<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[ ] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Prudential Equity Income Fund
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
PRUDENTIAL EQUITY INCOME FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
----------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------
To Our Shareholders:
Notice is hereby given that a Special Meeting of Shareholders (the Meeting)
of Prudential Equity Income Fund (the Fund) will be held on September 14,
2000, at 10:00 a.m. at 100 Mulberry Street, Gateway Center Three, Newark, New
Jersey 07102, for the following purposes:
1. To amend the investment objective of the Fund.
2. To approve amendments to the Fund's fundamental investment restrictions
relating to:
(a) the making of loans; and
(b) investments in securities of other investment companies.
3. To ratify or reject the selection of PricewaterhouseCoopers LLP as
independent accountants of the Fund for the fiscal year ending October 31,
2000.
4. To consider and act upon any other business as may properly come before
the Meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on June 23, 2000 as
the record date for the determination of shareholders of the Fund entitled to
vote at the Meeting or any adjournment thereof.
Marguerite E. H. Morrison
Secretary
Dated: July 31, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING IN YOUR PROXY PROMPTLY. SHAREHOLDERS ALSO CAN VOTE
THROUGH THE INTERNET OR BY TELEPHONE USING THE 12-DIGIT "CONTROL" NUMBER THAT
APPEARS ON THE ENCLOSED PROXY.
<PAGE>
PRUDENTIAL EQUITY INCOME FUND
GATEWAY CENTER THREE
NEWARK, NEW JERSEY 07102
----------------------
PROXY STATEMENT
----------------------
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 14, 2000, AT 10:00 A.M.
This Proxy Statement is furnished by the Board of Trustees of Prudential
Equity Income Fund (the Fund) in connection with the solicitation of proxies
for use at the Special Meeting of Shareholders (the Meeting) to be held on
September 14, 2000 at 10:00 a.m at 100 Mulberry Street, Gateway Center Three,
Newark, New Jersey 07102. The Fund's principal executive office is located at
100 Mulberry Street, Gateway Center Three, Newark, New Jersey 07102. The
purposes of the Meeting are to consider proposals to (1) change the Fund's
investment objective, (2) change fundamental investment restrictions relating
to (a) the making of loans, and (b) investments in securities of other
investment companies and (3) ratify the selection of independent accountants.
It is expected that the Notice of Special Meeting, Proxy Statement and
accompanying form of proxy will first be mailed to shareholders of record on
or about August 4, 2000. To receive a copy of the most recent annual and semi-
annual report, contact: Prudential Mutual Fund Services LLC, P.O. Box 8098,
Philadelphia, PA 19101, or call (800) 225-1852.
If the accompanying form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. However, if no instructions are specified, shares
will be voted FOR the proposals. A proxy may be revoked at any time prior to
the time it is voted by written notice to the Secretary of the Fund or by
attendance at the Meeting. In addition, a shareholder can revoke a prior proxy
simply by voting again--using the original proxy card, by toll-free telephone
call, or visiting the Fund's Web site listed below. If sufficient votes to
approve one or more of the proposed items are not received or if a quorum is
not present, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of a majority of those shares present at the
Meeting or represented by proxy and will not require notice other than
announcement at the Meeting. When voting on a proposed adjournment, the
persons named as proxies will vote for the proposed adjournment all shares
that they are entitled to vote with respect to each item, unless directed to
disapprove the item, in which case such shares will be voted against the
proposed
1
<PAGE>
adjournment. In the event that a Meeting is adjourned, the same procedures
will apply at a later Meeting date.
The Board of Trustees of the Fund has fixed the close of business on June
23, 2000 as the record date. Shareholders of record on that day are entitled
to notice of, and to vote at, the Meeting. On that date, the Fund had
33,607,307 Class A shares, 41,846,244 Class B shares, 1,534,645 Class C shares
and 8,495,498 Class Z shares, of beneficial interest outstanding and entitled
to vote. Each share will be entitled to one vote at the Meeting (and such
shareholders of record holding fractional shares, if any, shall have
proportionate voting rights).
As of June 23, 2000, the beneficial owners, directly or indirectly, of more
than 5% of the outstanding shares of any class of beneficial interest were:
Prudential Trust Company FBO Marsh, Inc., 34 West Sixth Street, Suite 1100,
Cincinnati, OH 45202, who held 119,516 Class C shares of the Fund (8% of the
outstanding Class C shares); Boston Safe Deposit & Trust, as Trustee K-Mart
401(k) PRT S Core Account, 1 Cabot Road, Medford, MA 02155, who held 4,772,495
Class Z shares of the Fund (or 56% of the outstanding Class Z shares),
Prudential Trust Company FBO PRU-DC Trust Accounts, Attn: John Surdy, 30
Scranton Office Park, Moosic, PA 18507, who held 1,853,826 Class Z shares of
the Fund (or 22% of the outstanding Class Z shares).
As of June 23, 2000, the Trustees and officers of the Fund, as a group,
owned less than 1% of each class of outstanding shares of the Fund.
Proposals 1 and 2 described in this Proxy Statement require approval by "a
majority of the outstanding voting securities" of the Fund, as defined in the
Investment Company Act of 1940, as amended (the Investment Company Act). This
means the lesser of (A) 67% or more of the shares of the Fund present at the
Meeting, if the holders of more than 50% of the outstanding shares of the Fund
are present or represented by proxy, or (B) more than 50% of the outstanding
shares of the Fund. Each "broker non-vote" (that is, a proxy from a broker or
nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares on a particular
matter with respect to which the broker or nominee does not have discretionary
power) and abstention will be considered present for purposes of determining
the existence of a quorum for the transaction of business, but will have the
effect of a vote against these proposals. A quorum requires the presence, in
person or by proxy, of the holders of record of a majority of the outstanding
shares of the Fund. Proposal 3 requires approval by a majority of the votes
cast.
The expenses of solicitation will be borne by the Fund and will include
reimbursement of brokerage firms and others for expenses in forwarding proxy
solicitation material to beneficial owners. The solicitation of proxies will
be largely
2
<PAGE>
by mail but may include, without cost to the Fund, telephonic, telegraphic,
Internet or oral communications by regular employees of Prudential Securities
Incorporated (Prudential Securities). In addition, the Board of Trustees of
the Fund has authorized management to retain, at their discretion, Shareholder
Communications Corporation, a proxy solicitation firm, to assist in the
solicitation of proxies for this Meeting. The cost of solicitation, including
specified expenses, is not expected to exceed $76,000 and will be borne by the
Fund.
Shareholders can vote in any one of four ways: (A) by mail, with the
enclosed proxy card, (B) in person at the Meeting, (C) by telephone, with a
toll-free call to the number listed on the enclosed proxy card, and (D)
through the Internet at www.proxyvote.com. Shareholders are encouraged to vote
by Internet or telephone, using the 12-digit "control" number that appears on
the enclosed proxy card. After inputting this number, shareholders will be
prompted to provide their voting instructions on each proposal. Shareholders
will have an opportunity to review their voting instructions and make any
necessary changes before submitting their voting instructions and terminating
their telephone call or Internet link. Shareholders who vote on the Internet,
in addition to confirming their voting instructions prior to submission, will
have the option to receive an e-mail confirming their voting instructions.
These procedures, and certain other procedures that may be used, are designed
to authenticate shareholders' identities, to allow shareholders to authorize
the voting of their shares in accordance with instructions and to confirm that
their instructions have been properly recorded.
Prudential Investments Fund Management LLC (PIFM or the Manager), Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, serves as
the Fund's Manager under a management agreement dated as of March 1, 1988, and
amended and restated as of January 1, 2000 (the Management Agreement).
Investment advisory services are provided to the Fund by PIFM through its
affiliate, The Prudential Investment Corporation, doing business as Prudential
Investments (PI or the Investment Adviser), Prudential Plaza, 751 Broad
Street, Newark, New Jersey 07102, under a Subadvisory Agreement dated March 1,
1988, as amended and restated as of January 1, 2000. Both PIFM and PI are
indirect, wholly owned subsidiaries of The Prudential Insurance Company of
America (Prudential). As of June 30, 2000, PIFM managed and/or administered
45 open-end and 22 closed-end management investment companies, with assets of
approximately $75.5 billion. The Fund has a Board of Trustees which, in
addition to overseeing the actions of the Fund's Manager and Investment
Adviser, decides upon matters of general policy.
Prudential Investment Management Services LLC (PIMS), Gateway Center Three,
100 Mulberry Street, Newark, New Jersey 07102-4077, acts as the distributor of
the shares of the Fund.
3
<PAGE>
Upon request, the Fund will reimburse nominees for their reasonable expenses
in forwarding proxy materials to beneficial owners of the Fund's shares.
Please let the Fund know the number of copies needed and submit expense
invoices for the Fund's review to 100 Mulberry Street, 4th Floor, Gateway
Center Three, Newark, New Jersey 07102.
PROPOSAL NO. 1
TO AMEND THE INVESTMENT
OBJECTIVE OF THE FUND
The Board of Trustees is submitting for approval by shareholders of the Fund
the following proposal to amend the investment objective of the Fund. The
Board of Trustees approved this proposal at a meeting held on May 2, 2000. For
the reasons described below, the Board of Trustees believes that the proposed
changes are in the best interests of shareholders and recommends that
shareholders approve the proposed amendment. The Fund's investment objective
is a fundamental policy that cannot be changed without shareholder approval.
The current investment objective for the Fund is capital appreciation and
current income. The Board of Trustees has approved, and recommends that the
shareholders of the Fund approve, an amendment to remove the income component
of the Fund's investment objective. To reflect the change, the Fund's
prospectus will state: "The Fund's investment objective is capital
appreciation."
The Manager and Investment Adviser have proposed the change in investment
objective to allow the Fund to take greater advantage of capital appreciation
opportunities. The proposed change in investment objective will allow more
flexibility to the Investment Adviser to invest for capital appreciation
rather than having to focus on income-generating securities. Further, the
Fund's management believes that repositioning the Fund in the Large-Cap Value
category provides shareholders with exposure to an asset category that has
historically stronger performance than the Equity Income category.
At the special Board meeting held on May 2, 2000, the Manager and Investment
Adviser proposed and the Board of Trustees approved that the Fund's investment
focus be changed to a "large capitalization value" approach so as to increase
the prospects for enhanced performance. In addition, the Board approved a
change in the Fund's name from Prudential Equity Income Fund to "Prudential
Value Fund," coincident with shareholder approval of this proposal.
For these reasons, the Board believes that the proposed changes are in the
best interests of shareholders and therefore recommends that shareholders
approve the proposed amendment.
4
<PAGE>
If the change in investment objective is approved by shareholders, the
Investment Adviser has indicated that a primary difference in how it may
manage the Fund would be in purchasing fewer income-producing securities. As a
result of this change, the Investment Adviser may, depending on market
conditions, invest a greater percentage of the Fund's assets in securities of
companies with a larger capitalization than it has purchased in recent years.
Investment in these securities ordinarily involves less market risk than
investment in equity securities of medium or small-sized companies. Therefore,
if the change is approved, the Fund may be subject to more risk to the extent
that it would be investing a greater proportion of its assets in equity
securities, but less risk in that it would expect to focus on securities of
larger-sized companies.
REQUIRED VOTE
Approval of this Proposal No. 1 requires the affirmative vote of a majority
of the Fund's outstanding voting securities, as defined in the Investment
Company Act.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL
NO. 1.
PROPOSAL NO. 2
TO APPROVE AMENDMENTS TO CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Board of Trustees is submitting for approval by shareholders of the Fund
the following proposals to amend two of the Fund's fundamental investment
restrictions relating to (a) the making of loans, and (b) investments in
securities of other investment companies.
For the reasons described below, the Board of Trustees believes that the
proposed changes are in the best interests of the shareholders and recommends
that shareholders approve each of the proposed amendments. Fundamental
investment restrictions may be changed only with shareholder approval.
If the proposed changes to the Fund's fundamental investment restrictions
are approved by shareholders at the Meeting, the Fund's prospectus and
statement of additional information will be revised as appropriate to reflect
the changes. The changes proposed in Proposals No. 2(a) and 2(b) will not
result in a change to the investment objective or operating policies of the
Fund.
PROPOSAL NO. 2(A): AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO THE FUND'S ABILITY TO ENGAGE IN LENDING TRANSACTIONS
The Fund's current fundamental investment restriction concerning making
loans, which appears as investment restriction number 12 in the Fund's current
5
<PAGE>
statement of additional information, states that the Fund may not:
Make loans, except through repurchase agreements and loans of
portfolio securities (limited to 33% of the Fund's total assets).
The proposed change will amend the restriction relating to lending
transactions by adding a clause (which is in boldface for ease of reference)
that will allow for greater flexibility in lending transactions. Under the
proposed amendment, the Fund may not:
Make loans, except through repurchase agreements and loans of
portfolio securities (limited to 33% of the Fund's total assets) AND
AS OTHERWISE PERMITTED BY EXEMPTIVE ORDER OF THE SECURITIES AND
EXCHANGE COMMISSION.
The proposed amendment to the Fund's fundamental investment restriction
would facilitate the future development and adoption of an interfund lending
program with other Prudential Funds.
The Fund (and other Prudential Funds) intends to apply to the SEC for an
exemption from interfund borrowing, pursuant to authorization by the Fund's
Board of Trustees obtained in November 1999. There is, of course, no assurance
that the SEC would grant such request. If the SEC did grant the request, the
Fund would be allowed to borrow from other Prudential Funds. The ability to
engage in borrowing transactions with other participating Prudential Funds as
part of a program, referred to as the "interfund lending program," may allow
the Fund to obtain lower interest rates on money borrowed for temporary or
emergency purposes.
Approval of this Proposal No. 2(a) will not by itself result in
implementation of the interfund lending program. Among other things, any such
program would be subject to receipt of an SEC exemptive order. In addition,
the Fund only would engage in lending for cash management purposes.
If Proposal 2(a) is adopted and the Fund were to participate in an interfund
lending program, there is a risk that a borrowing fund could have a loan
recalled on one day's notice and the borrowing fund might then have to borrow
from a bank at a higher interest rate if money could not be borrowed from
another Prudential Fund. There is also a risk that a lending fund could
experience a delay in obtaining prompt repayment of a loan. A lending fund
would not necessarily have received collateral for its loan, although it could
require that collateral be provided as a condition for making an interfund
loan. A delay in obtaining prompt payment could cause a lending fund to miss
an investment opportunity or to incur costs to borrow money to replace the
delayed payment.
In determining to recommend this Proposal No. 2(a) to shareholders for
approval, the Board of Trustees considered that the benefits to the Fund of
6
<PAGE>
participating in the program outweigh the possible risks of such
participation. The Board of Trustees considered that the interfund lending
program: (i) may benefit the Fund by providing it with greater flexibility to
engage in lending transactions; and (ii) could facilitate the Fund's ability
to earn a higher return on short-term investments by allowing it to lend cash
to other Prudential Funds. Implementation of interfund lending would be
accomplished consistent with applicable regulatory requirements, including the
provisions of any order the SEC might issue to the Fund and to other
Prudential Funds. Although the Fund has not yet applied for this order, it is
anticipated that one of the conditions of the order will be that the Fund may
not lend more than 15% of its net assets as part of the interfund lending
program. There can be no assurance that any such order would be granted, even
if applied for.
Although the Fund does not currently intend to apply for any other SEC
exemptive order with respect to this restriction, the change in the investment
restriction, if approved by shareholders, will enable the Fund to further
amend this restriction without shareholder approval (but subject to the
approval of the Board of Trustees) by applying for other SEC exemptive orders.
This may subject the Fund to additional risks. The Fund will continue to be
able to engage in loans of portfolio securities in an amount up to 33% of its
total assets, whether or not shareholders approve Proposal 2(a).
PROPOSAL NO. 2(B): AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO THE FUND'S ABILITY TO INVEST IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund's current fundamental investment restriction concerning investments
in securities of other investment companies, which appears as investment
restriction number 10 in the Fund's current statement of additional
information, states that the Fund may not:
Invest in securities of other registered investment companies,
except by purchases in the open market involving only customary
brokerage commissions and as a result of which not more than 10% of
its total assets (determined at the time of investment) would be
invested in such securities, or except as part of a merger,
consolidation or other acquisition.
The proposed change would amend the restriction by deleting the italicized
reference to the circumstances under which the Fund may invest in securities
of other investment companies and replacing it with a clause (which is in
boldface below for ease of reference) that will allow for greater flexibility
in these types of transactions. The added clause contains a parenthetical
clause at the end which describes the current limitations with respect to
these types of transactions. Under the proposed amendment, the Fund may not:
7
<PAGE>
Invest in securities of other registered investment companies,
except AS PERMITTED UNDER THE INVESTMENT COMPANY ACT OF 1940 AND THE
RULES THEREUNDER, AS AMENDED FROM TIME TO TIME, OR BY ANY EXEMPTIVE
RELIEF GRANTED BY THE SECURITIES AND EXCHANGE COMMISSION.
(CURRENTLY, UNDER THE INVESTMENT COMPANY ACT OF 1940, THE FUND MAY
INVEST IN SECURITIES OF OTHER INVESTMENT COMPANIES SUBJECT TO THE
FOLLOWING LIMITATIONS: THE FUND MAY HOLD NOT MORE THAN 3% OF THE
OUTSTANDING VOTING SECURITIES OF ANY ONE INVESTMENT COMPANY, MAY NOT
HAVE INVESTED MORE THAN 5% OF ITS TOTAL ASSETS IN ANY ONE INVESTMENT
COMPANY AND MAY NOT HAVE INVESTED MORE THAN 10% OF ITS TOTAL ASSETS
IN SECURITIES OF ONE OR MORE INVESTMENT COMPANIES.)
The proposed amendment to the Fund's fundamental investment restriction
would allow the Fund to invest in securities of other investment companies to
the extent consistent with applicable law or any exemptive relief granted by
the SEC. The Fund has already received an exemptive order from the SEC
permitting it to invest cash collateral from securities lending transactions
and uninvested cash, in an amount not to exceed 25% of the Fund's total
assets, in other registered open-end investment companies advised by PIFM
(Investment Funds). The Investment Funds are money market funds or open-end
short-term bond funds with a portfolio maturity of three years or less. Shares
of certain Investment Funds may be offered and sold to the Fund only in
private transactions and not through the open market.
The Board of Trustees anticipates that a primary benefit of investing in
Investment Funds will be the ability to obtain higher yields than would be
available from current investment alternatives. It is also anticipated that by
investing in Investment Funds, the Fund would have access to a lower cost
alternative for making short-term liquid investments than is presently
available. The SEC order is subject to a number of conditions designed to
ensure that there will not be duplication of fees and expenses by the Fund and
an Investment Fund or conflicts of interest as a result of any such
investment. One condition of the order is that the Fund may not invest
uninvested cash in an Investment Fund in an amount in excess of 25% of the
Fund's total assets.
Although the Fund does not currently intend to apply for any other SEC
exemptive order with respect to this restriction, the change in the investment
restriction, if approved by shareholders, will enable the Fund to further
amend this restriction without shareholder approval (but subject to the
approval of the Board of Trustees) by applying for other SEC exemptive orders.
This may subject the Fund to additional risks.
If the Fund's shareholders do not approve the proposed amendment of the
fundamental investment restriction relating to investment in other investment
8
<PAGE>
companies, the Fund will not be able to take advantage of the exemptive order
described above.
REQUIRED VOTE
Approval of each of Proposals No. 2(a) and 2(b) requires the affirmative
vote of a majority of the Fund's outstanding voting securities, as defined in
the Investment Company Act.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS
NO. 2(A) AND 2(B).
TO RATIFY INDEPENDENT ACCOUNTANTS
PROPOSAL NO. 3
The Board of Trustees of the Fund, including a majority of the members of
the Board of Trustees who are not interested persons of the Fund, have
selected PricewaterhouseCoopers LLP as independent accountants for the Fund
for the Fund's fiscal year ending October 31, 2000. PricewaterhouseCoopers LLP
has served as independent accountants for the Fund for the Fund's fiscal year
ended October 31, 1999 and for each year since 1996. The ratification of the
selection of independent accountants is to be voted on at the Meeting and it
is intended that the persons named in the accompanying proxy vote for
PricewaterhouseCoopers LLP. No representative of PricewaterhouseCoopers LLP is
expected to be present at the Meeting.
The Board of Trustees' policy regarding engaging independent accountants'
services is that management may engage the Fund's principal independent
accountants to perform any service(s) normally provided by independent
accounting firms, provided that such service(s) meets any and all of the
independence requirements of the American Institute of Certified Public
Accountants and the Securities and Exchange Commission. The Audit Committee
will review and approve services provided by the independent accountants prior
to their being rendered. The Board of Trustees also receives a report from its
Audit Committee relating to all services after they have been performed by the
Fund's independent accountants.
REQUIRED VOTE
The affirmative vote of at least a majority of the shares present, in person
or by proxy, at the Meeting is required for ratification.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 3.
----------------------
9
<PAGE>
OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of shareholders arise,
including any question as to an adjournment of the Meeting, the persons named
in the enclosed proxy will vote thereon according to their best judgment in
the interests of the Fund.
Notwithstanding the approval or disapproval of the proposals described
above, as in the past, the Board of Trustees does not intend to hold annual
meetings of shareholders of the Fund. The Board of Trustees will call meetings
of shareholders as may be required under the Investment Company Act or as they
may determine in their discretion. The Fund's By-Laws require the Secretary of
the Fund to call a meeting of shareholders of the Fund when requested to do
so, in writing, by shareholders holding in the aggregate not less than 10% of
the outstanding shares having voting rights of the Fund. If a shareholder
wishes to present a proposal to be included in the proxy statement for the
next meeting of shareholders of the Fund, such proposal must be received by
the Fund a reasonable time before the solicitation is to be made.
Marguerite E.H. Morrison
Secretary
Dated: July 31, 2000
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. SHAREHOLDERS CAN ALSO VOTE THROUGH THE INTERNET OR BY TELEPHONE
USING THE 12-DIGIT "CONTROL" NUMBER THAT APPEARS ON THE ENCLOSED PROXY.
10
<PAGE>
<TABLE>
<S> <C>
PRUDENTIAL EQUITY INCOME FUND
PRUDENTIAL INVESTMENTS Gateway Center Three
GATEWAY CENTER THREE Newark, New Jersey 07102
100 MULBERRY STREET, 4TH FLOOR
NEWARK, NJ 07102-4077 PROXY
Special Meeting of Shareholders (Meeting)
September 14, 2000, 10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
The undersigned hereby appoints Robert F. Gunia, Grace C.
Torres and Marguerite E.H. Morrison as Proxies, each with
the power of substitution, and hereby authorizes each of them
to represent and to vote, as designated below, all the shares
of beneficial interest of the Fund held of record by the
undersigned on June 23, 2000 at the Meeting to be held on
September 14, 2000 or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPER-
LY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. THE PROXY WILL BE VOTED FOR PROPOSALS
NO. 1, 2(A) AND (B) AND 3 IF YOU DO NOT SPECIFY OTHERWISE. PLEASE
REFER TO THE PROXY STATEMENT DATED JULY 31, 2000 FOR DISCUSSION
OF THE PROPOSALS.
IF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD
WHERE INDICATED AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the Meeting or any
adjournment thereof.
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation,
please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership by authorized
person.
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have
this Proxy card at hand.
2) Call 1-800-690-6903 toll free.
3) Enter the 12-digit control number
set forth on the right side of this
Proxy card and follow the simple
instructions. SHARES
TO VOTE BY INTERNET CONTROL NUMBER
1) Read the Proxy Statement and have
this Proxy card at hand.
2) Go to Web site www.proxyvote.com
3) Enter the 12-digit control number
set forth on the right side of
this Proxy card and follow the
simple instructions.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: PRUEIF KEEP THIS PORTION FOR YOUR RECORDS
------------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL EQUITY INCOME FUND
For address changes, please check this box [ ]
and write them on the back.
The Board of Trustees recommends a vote FOR each of the proposals.
Vote On Proposals For Against Abstain 2. To approve amendments to the For Against Abstain
Fund's fundamental investment
1. To approve an amendment to the restrictions relating to:
investment objective of Prudential
Equity Income Fund (the Fund). [ ] [ ] [ ] (a) the making of loans; and [ ] [ ] [ ]
(b) investments in securities
of other investment
companies.
3. To ratify the selection
of independent
accountants. [ ] [ ] [ ]
Please be sure to sign and date this Proxy.
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
</TABLE>
