A. from the Wharton School, University of Pennsylvania.
Neil A. Kilbane will manage the portion of the Portfolio assigned to Key.
Mr. Kilbane is a Senior Portfolio Manager and Managing Director for Key, and
is a Chartered Financial Analyst. Mr. Kilbane began his investment career with
Key in 1995, and prior to that was employed by Duff & Phelps Investment
Management Company and National City Bank. Mr. Kilbane holds a B.S. from
Cleveland State University, an M.S. from Kansas State University, and an
M.B.A. from Tulsa University.
20/20 Focus Portfolio
Spiros Segalas, Director, President and Chief Investment Officer of
Jennison, manages the growth portion of the Portfolio. For more information
about Mr. Segalas, see "Diversified Conservative Growth Portfolio" above.
Bradley Goldberg, Executive Vice President of Jennison, manages the value
portion of the Portfolio. For more information about Mr. Goldberg, see "Equity
Portfolio" above.
Natural Resources Portfolio: Change to Non-Diversified
Shareholders of the Fund's Natural Resources Portfolio have changed this
portfolio from a diversified portfolio to a non-diversified portfolio. As a
non-diversified portfolio, the Natural Resources Portfolio can accumulate
larger positions in single issuers. Thus, the Portfolio's performance may be
tied more closely to the success or failure of a smaller group of portfolio
holdings.
8
