PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND INC, DEFS14A, 1994-04-22

PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND INC
DEFS14A, 1994-04-22

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INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the registrant /X/
Filed by a party other than the registrant /_/

Check the appropriate box:

/ / Preliminary proxy statement

/x/ Definitive proxy statement

/_/ Definitive additional materials

/_/ Soliciting material pursuant to ss.240.14a-11(c) or ss.240.14a-12

PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
--------------------------------------------------
(Name of Registrant as Specified in its Charter)

PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
--------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).

/_/ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

PRUDENTIAL MUTUAL FUNDS
One Seaport Plaza
New York, NY 10292

April 18, 1994

RE: IMPORTANT PROXY MATERIAL--IMMEDIATE ACTION REQUIRED

Dear Shareholder:

We are pleased to enclose a notice and proxy statement for a special
meeting of shareholders of the Prudential Mutual Funds to be held on June 23,
1994. You are being asked to approve, among other things, a proposal to permit
the automatic conversion of Class B shares to Class A shares after a specified
number of years. Thereafter, converted shares will be subject to the lower
annual distribution-related fees applicable to Class A shares.

The proxy statement also includes proposals to revise the current
distribution and service plans for Class A and Class B shares and other
proposals recommended by the Fund's Manager and Subadviser.

Please read the enclosed materials carefully. The proxy statement
discusses each proposal in detail and the reasons why the Board of Direc-
tors/Trustees recommended that you vote in favor of those proposals.

The Fund is using Shareholder Communications Corporation (SCC), a
professional proxy solicitation firm, to assist shareholders in the voting
process. If we have not yet received your proxy card as the date of the
meeting approaches, you may receive a telephone call from SCC reminding you to
exercise your right to vote.

Your vote is critical in allowing your Fund to hold the meeting as
scheduled. Please take a moment now to sign and return the proxy card in the
enclosed postage-paid envelope. If less than a majority of the eligible shares
are represented, the Fund, at shareholders' expense, will have to continue to
solicit votes until a quorum is obtained. Your prompt attention in this matter
benefits all shareholders. Thank you.

Sincerely,

Lawrence C. McQuade
President

******************************************************************************
* SPECIAL NOTE: If you hold shares in more than one Prudential fund, *
* you will receive a separate proxy package for each Fund you hold. *
* Please be sure to sign and return each proxy card regardless of how *
* many you receive. *
******************************************************************************
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PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, NY 10292
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
--------------------

To our Shareholders:

Notice is hereby given that a Special Meeting of Shareholders of Prudential
Intermediate Global Income Fund, Inc. (the Fund), will be held at 3:00 P.M. on
June 23, 1994, at 199 Water Street, New York, N.Y. 10292, for the following
purposes:

1. To elect Directors.

2. To approve an amendment of the Fund's Articles of Incorporation to
permit a conversion feature for Class B Shares.

3. To approve an amended and restated Class A Distribution and Service
Plan.

4. To approve an amended and restated Class B Distribution and Service
Plan.

5. To approve a change in the Fund's investment objective to seek to
maximize total return.

6. To approve an amendment of the Fund's investment restrictions to
clarify that collateral arrangements with respect to interest rate swap
transactions, reverse repurchase agreements and dollar roll transactions
are not deemed to be the issuance of a senior security or the pledge of
assets.

7. To ratify the selection by the Board of Directors of Price
Waterhouse as independent accountants for the year ending December 31,
1994.

8. To transact such other business as may properly come before the
Meeting or any adjournments thereof.

Only shares of Common Stock of the Fund of record at the close of business
on March 31, 1994 are entitled to notice of and to vote at this Meeting or any
adjournment thereof.

S. Jane Rose
April 18, 1994 Secretary

- - --------------------------------------------------------------------------------
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.
- - --------------------------------------------------------------------------------
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PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
ONE SEAPORT PLAZA
NEW YORK, N.Y. 10292

--------------------
PROXY STATEMENT
--------------------

This statement is furnished by the Board of Directors of Prudential
Intermediate Global Income Fund, Inc. (the Fund), in connection with its
solicitation of proxies for use at a Special Meeting of Shareholders to be held
at 3:00 P.M. on June 23, 1994 at 199 Water Street, New York, New York 10292, the
Fund's principal executive office. The purpose of the Meeting and the matters to
be acted upon are set forth in the accompanying Notice of Special Meeting.

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 election of Directors and for each of the other 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. If
sufficient votes to approve one or more of the proposed items are not received,
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. 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 adjournment.

If a Proxy that is properly executed and returned accompanied by
instructions to withhold authority to vote represents a 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), the shares represented thereby will be considered
not to be present at the Meeting for purposes of determining the existence of a
quorum for the transaction of business and be deemed not cast with respect to
such proposal. If no instructions are received by the broker or nominee from the
shareholder with reference to routine matters, the shares represented thereby
may be considered for purposes of determining the existence of a quorum for the
transaction of business and will be deemed cast with respect to such proposal.
Also, a properly executed and returned Proxy marked with an abstention will be
considered present at the Meeting for purposes of determining the existence of a
quorum for the transaction of business. However, abstentions and broker
"non-votes" do not constitute a vote "for" or "against" the matter, but have
the effect of a negative vote on matters which require approval by a requisite
percentage of the outstanding shares.

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The close of business on March 31, 1994 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at,
the Meeting. On that date, the Fund had 40,358,280 shares of Common Stock
outstanding and entitled to vote, consisting of 35,796,672 Class A shares and
4,561,608 Class B shares. Each share will be entitled to one vote at the
Meeting. It is expected that the Notice of Special Meeting, Proxy Statement and
form of Proxy will first be mailed to shareholders on or about April 22, 1994.

Management does not know of any person or group who owned beneficially 5%
or more of the outstanding shares of either class of Common Stock of the Fund as
of March 31, 1994.

The expense 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 by mail. The Board of Directors of the Fund has authorized management to
retain Shareholder Communications Corporation, a proxy solicitation firm, to
assist in the solicitation of proxies for this Meeting. This cost, including
specified expenses, is not expected to exceed $29,500 and will be borne by the
Fund. In addition, solicitation may include, without cost to the Fund,
telephone, telegraphic or oral communication by regular employees of Prudential
Securities Incorporated (Prudential Securities) and its affiliates.

ELECTION OF DIRECTORS
(Proposal No. 1)

At the Meeting, eight Directors will be elected to hold office for a term
of unlimited duration until their successors are elected and qualify. It is the
intention of the persons named in the accompanying form of Proxy to vote for the
election of John C. Davis, Lawrence C. McQuade, Thomas A. Owens, Richard A.
Redeker, Robert J. Schultz, Gerald A. Stahl, Stephen Stoneburn, and Robert H.
Wellington, all of whom are currently members of the Board of Directors. Each of
the nominees has consented to be named in this Proxy Statement and to serve as a
Director if elected. All of the Directors of the Fund except Richard A. Redeker
and Gerald A. Stahl have previously been elected by the shareholders. All of the
Directors except for Messrs. Owens, Redeker and Stahl have served as Directors
since March 20, 1988. Mr. Owens has served as a Director since July 27, 1988,
Mr. Stahl has served as a Director since May 12, 1993, and Mr. Redeker has
served as a Director since November 17, 1993.

The Board of Directors has no reason to believe that any of the nominees
named above will become unavailable for election as a Director, but if that
should occur before the Meeting, proxies will be voted for such persons as the
Board of Directors may recommend.

The Fund's By-laws provide that the Fund will not be required to hold
annual meetings of shareholders if the election of Directors is not required
under the Investment Company Act of 1940, as amended (the Investment Company
Act). It is the present intention of the Board of Directors of the Fund not to
hold annual meetings of shareholders unless such shareholder action is required.

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INFORMATION REGARDING DIRECTORS

Shares of
Name, age, business Common Stock
experience during the past Position owned at
five years and directorships with Fund March 31 1994
---------------------------- --------- -------------

John C. Davis (73), Retired (since December Director -0-
1982); formerly Senior Vice President,
Executive Department and Director, The
Atchison, Topeka and Santa Fe Railway Company
and Vice President and Director, Santa Fe
Industries, Inc.; Director of Prudential
Growth Fund, Inc.,Prudential Intermediate
Global Income Fund, Inc. and Prudential
MoneyMart Assets.

*Lawrence C. McQuade (66), Vice Chairman of President 1,511
Prudential Mutual Fund Management, Inc. (PMF) and
(since 1988); Managing Director, Investment Director
Banking, Prudential Securities (1988-1991);
Director of Quixote Corporation (since February
1992) and BUNZL, PLC (since June 1991); formerly
Director of Crazy Eddie Inc. (1987-1990) and
Kaiser Tech, Ltd. and Kaiser Aluminum and
Chemical Corp. (March 1987-November 1988);
formerly Executive Vice President and
Director of WR Grace & Company; President and
Director of Prudential Adjustable Rate
Securities Fund, Inc., Prudential Equity
Fund, Inc., Prudential Global Fund, Inc.,
Prudential Global Genesis Fund, Prudential
Global Natural Resources Fund, Prudential
GNMA Fund, Prudential Government Plus Fund,
Prudential Growth Fund, Inc., Prudential
Growth Opportunity Fund, Prudential High
Yield Fund, Prudential IncomeVertible(R) Fund,
Inc., Prudential Institutional Liquidity
Portfolio, Inc., Prudential Intermediate
Global Income Fund, Inc., Prudential
MoneyMart Assets, Prudential Multi-Sector
Fund, Inc., Prudential National Municipals
Fund, Prudential Pacific Growth Fund, Inc.,
Prudential Short-Term Global Income Fund,
Inc., Prudential Special Money Market Fund,
Prudential Structured Maturity Fund,
Prudential Tax-Free Money Fund, Prudential
Utility Fund, The Global Government Plus
Fund, Inc., The Global Yield

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Shares of
Name, age, business Common Stock
experience during the past Position owned at
five years and directorships with Fund March 31, 1994
---------------------------- --------- --------------

Fund, Inc. and The High Yield Income
Fund, Inc.; President and Trustee of The
BlackRock Government Income Trust, Command
Government Fund, Command Money Fund, Command
Tax-Free Fund, Prudential California
Municipal Fund, Prudential Equity Income
Fund, Prudential FlexiFund, Prudential
Government Securities Trust, Prudential
Municipal Bond Fund, Prudential Municipal
Series Fund, Prudential U.S. Government Fund,
and The Target Portfolio Trust.

Thomas A. Owens, Jr. (71), Consultant; Director Director 2,092
Prudential Adjustable Rate Securities Fund,
Inc., Prudential Global Fund, Inc.,
Prudential Government Plus Fund,
Prudential Growth Fund, Inc., Prudential
IncomeVertible(R) Fund, Inc., Prudential
Intermediate Global Income Fund, Inc.,
Prudential MoneyMart Assets, Prudential
Pacific Growth Fund, Inc., Prudential
Short-Term Global Income Fund, Inc.,
Prudential Structured Maturity Fund and
Prudential Utility Fund; Trustee of
Prudential U.S. Government Fund.

*Richard A. Redeker (50), President, Chief Director -0-
Executive Officer and Director (since October
1993), PMF; Executive Vice President,
Director and Member of the Operating
Committee (since October 1993), Prudential
Securities; Director (since October 1993) of
Prudential Securities Group, Inc. (PSG);
formerly Senior Executive Vice President and
Director of Kemper Financial Services, Inc.
(September 1978-September 1993); Director of
Global Utility Fund, Inc., Prudential
Adjustable Rate Securities Fund, Inc.,
Prudential Equity Fund, Inc., Prudential
Global

4<PAGE>
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Shares of
Name, age, business Common Stock
experience during the past Position owned at
five years and directorships with Fund March 31, 1994
---------------------------- --------- --------------

Fund, Inc., Prudential Global Genesis Fund,
Prudential Global Natural Resources Fund,
Prudential GNMA Fund, Prudential Government
Plus Fund, Prudential Growth Fund, Inc.,
Prudential IncomeVertible(R) Fund, Inc.,
Prudential Institutional Liquidity Portfolio,
Inc., Prudential Intermediate Global Income
Fund, Inc., Prudential MoneyMart Assets,
Prudential Multi-Sector Fund, Inc.,
Prudential Pacific Growth Fund, Inc.,
Prudential Short-Term Global Income Fund,
Inc., Prudential Special Money Market Fund,
Prudential Structured Maturity Fund,
Prudential Utility Fund, The Global Yield
Fund,Inc., The Global Government Plus Fund
Inc., and The High Yield Income Fund, Inc.;
Trustee of The BlackRock Government Income
Trust, Command Government Fund, Command Money
Fund, Command Tax-Free Fund, Prudential
California Municipal Fund, Prudential Equity
Income Fund, Prudential FlexiFund, Prudential
Municipal Bond Fund, Prudential Municipal
Series Fund, Prudential U.S. Government Fund,
and The Target Portfolio Trust.

Robert J. Schultz (69), Retired (since January Director -0-
1987); formerly Financial Vice President of
Commonwealth Edison Company (electric power
company); Director of Prudential Growth Fund,
Inc., Prudential IncomeVertible(R) Fund, Inc.,
Prudential Intermediate Global Income Fund,
Inc., Prudential MoneyMart Assets, Prudential
Structured Maturity Fund and Prudential
Utility Fund.

5
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Shares of
Name, age, business Common Stock
experience during the past Position owned at
five years and directorships with Fund March 31, 1994
---------------------------- --------- --------------

Gerald A. Stahl (54), President, Rochester Director -0-
Lumber Company; Director, Prudential Growth
Fund, Inc. and Prudential Intermediate Global
Income Fund, Inc.

Stephen Stoneburn (50), Senior Vice President Director -0-
and Managing Director, Cowles Business Media
(since January 1993); prior thereto, Senior
Vice President (January 1991-December 1992)
and Publishing Vice President (May
1989-December 1990) of Gralla Publications (a
division of United Newspapers, U.K.);
formerly Senior Vice President of Fairchild
Publications, Inc.; Director of Prudential
Growth Fund, Inc., Prudential Intermediate
Global Income Fund, Inc. and Prudential
Special Money Market Fund; Trustee of The
BlackRock Government Income Trust, Command
Government Fund, Command Money Fund and
Command Tax-Free Fund.

Robert H. Wellington (71), Retired (since January Director -0-
1994); formerly Chairman and Chief Executive
Officer, AMSTED Industries, Incorporated
(diversified manufacturer of railroad,
construction and industrial products) Director
of Prudential Growth Fund, Inc., Prudential
Intermediate Global Income Fund, Inc. and
Prudential MoneyMart Assets.

- - --------------
* Indicates "interested" Director, as defined in the Investment Company Act,
by reason of his affiliation with PMF or Prudential Securities.

The Directors and officers of the Fund as a group owned beneficially 3,603
shares of the Fund at March 31, 1994, representing less than 1% of the
outstanding shares of the Fund.

The Fund pays annual compensation of $7,500, plus travel and incidental
expenses, to each of the six Directors not affiliated with PMF or Prudential
Securities. The Directors have the option to receive the Director's fee pursuant
to a deferred fee agreement with the Fund. Under the terms of the agreement, the
Fund accrues daily the amount of such Director's fee which accrues interest at a
rate equivalent to the prevailing rate applicable to 90-day U.S. Treasury Bills
at the beginning of each

6
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calendar quarter or, pursuant to an exemptive order of the Securities and
Exchange Commission (SEC), at the rate of return of the Fund. Payment of
the interest so accrued is also deferred and accruals become payable
at the option of the Director. The Fund's obligation to make payments of
deferred Directors' fees, together with interest thereon, is a general
obligation of the Fund. During the fiscal year ended December 31, 1993 the Fund
paid Directors' fees of approximately $50,000 and travel and incidental expenses
of approximately $4,600.

There were four regular meetings of the Fund's Board of Directors held
during the fiscal year ended December 31, 1993. The Board of Directors presently
has an Audit Committee, the members of which are Messrs. Davis, Owens, Shultz,
Stahl, Stoneburn and Wellington, the Fund's non-interested Directors. The Audit
Committee met twice during the fiscal year ended December 31, 1993. The Audit
Committee makes recommendations to the full Board with respect to the engagement
of independent accountants and reviews with the independent accountants the plan
and results of the audit engagement and matters having a material effect upon
the Fund's financial operations. The Board also has a Nominating Committee,
comprised of the Fund's non-interested Directors, which selects and proposes
candidates for election to the Board of Directors. The Nominating Committee met
twice during the fiscal year ended December 31, 1993. The Nominating Committee
does not consider nominees recommended by shareholders to fill vacancies on the
Board.

During the fiscal year ended December 31, 1993, no Director attended fewer
than 75% of the aggregate of the total number of meetings of the Board of
Directors and any committees thereof of which such Director was a member.

The executive officers of the Fund, other than as shown above, are: Robert
F. Gunia, Vice President, having held office since April 1988; S. Jane Rose,
Secretary, having held office since March 1988; Susan C. Cote, Treasurer and
Principal Financial and Accounting Officer, having held office since April 1990;
and Deborah A. Docs, Assistant Secretary, having held office since July 1989.
Mr. Gunia is 47 years old and is currently Chief Administrative Officer (since
July 1990), Director (since January 1989), Executive Vice President, Treasurer
and Chief Financial Officer of PMF and Senior Vice President of Prudential
Securities. He is also Vice President and Director (since May 1989) of The Asia
Pacific Fund, Inc. Ms. Cote is 39 years old and is Senior Vice President (since
January 1989) of PMF, and a Senior Vice President of Prudential Securities
(since January 1992). Prior thereto, she was Vice President (January
1986-December 1991) of Prudential Securities. Ms. Rose is 48 years old and is
Senior Vice President (since January 1991) and Senior Counsel of PMF and a
Senior Vice President and Senior Counsel of Prudential Securities since July
1992; prior thereto, she was First Vice President (June 1987-December 1990) of
PMF. Ms. Docs is 36 years old and is Vice President and Associate General
Counsel (since January 1993) of PMF; and Vice President and Associate General
Counsel (since January 1993) of Prudential Securities. She was formerly
Associate Vice President (January 1990-December 1992); Assistant Vice President
(January 1989-December 1989) and Assistant

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General Counsel (November 1991-December 1992) of PMF. The executive officers
of the Fund are elected annually by the Board of Directors.

Required Vote

Directors must be elected by a vote of a plurality of the shares present at
the meeting in person or by proxy and entitled to vote thereupon, provided that
a quorum is present.

MANAGEMENT OF THE FUND

The Manager

Prudential Mutual Fund Management, Inc. (PMF or the Manager), One Seaport
Plaza, New York, New York 10292, serves as the Fund's Manager under a management
agreement dated as of October 7, 1991 (the Management Agreement).

The Management Agreement was last approved by the Board of Directors of the
Fund, including a majority of the Directors who are not parties to such contract
or interested persons of such parties (as defined in the Investment Company Act)
on May 12, 1993 and was approved by shareholders on August 8, 1991.

Terms of the Management Agreement

Pursuant to the Management Agreement, PMF, subject to the supervision of
the Fund's Board of Directors and in conformity with the stated policies of the
Fund, is responsible for managing or providing for the management of the
investment of the Fund's assets. In this regard, PMF provides supervision of the
Fund's investments, furnishes a continuous investment program for the Fund's
portfolio and places purchase and sale orders for portfolio securities of the
Fund and other investments. The Prudential Investment Corporation (PIC), a
wholly-owned subsidiary of The Prudential Insurance Company of America
(Prudential), provides such services pursuant to a subadvisory agreement (the
Subadvisory Agreement) with PMF. PMF also administers the Fund's corporate
affairs, subject to the supervision of the Fund's Board of Directors, and, in
connection therewith, furnishes the Fund with office facilities, together with
those ordinary clerical and bookkeeping services which are not being furnished
by the Fund's Transfer and Dividend Disbursing Agent and Custodian.

PMF has authorized any of its directors, officers and employees who have
been elected as Directors or officers of the Fund to serve in the capacities in
which they have been elected. All services furnished by PMF under the Management
Agreement may be furnished by any such directors, officers or employees of PMF.
In connection with its administration of the corporate affairs of the Fund, PMF
bears the following expenses:

(a) the salaries and expenses of all personnel of the Fund and PMF,
except the fees and expenses of Directors not affiliated with PMF or the
Fund's investment adviser;

(b) all expenses incurred by PMF or by the Fund in connection with
administering the ordinary course of the Fund's business, other than those
assumed by the Fund, as described below; and

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The Fund pays PMF for the services performed and the facilities furnished
by it a fee at an annual rate of .75 of 1% of the Fund's daily net assets. This
fee is computed daily and paid monthly. For the fiscal year ended December 31,
1993, PMF received a management fee of $2,934,112.

The Management Agreement provides that, if the expenses of the Fund
(including the fees of PMF, but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business) for any fiscal year exceed the lowest applicable annual expense
limitation established and enforced pursuant to the statutes or regulations of
any jurisdiction in which shares of the Fund are then qualified for offer and
sale, the compensation due PMF will be reduced by the amount of such excess, or,
if such reduction exceeds the compensation payable to PMF, PMF will pay the Fund
the amount of such reduction which exceeds the amount of such compensation. Any
such reductions or payments are subject to readjustment during the year. No such
reductions or payments were required during the fiscal year ended December 31,
1993. The Fund believes the most restrictive of such annual limitations is
2 1/2% of the Fund's average daily net assets up to $30 million, 2% of the next
$70 million of such assets and 1 1/2% of such assets in excess of $100 million.

Except as indicated above, the Fund is responsible under the Management
Agreement for the payment of its expenses, including (a) the fees payable to
PMF, (b) the fees and expenses of Directors who are not affiliated with PMF or
the investment adviser, (c) the fees and certain expenses of the Fund's
Custodian and Transfer and Dividend Disbursing Agent, including the cost of
providing records of the Fund and of pricing Fund shares, (d) the charges and
expenses of the Fund's legal counsel and independent accountants, (e) brokerage
commissions and any issue or transfer taxes chargeable to the Fund in connection
with its securities transactions, (f) all taxes and corporate fees payable by
the Fund to governmental agencies, (g) the fees of any trade association of
which the Fund may be a member, (h) the cost of any share certificates
representing shares of the Fund, (i) the cost of fidelity and liability
insurance, (j) the fees and expenses involved in registering and maintaining
registration of the Fund and of its shares with the SEC and registering the Fund
and qualifying its shares under state securities laws, including the
preparation and printing of the Fund's registration statements and prospectuses
for such purposes, (k) allocable communications expenses with respect to
investor services and all expenses of shareholders' and Board of Directors'
meetings and of preparing, printing and mailing prospectuses and reports to
shareholders, (l) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business and (m) distribution fees.

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The Management Agreement provides that PMF will not be liable to the Fund
for any error of judgment by PMF or for any loss suffered by the Fund in
connection with the matters to which the Management Agreement relates except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or willful misfeasance, bad faith, gross negligence or
reckless disregard of duty. The Management Agreement also provides that it will
terminate automatically if assigned and that it may be terminated without
penalty by the Board of Directors of the Fund, by vote of a majority of the
Fund's outstanding voting securities (as defined in the Investment Company Act)
or by the Manager, upon not more than 60 days' nor less than 30 days' written
notice.

Information about PMF

PMF, a subsidiary of Prudential Securities and an indirect, wholly-owned
subsidiary of Prudential, was organized in May 1987 under the laws of the State
of Delaware. Prudential's address is Prudential Plaza, Newark, New Jersey 07102.
PMF acts as manager for the following investment companies:

Open-End Management Investment Companies: Command Government Fund,
Command Money Fund, Command Tax-Free Fund, Prudential Adjustable Rate
Securities Fund, Inc., Prudential California Municipal Fund, Prudential
Equity Fund, Inc., Prudential Equity Income Fund, Prudential FlexiFund,
Prudential Global Fund, Inc., Prudential-Bache Global Genesis Fund, Inc.
(d/b/a Prudential Global Genesis Fund), Prudential-Bache Global Natural
Resources Fund, Inc. (d/b/a Prudential Global Natural Resources Fund),
Prudential-Bache GNMA Fund, Inc. (d/b/a Prudential GNMA Fund),
Prudential-Bache Government Plus Fund, Inc. (d/b/a Prudential Government
Plus Fund), Prudential Government Securities Trust, Prudential Growth Fund,
Inc., Prudential-Bache Growth Opportunity Fund, Inc. (d/b/a Prudential
Growth Opportunity Fund), Prudential-Bache High Yield Fund, Inc. (d/b/a
Prudential High Yield Fund), Prudential IncomeVertible(R) Fund, Inc.,
Prudential-Bache MoneyMart Assets Fund, Inc. (d/b/a Prudential MoneyMart
Assets), Prudential Multi-Sector Fund, Inc., Prudential Municipal Bond
Fund, Prudential Municipal Series Fund, Prudential-Bache National
Municipals Fund, Inc. (d/b/a Prudential National Municipals Fund),
Prudential Pacific Growth Fund, Inc., Prudential Short-Term Global Income
Fund, Inc., Prudential-Bache Special Money Market Fund, Inc. (d/b/a
Prudential Special Money Market Fund), Prudential-Bache Structured Maturity
Fund, Inc. (d/b/a Prudential Structured Maturity Fund), Prudential-Bache
Tax-Free Money Fund, Inc. (d/b/a Prudential Tax-Free Money Fund),
Prudential U.S. Government Fund, Prudential-Bache Utility Fund, Inc. (d/b/a
Prudential Utility Fund), Prudential Institutional Portfolio, Inc.,
Prudential Intermediate Global Income Fund, Inc., Global Utility Fund,
Inc., Nicholas-Applegate Fund, Inc., and The BlackRock Government Income
Trust.

Closed-End Management Investment Companies: The Global Government Plus
Fund, Inc., The Global Yield Fund, Inc., and The High Yield Income Fund,
Inc.

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The consolidated statement of financial condition of PMF and subsidiaries
as of December 31, 1993 is set forth as Exhibit A to this Proxy Statement.

Certain information regarding the directors and principal executive
officers of PMF is set forth below. Except as otherwise indicated, the address
of each person is One Seaport Plaza, New York, New York 10292.

Name and Address Position with PMF Principal Occupations
- - ---------------- ----------------- ---------------------

Brendan D. Boyle ........... Executive Vice Executive Vice President,
President and and Director of
Director of Marketing, PMF
Marketing

John D. Brookmeyer, Jr. .... Director Senior Vice President,
Two Gateway Center Prudential; Senior
Newark, NJ 07102 Vice President, PIC

Susan C. Cote .............. Senior Vice Senior Vice President,
President PMF; Senior Vice
President, Prudential
Securities

Fred A. Fiandaca ........... Executive Vice Executive Vice President,
Raritan Plaza One President, Chief Chief Operating
Edison, NJ 08847 Operating Officer Officer and Director,
and Director PMF; Chairman, Chief
Operating Officer and
Director, Prudential
Mutual Fund Services,
Inc.

Stephen P. Fisher .......... Senior Vice Senior Vice President,
President PMF; Senior Vice
President, Prudential
Securities

Frank W. Giordano .......... Executive Vice Executive Vice President,
President, General General Counsel and
Counsel and Secretary, PMF; Senior
Secretary Vice President,
Prudential Securities

Robert F. Gunia ............ Executive Vice Executive Vice President,
President, Chief Chief Financial and
Financial and Administrative
Administrative Officer, Treasurer
Officer, Treasurer and Director, PMF;
and Director Senior Vice President,
Prudential Securities

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Name and Address Position with PMF Principal Occupations
- - ---------------- ----------------- ---------------------

Eugene B. Heimberg ......... Director Senior Vice President,
Prudential Plaza Prudential; President,
Newark, NJ 07102 Director and Chief
Investment Office, PIC

Lawrence C. McQuade ........ Vice Chairman Vice Chairman, PMF

Leland B. Paton ............ Director Executive Vice President
and Director,
Prudential Securities;
Director, PSG

Richard A. Redeker ......... President, Chief President, Chief
Executive Officer Executive Officer and
and Director Director, PMF;
Executive Vice
President, Director
and Member of the
Operating Committee,
Prudential Securities;
Director, PSG

S. Jane Rose ............... Senior Vice Senior Vice President,
President, Senior Senior Counsel and
Counsel and Assistant Secretary,
Assistant Secretary PMF; Senior Vice
President and Senior
Counsel, Prudential
Securities

Donald G. Southwell ........ Director Senior Vice President,
213 Washington Street Prudential; Director,
Newark, NJ 07102 PSG

The Subadviser

Investment advisory services are provided to the Fund by PMF through its
affiliate, The Prudential Investment Corporation (PIC or the Subadviser),
Prudential Plaza, Newark, New Jersey 07102, under a Subadvisory Agreement. The
Subadvisory Agreement was approved by shareholders on August 8, 1991 and was
last approved by the Board of Directors of the Fund, including a majority of the
Directors who are not parties to such contract or interested persons of such
parties (as defined in the Investment Company Act), on May 12, 1993.

Terms of the Subadvisory Agreement

Pursuant to the Subadvisory Agreement, PIC, subject to the supervision of
PMF and the Board of Directors and in conformity with the stated policies of the
Fund, manages the investment operations of the Fund and the composition of the
Fund's portfolio, including the purchase, retention and disposition of
securities and other

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investments. PIC is reimbursed by PMF for reasonable costs
and expenses incurred by it in furnishing such services. The fees paid by the
Fund to PMF under the Management Agreement with PMF are not affected by this
arrangement. PIC keeps certain books and records required to be maintained
pursuant to the Investment Company Act. The investment advisory services of PIC
to the Fund are not exclusive under the terms of the Subadvisory Agreement and
PIC is free to, and does, render investment advisory services to others.

PIC has authorized 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 have been elected. Services furnished by PIC under the Subadvisory
Agreement may be furnished by any such directors, officers or employees of PIC.
The Subadvisory Agreement provides that PIC shall not be liable for any error of
judgment or for any loss suffered by the Fund or PMF in connection with the
matters to which the Subadvisory Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on PIC's part in the
performance of its duties or from its reckless disregard of duty. The
Subadvisory Agreement provides that it shall terminate automatically if assigned
or upon termination of the Management Agreement and that it may be terminated
without penalty by either party upon not more than 60 days' nor less than 30
days' written notice.

Information about PIC. PIC was organized in June 1984 under the laws of the
State of New Jersey. The business and other connections of PIC's directors and
executive officers are as set forth below. Except as otherwise indicated, the
address of each person is Prudential Plaza, Newark, New Jersey 07102.

Name and Address Position with PIC Principal Occupations
- - ---------------- ----------------- ---------------------

Martin A. Berkowitz ........ Senior Vice Senior Vice President,
President, Chief Chief Financial and
Financial Compliance Officer,
and Com- PIC; Vice President,
pliance Officer Prudential

William M. Bethke .......... Senior Vice Senior Vice President,
Two Gateway Center President Prudential; Senior
Newark, NJ 07102 Vice President, PIC

John D. Brookmeyer, Jr. .... Senior Vice Senior Vice President,
Two Gateway Center President Prudential; Senior
Newark, NJ 07102 Vice President, PIC

Eugene B. Heimberg ......... President, Senior Vice President,
Director and Chief Prudential; President,
Investment Officer Director and Chief
Investment Officer,
PIC

Garnett L. Keith, Jr. ...... Director Vice Chairman and
Director, Prudential;
Director, PIC

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<PAGE>

Name and Address Position with PIC Principal Occupations
- - ---------------- ----------------- ---------------------

Harry E. Knapp, Jr ......... Vice President Vice President,
Four Gateway Center Prudential; Vice
Newark, NJ 07102 President, PIC

William P. Link ............ Senior Vice Executive Vice
Four Gateway Center President President, Prudential;
Newark, NJ 07102 Senior Vice President,
PIC

Robert E. Riley ............ Executive Vice Executive Vice
800 Boylston Avenue President President, Prudential;
Boston, MA 02199 Executive Vice
President, PIC;
Director, PSG

James W. Stevens ........... Executive Vice Executive Vice
Four Gateway Center President President, Prudential;
Newark, NJ 07102 Executive Vice
President, PIC;
Director, PSG

Robert C. Winters .......... Director Chairman of the Board
and Chief Executive
Officer, Prudential;
Director, PIC;
Chairman of the Board,
PSG

Claude J. Zinngrabe, Jr. ... Executive Vice Vice President,
President Prudential; Executive
Vice President, PIC

The Distributors

Prudential Mutual Fund Distributors, Inc. (PMFD), One Seaport Plaza, New
York, New York 10292, acts as the distributor of the Class A shares of the Fund.
Prudential Securities, One Seaport Plaza, New York, New York 10292, acts as the
distributor of the Class B shares of the Fund.

Under separate Distribution and Service Plans (the Class A Plan and the
Class B Plan, collectively, the Plans) adopted by the Fund under Rule 12b-1
under the Investment Company Act and separate distribution agreements (the
Distribution Agreements), PMFD and Prudential Securities (collectively, the
Distributor) incur the expenses of distributing the Fund's Class A and Class B
shares, respectively.

The Plans were last approved by the Board of Directors, including a
majority of the Directors who are not interested persons of the Fund and who
have no direct or indirect financial interest in the operation of the Class A or
Class B Plan or in any agreement related to either Plan (the Rule 12b-1
Directors), on May 12, 1993. The Class A Plan was approved by the Class A
shareholders on August 8, 1991. The Class B Plan was approved by shareholders of
the Fund (the Class B shareholders) on December 3, 1992.

The Plans are proposed to be amended as set forth in Proposal Nos. 3 and 4
below.

Class A Plan. Under the Class A Plan, the Fund reimburses PMFD for its
distribution-related expenses with respect to Class A shares at an annual rate
of up to
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.30 of 1% of the average daily net assets of the Class A shares. The Class
A Plan provides that (i) up to .25 of 1% of the average daily net assets of
the Class A shares may be used for personal service and/or the maintenance of
shareholder accounts (service fee) and (ii) total distribution fees (including
the service fee of .25 of 1%) may not exceed .30 of 1% of the average daily net
assets of the Class A shares. PMFD has advised the Fund that
distribution-related expenses of the Fund will not exceed .15 of 1% of the
average daily net assets of the Class A shares for the fiscal year ending
December 31, 1994.

For the fiscal year ended December 31, 1993, PMFD received payments of
$532,527 under the Class A Plan representing .15 of 1% of the average daily net
assets of the Class A shares as reimbursement of expenses related to the
distribution of Class A shares. This amount was primarily expended on account
servicing fees to Prudential Securities and Pruco Securities Corporation, an
affiliated broker-dealer (Prusec), for payment to financial advisers and other
salespersons who sell Class A shares. For the fiscal year ended December 31,
1993, PMFD also received approximately $62,300 in initial sales charges with
respect to the Class A shares.

Class B Plan. Under the Class B Plan, the Fund reimburses Prudential
Securities for its distribution-related expenses with respect to Class B shares
at an annual rate of up to .75 of 1% of the average daily net assets of the
Class B shares. The Class B Plan also provides for the payment of a service fee
to Prudential Securities at a rate not to exceed .25 of 1% of the average daily
net assets of Class B shares. The aggregate distribution fee for Class B shares
(asset-based sales charge plus service fee) will not exceed .75 of 1% of average
daily net assets of the Class B shares.

For the fiscal year ended December 31, 1993, Prudential Securities received
$271,479 from the Fund under the Class B Plan and spent approximately $376,700
in distributing the Fund's Class B shares. It is estimated that of this latter
amount approximately 3.4% ($12,700) was spent on printing and mailing of
prospectuses to other than current shareholders during the fiscal year ended
December 31, 1993; 13.5% ($50,900) on compensation to Prusec, for commissions to
its financial advisers and other expenses, including an allocation of overhead
and other branch office distribution-related expenses, incurred by it for
distribution of Fund shares during the fiscal year ended December 31, 1993; 2.3%
($8,500) in interest and/or carrying charges during the fiscal year ended
December 31, 1993; 80.8% ($304,600) on the aggregate of (i) payments of
commissions to financial advisers (37.6% ($141,800)) and (ii) an allocation of
overhead and other branch office distribution-related expenses (43.2%
($162,800)) during the fiscal year ended December 31, 1993. The term "overhead
and other branch office distribution-related expenses" represents (a) the
expenses of operating Prudential Securities branch offices in connection with
the sale of Fund shares, including lease costs, the salaries and employee
benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies, (b) the costs of
client sales seminars, (c) expenses of mutual fund sales coordinators to promote
the sale of Fund shares and (d) other incidental expenses relating to branch
promotion of Fund sales.

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<PAGE>
<PAGE>

Prudential Securities also receives the proceeds of contingent deferred
sales charges paid by holders of Class B shares upon certain redemptions of
Class B shares. Under the current Class B Plan, the amount of distribution
expenses reimbursable by Class B shares of the Fund is reduced by the amount of
such contingent deferred sales charges. For the fiscal year ended December 31,
1993, Prudential Securities received approximately $101,000 in contingent
deferred sales charges. As of December 31, 1993 the aggregate amount of
unreimbursed distribution expenses for the Fund's Class B shares were
approximately $276,800.

The Class A and Class B Plans continue in effect from year to year provided
that each such continuance is approved at least annually by a vote of the Board
of Directors, including a majority vote of the Rule 12b-1 Directors, cast in
person at a meeting called for the purpose of voting on such continuance. The
Class A and Class B Plans may each be terminated at any time, without penalty,
by the vote of a majority of the Rule 12b-1 Directors or by the vote of the
holders of a majority of the outstanding shares of the applicable class on not
more than 30 days' written notice to any other party to the Plans. Neither Plan
may be amended to increase materially the amounts to be spent for the services
described therein without approval by the shareholders of the applicable class,
and all material amendments are required to be approved by the Board of
Directors in the manner described above. Each Plan will automatically terminate
in the event of its assignment. The Fund will not be contractually obligated to
pay expenses incurred under either the Class A Plan or the Class B Plan if it is
terminated or not continued. In the event of termination or noncontinuation of
the Class B Plan, the Board of Directors may consider the appropriateness of
having the Fund reimburse Prudential Securities for the outstanding carry
forward amounts plus interest thereon.

Pursuant to each Plan, the Board of Directors reviews at least quarterly a
written report of the distribution expenses incurred on behalf of the Class A
and Class B shares of the Fund by PMFD and Prudential Securities, respectively.
The report includes an itemization of the distribution expenses and the purposes
of such expenditures. In addition, as long as the Plans remain in effect, the
selection and nomination of Rule 12b-1 Directors shall be committed to the Rule
12b-1 Directors.

Pursuant to each Distribution Agreement, the Fund has agreed to indemnify
PMFD and Prudential Securities to the extent permitted by applicable law against
certain liabilities under the Securities Act. Each Distribution Agreement was
last approved by the Board of Directors, including a majority of the Rule 12b-1
Directors, on May 12, 1993.

Portfolio Transactions

The Manager is responsible for decisions to buy and sell securities,
futures and options on such securities and futures for the Fund, the selection
of brokers and dealers and futures commission merchants to effect the
transactions and the negotiation of brokerage commissions, if any. For purposes
of this section, the term "Manager" includes the "Subadviser." On a national
securities exchange, broker/dealers may receive negotiated brokerage
commissions on Fund portfolio transactions, including

16
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<PAGE>

options, futures and options on futures transactions and the purchase and sale
of underlying securities upon the exercise of options. On a foreign securities
exchange, commissions may be fixed. Orders may be directed to any broker
including, to the extent and in the manner permitted by applicable law,
Prudential Securities and its affiliates.

In the over-the-counter market, securities are generally traded on a
"net" basis with dealers acting as principal for their own accounts without a
stated commission, although the price of the security usually includes a profit
to the dealer. In underwritten offerings, securities are purchased at a fixed
price which includes an amount of compensation to the underwriter, generally
referred to as the underwriter's concession or discount. On occasion, certain
money market instruments and agency securities may be purchased directly from an
issuer, in which case no commissions or discounts are paid. The Fund will not
deal with Prudential Securities (or any affiliate) in any transaction in which
Prudential Securities (or any affiliate) acts as principal. Thus, it will not
deal in the over-the-counter market with Prudential Securities (or any
affiliate) acting as market maker, and it will not execute a negotiated trade
with Prudential Securities (or any affiliate) if execution involves Prudential
Securities (or any affiliate) acting as principal with respect to any part of
the Fund's order.

In placing orders for portfolio securities of the Fund, the Manager is
required to give primary consideration to obtaining the most favorable price and
efficient execution. This means that the Manager will seek to execute each
transaction at a price and commission, if any, which provide the most favorable
total cost or proceeds reasonably attainable in the circumstances. While the
Manager generally seeks reasonably competitive spreads or commissions, the Fund
will not necessarily be paying the lowest spread or commission available. Within
the framework of this policy, the Manager will consider the research and
investment services provided by brokers, dealers or futures commission merchants
who effect or are parties to portfolio transactions of the Fund, the Manager or
the Manager's other clients. Such research and investment services are those
which brokerage houses customarily provide to institutional investors and
include statistical and economic data and research reports on particular
companies and industries. Such services are used by the Manager in connection
with all of its investment activities, and some of such services obtained in
connection with the execution of transactions for the Fund may be used in
managing other investment accounts. Conversely, brokers, dealers or futures
commissions merchants furnishing such services may be selected for the execution
of transactions of such other accounts, whose aggregate assets are far larger
than the Fund, and the services furnished by such brokers, dealers or futures
commission merchants may be used by the Manager in providing investment
management for the Fund. Commission rates are established pursuant to
negotiations with the broker, dealer or futures commission merchant based on the
quality and quantity of execution services provided by the broker, dealer or
futures commission merchant in the light of generally prevailing rates. The
Manager's policy is to pay higher commissions to brokers and futures commission
merchants, other than Prudential Securities (or any affiliate), for

17
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<PAGE>

particular transactions than might be charged if a different broker had been
selected, on occasions when, in the Manager's opinion, this policy furthers
the objective of obtaining best price and execution. In addition, the Manager
is authorized to pay higher commissions on brokerage transactions for the
Fund to brokers and futures commission merchants other than Prudential
Securities (or any affiliate) in order to secure research and investment
services described above, subject to review by the Fund's Board of Directors
from time to time as to the extent and continuation of this practice. The
allocation of orders among brokers and the commission rates paid are reviewed
periodically by the Fund's Board of Directors. Portfolio securities may not be
purchased from any underwriting or selling syndicate of which Prudential
Securities (or any affiliate), during the existence of the syndicate, is a
principal underwriter (as defined in the Investment Company Act), except in
accordance with rules of the SEC. This limitation, in the opinion of the Fund,
will not significantly affect the Fund's ability to pursue its present
investment objective. However, in the future in other circumstances, the Fund
may be at a disadvantage because of this limitation in comparison to other
funds with similar objectives but not subject to such limitations.

Subject to the above considerations, Prudential Securities (or any
affiliate) may act as a broker or futures commission merchant for the Fund. In
order for Prudential Securities (or any affiliate) to effect any portfolio
transactions for the Fund, the commissions, fees or other remuneration received
by Prudential Securities (or such affiliate) must be reasonable and fair
compared to the commissions, fees or other remuneration paid to other brokers or
futures commission merchant in connection with comparable transactions involving
similar securities or futures contracts being purchased or sold on an exchange
or board of trade during a comparable period of time. This standard would allow
Prudential Securities (or any affiliate) to receive no more than the
remuneration which would be expected to be received by an unaffiliated broker or
futures commission merchant in a commensurate arm's-length transaction.
Furthermore, the Board of Directors of the Fund, including a majority of the
Directors who are not "interested" Directors, has adopted procedures which are
reasonably designed to provide that any commissions, fees or other remuneration
paid to Prudential Securities (or any affiliate) are consistent with the
foregoing standard. In accordance with Section 11(a) of the Securities Exchange
Act of 1934, Prudential Securities (or any affiliate) may not retain
compensation for effecting transactions on a national securities exchange for
the Fund unless the Fund has expressly authorized the retention of such
compensation. Prudential Securities must furnish to the Fund at least annually a
statement setting forth the total amount of all compensation retained by
Prudential Securities (or any affiliate) from transactions effected for the Fund
during the applicable period. Brokerage transactions with Prudential Securities
(or any affiliate) are also subject to such fiduciary standards as may be
imposed upon Prudential Securities (or such affiliate) by applicable law.

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The Fund paid no brokerage commissions to Prudential Securities for the
fiscal year ended December 31, 1993.

APPROVAL OF A PROPOSAL TO AMEND THE FUND'S
ARTICLES OF INCORPORATION TO PERMIT
THE IMPLEMENTATION OF A CONVERSION FEATURE
(For consideration by Class A and Class B shareholders voting jointly)

(Proposal No. 2)

The Board of Directors is recommending that shareholders approve an
amend-ment to the Fund's Articles of Incorporation to permit the implementation
of a conversion feature for Class B shares. The conversion feature is authorized
pursuant to an exemptive order of the SEC (the SEC Order) and would provide for
the automatic conversion of Class B shares to Class A shares at relative net
asset value approximately five years after purchase. Class A shares are subject
to a lower annual distribution and service fee than Class B shares and
conversions would occur without the imposition of any additional sales charge. A
description of the conversion feature is set forth in greater detail below.
Amendment of the Articles of Incorporation requires approval by a majority of
the Fund's outstanding shares.

The Classes of Shares

The Fund currently offers two classes of shares, designated as Class A and
Class B shares pursuant to the Alternative Purchase Plan, in reliance upon
the SEC Order. Class A shares are currently offered with an initial sales charge
of up to 3.0% of the offering price and are subject to an annual distribution
and service fee of up to .30 of 1% of the average daily net assets of the Class
A shares pursuant to a Rule 12b-1 plan. This fee is currently charged at a rate
of .15 of 1% of the average daily net assets of the Class A shares and PMFD has
agreed to so limit its fee under the Class A Plan for the fiscal year ending
December 31, 1994. Class B shares are currently offered without an initial
sales charge but are subject to a contingent deferred sales charge or
CDSC (declining from 3% to zero of the lesser of the amount invested or the
redemption proceeds) on certain redemptions generally made within four years of
purchase and to an annual distribution and service fee pursuant to a Rule 12b-1
plan of up to .75 of 1% of the average daily net assets of the Class B shares.

In accordance with the SEC Order, the Board of Directors may, among other
things, authorize the creation of additional classes of shares from time to
time. The Board of Directors has approved the offering of a new class of shares,
to be designated Class C shares, which will be offered simultaneously with the
offering of Class B shares with the proposed conversion feature. It is
anticipated that Class C shares will be offered without an initial sales charge
but will be subject to an annual distribution and service fee not to exceed 1%
of the average daily net assets of the Class C shares and, subject to approval
by the Board of Directors, a 1% CDSC on certain redemptions made within one
year of purchase. If the proposed conversion feature for Class B shares is not
approved, Class C shares will not be offered.

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The Proposed Conversion Feature

On May 12, 1993, the Fund's Board of Directors, including a majority of the
Directors who are not "interested persons" of the Fund (as defined in the
Investment Company Act), approved an amendment to the Fund's Articles of
Incorporation to permit the implementation of a conversion feature for the
Fund's Class B shares. A copy of the proposed amendment to the Fund's Articles
of Incorporation is attached hereto as Exhibit B.

If this proposal is approved, it is currently contemplated that conversions
of Class B shares to Class A shares will occur on a quarterly basis
approximately five years from the purchase of Class B shares. The first
conversion is currently anticipated to occur in or about January 1995.
Conversions will be effected automatically at relative net asset value without
the imposition of any additional sales charge. Class B shareholders will benefit
from the conversion feature because they will thereafter be subject to the lower
annual distribution and service fee applicable to Class A shares.

Since the Fund tracks amounts paid rather than the number of shares bought
on each purchase of Class B shares, it is currently anticipated that the number
of Class B shares eligible to convert to Class A shares (excluding shares
acquired through the automatic reinvestment of dividends and other
distributions) (the Eligible Shares) will be determined on each conversion date
in accordance with the following formula:(i) the ratio of (a) the amounts paid
for Class B shares purchased at least five years prior to the conversion date to
(b) the total amount paid for all Class B shares purchased and then held in a
shareholder's account (ii) multiplied by the total number of Class B shares held
in such shareholder's account. Each time any Eligible Shares in a shareholder's
account convert to Class A shares, all shares or amounts representing Class B
shares then in such account that were acquired through the automatic
reinvestment of dividends and other distributions will convert to Class A
shares.

For purposes of determining the number of Eligible Shares, if the Class B
shares in a shareholder's account on any conversion date are the result of
multiple purchases at different net asset values per share, the number of
Eligible Shares calculated as described above will generally be either more or
less than the number of shares actually purchased approximately five years
before such conversion date. For example, if 100 shares were initially purchased
at $10 per share (for a total of $1,000) and a second purchase of 100 shares was
subsequently made at $11 per share (for a total of $1,100), 95.24 shares would
convert approximately five years from the initial purchase (i.e., $1,000 divided
by $2,100 (47.62%) multiplied by 200 shares equals 95.24 shares). The Manager
reserves the right to modify the formula for determining the number of Eligible
Shares in the future as it deems appropriate on notice to shareholders.

If the net asset value per share of Class A is higher than that of Class B
at the time of conversion (which may be the case because of the higher
distribution and service fee applicable to Class B shares), shareholders will
receive fewer Class A shares than Class B shares converted although the
aggregate dollar value will be the same.

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For purposes of calculating the applicable holding period for conversions,
all payments for purchases of Class B shares during a month will be deemed to
have been made on the last day of the month, or for Class B shares acquired
through exchange, or a series of exchanges, on the last day of the month in
which the original payment for purchases of Class B shares was made. For Class B
shares previously exchanged for shares of a money market fund, the time period
during which such shares were held in the money market fund will be excluded.
For example, Class B shares held in a money market fund for a period of one year
will not convert to Class A shares until approximately six years from purchase.
In measuring the time period during which shares are held in a money
market fund, exchanges will be deemed to have been made on the last day of the
month. Class B shares acquired through exchange will convert to Class A shares
after expiration of the conversion period applicable to the original purchase of
such shares. As of the date of the first conversion (which, as noted above, is
currently anticipated to occur in or about January 1995) all amounts
representing Class B shares then outstanding beyond the expiration of the
applicable conversion period will automatically convert to Class A shares,
together with all shares or amounts representing Class B shares acquired through
the automatic reinvestment of dividends and distributions then held in the
shareholder's account.

The Fund has obtained an opinion of counsel to the effect that the
conversion of Class B shares into Class A shares does not constitute a taxable
event for U.S. income tax purposes. However, such opinion is not binding on
the Internal Revenue Service.

If approved by shareholders, the conversion feature may be subject to the
continuing availability of opinions of counsel or rulings of the Internal
Revenue Service (i) that the dividends and other distributions paid on Class A
and Class B shares will not constitute "preferential dividends" under the
Internal Revenue Code of 1986, as amended, and (ii) that the conversion of
shares does not constitute a taxable event. The conversion of Class B shares
into Class A shares may be suspended if such opinions or rulings are no
longer available. If conversions are suspended, Class B shares of the Fund
will continue to be subject, possibly indefinitely, to their higher annual
distribution and service fee.

Required Vote

The proposed amendment to the Fund's Articles of Incorporation to implement
the conversion feature requires the affirmative vote of a majority of the Fund's
outstanding shares. In the event shareholders of the Fund do not approve the
proposed amendment, the conversion feature will not be implemented for the Fund
and Class B shares of the Fund will continue to be subject, possibly
indefinitely, to their higher annual distribution and service fee.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL NO. 2.

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APPROVAL OF AMENDED AND RESTATED
CLASS A DISTRIBUTION AND SERVICE PLAN
(For consideration by Class A and Class B shareholders voting separately)

(Proposal No. 3)

On May 12, 1993, the Fund's Board of Directors approved an amended and
restated Class A Distribution and Service Plan pursuant to Rule 12b-1 under the
Investment Company Act and an amended and restated Distribution Agreement with
PMFD for Class A shares of the Fund (the Proposed Class A Plan and the Proposed
Class A Distribution Agreement, respectively) and recommends submission of the
Proposed Class A Plan to the Fund's Class A shareholders for approval or
disapproval at this Special Meeting of Shareholders. As contemplated by the SEC
Order (previously defined under Proposal No. 2), the Proposed Class A Plan is
also being submitted for approval by Class B shareholders because, subject to
approval of Proposal No. 2, Class B shares will automatically convert to Class A
shares approximately five years after purchase. The Proposed Class A
Distribution Agreement does not require and is not being submitted for
shareholder approval.

The purpose of the Proposed Class A Plan is to compensate PMFD, the
distributor of the Fund's Class A shares, for providing distribution assistance
to broker/dealers, including Prudential Securities and Prusec, affiliated
broker/dealers, and other qualified broker/dealers, if any, whose customers
invest in Class A shares of the Fund and to defray the costs and expenses,
including the payment of account servicing fees, of the services provided
and activities undertaken to distribute Class A shares (Distribution
Activities).

The Board of Directors previously adopted a plan of distribution for the
Fund's Class A shares pursuant to Rule 12b-1 under the Investment Company Act
which was approved by shareholders on August 8, 1991 and last approved by the
Board of Directors on May 12, 1993 (the Existing Class A Plan). Shareholders of
the Fund's Class A and Class B shares are being asked to approve amendments to
the Existing Class A Plan that change it from a reimbursement type plan to a
compensation type plan. The amendments do not change the maximum annual fee that
may be paid to PMFD under the Existing Class A Plan, although the possibility
exists that expenses incurred by PMFD and for which it is entitled to be
reimbursed under the Existing Class A Plan may be less than the fee PMFD will
receive under the Proposed Class A Plan. The amendments are being proposed to
facilitate administration and accounting. The Board of Directors believes that
the Proposed Class A Plan is in the best interest of the Fund and is reasonably
likely to benefit the Fund's Class A shareholders. A copy of the Proposed Class
A Plan is attached hereto as Exhibit C.

The Existing Class A Plan

Under the Existing Class A Plan, the Fund reimburses PMFD for expenses
incurred for Distribution Activities at an annual rate of up to .30 of 1% of the
average

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daily net assets of the Class A shares (up to .25 of 1% of which may
constitute a service fee for the servicing and maintenance of shareholder
accounts). Article III, Section 26 of the NASD Rules of Fair Practice (the NASD
Rules) places an annual limit of .25 of 1% on fees that may be imposed for the
provision of personal service and/or the maintenance of shareholder accounts
(service fees) and an annual limit of .75 of 1% on asset-based sales charges (as
defined in the NASD Rules). Subject to these limits, the Fund may impose any
combination of service fees and asset-based sales charges under both the
Existing Class A Plan and the Proposed Class A Plan; provided that the total
fees do not exceed .30 of 1% per annum of the average daily net assets of the
Class A shares.

The Existing Class A Plan may not be amended to increase materially the
amount to be spent for the services described therein without approval by a
majority of the holders of the Class A shares of the Fund. In addition, all
material amendments thereof must be approved by vote of a majority of the
Directors including a majority of the Rule 12b-1 Directors, cast in person at a
meeting called for the purpose of voting on the Plan. So long as the Existing
Class A Plan is in effect, the selection and nomination of Rule 12b-1 Directors
will be committed to the discretion of the Rule 12b-1 Directors.

The Existing Class A Plan may be terminated at any time without payment of
any penalty by the vote of a majority of the Rule 12b-1 Directors or by the vote
of a majority of the outstanding Class A shares of the Fund (as defined in the
Investment Company Act) on written notice to any other party to such plan and
will automatically terminate in the event of its assignment (as defined in the
Investment Company Act). For a more detailed description of the Existing Class A
Plan, see "Management of the Fund -- The Distributors -- Class A Plan."

The Proposed Class A Plan

The Proposed Class A Plan amends the Existing Class A Plan in one material
respect. Under the Existing Class A Plan, the Fund reimburses PMFD for expenses
actually incurred for Distribution Activities up to a maximum of .30 of 1% per
annum of the average daily net assets of the Class A shares. The Proposed Class
A Plan authorizes the Fund to pay PMFD the same maximum annual fee as
compensation for its Distribution Activities regardless of the expenses incurred
by PMFD for Distribution Activities. The Distributor may, however, as it
currently does, voluntarily agree to limit its fee to an amount less than the
maximum annual fee. In contrast to the Existing Class A Plan, the amounts
payable by the Fund under the Proposed Class A Plan would not be directly
related to the expenses actually incurred by PMFD for its Distribution
Activities. Consequently, if PMFD's expenses for Distribution Activities are
less than the distribution and service fees it receives under the Proposed Class
A Plan, it will retain its full fees and realize a profit.

Since inception of the Existing Class A Plan, the reimbursable expenses
incurred thereunder by PMFD have generally equalled or exceeded the amount
reimbursed by the Fund. For the fiscal year ended February 28, 1992, for the ten
month period ended

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December 31, 1992 and for the fiscal year ended December 31,
1993, PMFD received payments of $213,222, $416,670 and $532,527, respectively,
under the Existing Class A Plan representing .15%, of the average daily net
assets of the Class A shares as reimbursement of expenses incurred for
Distribution Activities. Although PMFD agreed to limit its fees under the
Existing Class A Plan to .25 of 1% for the fiscal year ended, February 28, 1992,
for the ten month period ended December 31, 1992 and for the fiscal year ended
December 31, 1993, it in fact further limited its fee to .15 of 1% even though
its direct and indirect reimbursable distribution expenses exceeded such
amount. PMFD believes that it would have similarly limited its fee had the
Proposed Class A Plan been in effect during the above periods, although it
could have assessed the maximum annual fee of .30 of 1%. Regardless of
which plan will be in effect, the Distributor has voluntarily agreed to
limit its fees for Distribution Activities to no more than .15 of 1% of the
average daily net assets of the Class A shares for the fiscal year ending
December 31, 1994. Other expenses incurred by PMFD for Distribution Activities
have been, and will continue to be, paid from the proceeds of initial sales
charges.

Among the major perceived benefits of a compensation type plan, such as the
Proposed Class A Plan, over a reimbursement type plan, such as the Existing
Class A Plan, is the facilitation of administration and accounting. Under
reimbursement plans, all expenses must be specifically accounted for by the
Distributor and attributed to the specific class of shares of a fund in order to
qualify for reimbursement. Although the Proposed Class A Plan will continue to
require quarterly reporting to the Board of Directors of the amounts accrued and
paid under the Plan and of the expenses actually borne by the Distributor, there
will be no need to match specific expenses to reimbursements as under the
Existing Class A Plan. Thus, the accounting for the Proposed Class A Plan would
be simplified and the timing of when expenditures are to be made by the
Distributor would not be an issue. These considerations combined with the
reasonable likelihood, although there is no assurance, that the per annum
payment rate under the Proposed Class A Plan will not exceed the expenses
incurred by PMFD for Distribution Activities, suggest that the costs and efforts
associated with a reimbursement plan are unwarranted.

In considering whether to approve the Proposed Class A Plan, the Directors
reviewed, among other things, the nature and scope of the services to be
provided by PMFD, the purchase options available to investors under the
Alternative Purchase Plan, the amount of expenditures under the Existing Class A
Plan, the relationship of such expenditures to the overall cost structure of the
Fund, and comparative data with respect to distribution arrangements adopted by
other investment companies. Based upon such review, the Directors, including a
majority of the Rule 12b-1 Directors, determined that there is a reasonable
likelihood that the Proposed Class A Plan will benefit the Fund and its Class A
shareholders.

If approved by shareholders, the Proposed Class A Plan will continue in
effect from year to year, provided such continuance is approved at least
annually by vote of a majority of the Board of Directors, including a majority
of the Rule 12b-1 Directors.

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Required Vote

If Proposal No. 2 is approved by shareholders, the Proposed Class A Plan
will require the approval of a majority of the Fund's outstanding Class A shares
and Class B shares (as defined in the Investment Company Act) voting separately.
If Proposal No. 2 is not approved by shareholders, the Proposed Class A Plan
will only require the approval of a majority of the Fund's outstanding Class A
shares. Under the Investment Company Act, a majority of a class' outstanding
shares is defined as the lesser of (i) 67% of a class' outstanding shares
represented at a meeting at which more than 50% of the outstanding shares of the
class are present in person or represented by proxy, or (ii) more than 50% of a
class' outstanding shares. If the Proposed Class A Plan is not approved as
described above, the Existing Class A Plan will continue in its present form.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL NO. 3.

APPROVAL OF AMENDED AND RESTATED CLASS B
DISTRIBUTION AND SERVICE PLAN
(For consideration by Class B shareholders only)

(Proposal No. 4)

On May 12, 1993, the Fund's Board of Directors approved an amended and
restated Class B Distribution and Service Plan pursuant to Rule 12b-1 under the
Investment Company Act and an amended and restated Class B Distribution
Agreement with Prudential Securities for Class B shares of the Fund (the
Proposed Class B Plan and the Proposed Class B Distribution Agreement,
respectively) and recommends submission of the Proposed Class B Plan to the
Fund's Class B shareholders for approval or disapproval at this Special Meeting
of Shareholders. The Proposed Class B Distribution Agreement does not require
and is not being submitted for shareholder approval.

The purpose of the Proposed Class B Plan is to compensate Prudential
Securities, the distributor of the Fund's Class B shares, for providing
distribution assistance to broker/dealers, including Prusec, an affiliated
broker/dealer, and other qualified broker/dealers, if any, whose customers
invest in Class B shares of the Fund and to defray the costs and expenses,
including the payment of account servicing fees, of the services provided and
activities undertaken to distribute Class B shares (Distribution Activities).

The Board of Directors previously adopted a plan of distribution for the
Fund's Class B shares pursuant to Rule 12b-1 under the Investment Company Act
which was approved by shareholders on December 3, 1992 and last approved by the
Board of Directors on May 12, 1993 (the Existing Class B Plan). Shareholders of
the Fund's Class B shares are being asked to approve amendments to the Existing
Class B Plan

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<PAGE>

that change it from a reimbursement type plan to a compensation
type plan. The amendments do not change the maximum annual fee that may be paid
to Prudential Securities under the Existing Class B Plan, although the
possibility exists that expenses incurred by Prudential Securities and for which
it is entitled to be reimbursed under the Existing Class B Plan may be less than
the fee Prudential Securities will receive under the Proposed Class B Plan. The
amendments are being proposed to facilitate administration and accounting.
The Board of Directors believes that the Proposed Class B Plan is in the best
interest of the Fund and is reasonably likely to benefit the Fund's Class B
shareholders. A copy of the Proposed Class B Plan is attached hereto as
Exhibit D.

The Existing Class B Plan

Under the Existing Class B Plan, the Fund reimburses Prudential Securities
for expenses incurred for Distribution Activities at an annual rate of up to .75
of 1% of the average daily net assets of the Class B shares (up to .25 of 1% of
which may constitute a service fee for the servicing and maintenance of
shareholder accounts). Amounts reimbursable under the plan that are not paid
because they exceed the maximum fee payable thereunder are carried forward and
may be recovered in future years by Prudential Securities from asset-based sales
charges imposed on Class B shares, to the extent such charges do not exceed .75
of 1% per annum of the average daily net assets of the Class B shares, and from
contingent deferred sales charges received from certain redeeming shareholders,
subject to the limitations of Article III, Section 26 of the NASD Rules of Fair
Practice (the NASD Rules). The NASD Rules place an annual limit of .25 of 1% on
fees that may be imposed for the provision of personal service and/or the
maintenance of shareholder accounts (service fees) and an annual limit of .75 of
1% on asset-based sales charges (as defined in the NASD Rules). Subject to
these limits, the Fund may impose any combination of service fees and asset-
based sales charges under both the Existing Class B Plan and the Proposed
Class B Plan; provided that the total fees do not exceed .75 of 1% per annum
of the average daily net assets of the Class B shares. Pursuant to the
NASD Rules, the aggregate deferred sales charges and asset-based sales charges
on Class B shares of the Fund may not, subject to certain exclusions, exceed
6.25% of total gross sales of Class B shares.

The Existing Class B Plan may not be amended to increase materially the
amount to be spent for the services described therein without approval by a
majority of the holders of the Class B shares of the Fund. In addition, all
material amendments thereof must be approved by vote of a majority of the
Directors, including a majority of the Rule 12b-1 Directors, cast in person at a
meeting called for the purpose of voting on the Plan. So long as the Existing
Class B Plan is in effect, the selection and nomination of Rule 12b-1 Directors
will be committed to the discretion of the Rule 12b-1 Directors.

The Existing Class B Plan may be terminated at any time without payment of
any penalty by the vote of a majority of the Rule 12b-1 Directors or by the vote
of a majority of the outstanding Class B shares of the Fund (as defined in the
Investment Company Act) on written notice to any other party to such plan and
will automatically terminate

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<PAGE>
in the event of its assignment (as defined in the Investment Company Act). For
a more detailed description of the Existing Class B Plan, see "Management of
the Fund -- The Distributors -- Class B Plan."

The Proposed Class B Plan

The Proposed Class B Plan amends the Existing Class B Plan in one material
respect. Under the Existing Class B Plan, the Fund reimburses Prudential
Securities for expenses actually incurred for Distribution Activities up to a
maximum of .75% per annum of the average daily net assets of the Class B shares.
The Proposed Class B Plan authorizes the Fund to pay Prudential Securities the
same maximum annual fee as compensation for its Distribution Activities
regardless of the expenses incurred by Prudential Securities for Distribution
Activities. In contrast to the Existing Class B Plan, the amounts payable by the
Fund under the Proposed Class B Plan would not be directly related to the
expenses actually incurred by Prudential Securities for its Distribution
Activities. Consequently, if Prudential Securities' expenses are less than its
distribution and service fees, it will retain its full fees and realize a
profit. However, if Prudential Securities' expenses exceed the distribution and
service fees received under the Proposed Class B Plan, it will no longer carry
forward such amounts for reimbursement in future years.

Since inception of the Existing Class B Plan, the cumulative reimbursable
expenses incurred thereunder by Prudential Securities have exceeded the amounts
reimbursed by the Fund. As of December 31, 1993, the aggregate amount of
distribution expenses incurred and not yet reimbursed by the Fund or recovered
through contingent deferred sales charges was approximately $276,800.

For the fiscal year ended February 28, 1992, for the ten months ended
December 31, 1992 and for the fiscal year ended December 31, 1993, Prudential
Securities received $408, $115,431, and $271,479, respectively, from the Fund
under the Existing Class B Plan, representing .75% of the average daily net
assets of the Class B shares, and spent approximately $3,500, $409,100 and
$376,700, respectively, for Distribution Activities. Since the maximum annual
fee under the Existing Class B Plan is the same as under the Proposed Class B
Plan, Prudential Securities would have received the same annual fee under the
Proposed Class B Plan as it did under the Existing Class B Plan for the fiscal
year ended February 28, 1992, for the ten months ended December 31, 1992 and for
the fiscal year ended December 31, 1993.

Among the major perceived benefits of a compensation type plan, such as the
Proposed Class B Plan, over a reimbursement type plan, such as the Existing
Class B Plan, is the facilitation of administration and accounting. Under
reimbursement plans, all expenses must be specifically accounted for by the
Distributor and attributed to the specific class of shares of a fund in order to
qualify for reimbursement. Although the Proposed Class B Plan will continue to
require quarterly reporting to the Board of Directors of the amounts accrued and
paid under the Plan and of the expenses actually borne by the Distributor, there
will be no need to match specific expenses to

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reimbursements and no carrying forward of such amounts, as under the Existing
Class B Plan. Thus, the accounting for the Proposed Class B Plan would be
simplified and the timing of when expenditures are to be made by the Distributor
would not be an issue. Currently, because the Existing Class B Plan is a
reimbursement plan, the Distributor

retains an independent expert to perform a study of its methodology
for determining and substantiating which of its expenses should properly be
allocated to the Fund's Class B shares for reimbursement, the cost of which is
borne by the Fund and other funds for which Prudential Securities serves as
Distributor. These considerations, combined with the fact that the cumulative
expenses incurred by Prudential Securities

for Distribution Activities have exceeded the amounts reimbursed by the Fund
under the Existing Class B Plan, suggest that the costs and efforts associated
with a reimbursement plan are unwarranted.

In considering whether to approve the Proposed Class B Plan, the Directors
reviewed, among other things, the nature and scope of the services to be
provided by Prudential Securities, the purchase options available to investors
under the Alternative Purchase Plan, the amount of expenditures under the
Existing Class B Plan, the relationship of such expenditures to the overall cost
structure of the Fund and comparative data with respect to distribution
arrangements adopted by other investment companies. Based upon such review, the
Directors, including a majority of the Rule 12b-1 Directors, determined that
there is a reasonable likelihood that the Proposed Class B Plan will benefit the
Fund and its Class B shareholders.

If approved by Class B shareholders, the Proposed Class B Plan will
continue in effect from year to year, provided such continuance is approved at
least annually by vote of a majority of the Board of Directors, including a
majority of the Rule 12b-1 Directors.

Required Vote

The Proposed Class B Plan requires the approval of a majority of the Fund's
outstanding Class B shares as defined in the Investment Company Act and
described under Proposal No. 3 above. If the Proposed Class B Plan is not
approved, the Existing Class B Plan will continue in its present form.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL NO. 4.

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APPROVAL OF A CHANGE IN THE INVESTMENT OBJECTIVE
OF THE FUND

(Proposal No. 5)

On February 2, 1994, at the request of the Fund's Subadviser, the Board of
Directors considered and recommends for shareholder approval a change in the
investment objective of the Fund. The current investment objective of the Fund
is "to provide high current income consistent with preservation of capital."
The Fund also seeks "to enhance total return through capital appreciation when
such appreciation is available without significant risk to principal." It is
proposed that the investment objective be changed to "to seek to maximize total
return, the components of which are current income and capital appreciation."
Capital appreciation may result, for example, from an improvement in the credit
standing of an issuer whose securities are held in the Fund's portfolio or
from a general lowering of interest rates, or a combination of both. Capital
appreciation may also result from the Fund's investment in currencies that
appreciate relative to the U.S. dollar. The achievement of the Fund's
investment objective will depend upon the investment adviser's analytical and
portfolio management skills. There is no assurance that the objective will be
achieved.

Currently, the Fund invests primarily in U.S. Government and Foreign
Government securities. The Foreign Government securities are rated at least A by
Standard & Poor's Ratings Group (S&P) or Moody's Investors Service (Moody's) or
if unrated, are of equivalent quality in the view of the Subadviser. The Fund
maintains an average maturity of not more than ten years and, generally, does
not invest in securities with remaining maturities of greater than ten years.
The Subadviser would like to broaden the universe of Foreign Government
securities in which the Fund may invest to take advantage of investment
opportunities in emerging markets, including those of Latin America and Asia.
The Fund will continue to maintain an average weighted maturity of ten years
or less and under normal circumstances the Fund would continue to invest at
least 65% of its assets in income producing securities, and would continue to
invest in at least three countries, including the United States.

Based upon the recommendation of the Subadviser, the Board of Directors
believes that the Fund should be permitted to invest in investment grade debt,
i.e., bonds rated within the four highest quality grades as determined by
Moody's (currently Aaa, Aa, A and Baa for bonds, MIG 1, MIG 2, MIG 3 and MIG 4
for notes and P-1 for commercial paper), or S&P (currently AAA, AA, A and BBB
for bonds, SP-1 and SP-2 for notes and A-1 for commercial paper), or by another
nationally recognized statistical rating organization, or in unrated securities
of equivalent quality.

In addition, the Board of Directors believes that the Subadviser should be
permitted to invest up to 10% of the Fund's total assets in bonds rated below
investment grade with a minimum rating of B or, if unrated, deemed by the
Subadviser to be of equivalent quality. The 10% limitation on the purchase
of bonds rated below investment grade is determined at the time of investment.
If subsequent to purchase, a security is assigned a rating lower than investment
grade, the investment adviser is not

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required to dispose of the security, but, if the 10% limitation is exceeded the
Fund may not purchase additional securities rated below investment grade.

These changes would allow the Fund to take advantage of investment
opportunities in emerging markets throughout the world consistent with its
investment objective. They would also allow the Fund to move more quickly into
countries with improving economic fundamentals and improving credit conditions.
These changes would also result in greater credit risk and political risk to the
Fund. Countries whose debt could be purchased after this change (i.e.,
investment grade debt rated lower than A) include Portugal, the Czech Republic,
Greece, South Korea, Hong Kong, Malaysia, Indonesia, Thailand, China, Israel,
Chile and Colombia. It is anticipated that this list will expand over time.

Permitting the Fund to invest up to 10% of its total assets in securities
rated B/B or BB/Ba by S&P or Moody's would provide the investment adviser with
the flexibility to move assets into areas with improving credit where the
rating agencies have not yet acted. This would allow the Fund to invest in
debt securities of various countries including Venezuela, Turkey, Argentina
and Mexico. The Subadviser believes that investing in the debt securities of
emerging markets offers the Fund an opportunity for capital appreciation as well
as higher yield. Such investments may also entail a higher degree of risk.

In the view of the Subadviser, the current credit quality limitations
deprive the Fund of opportunities to achieve greater total return by investing
in lower quality securities. Lower quality securities generally offer a higher
current yield and a greater chance for capital appreciation than those in the
higher-rated categories. Also, the market price of such securities may increase
as their credit quality improves.

Special Risk Considerations

Debt securities which are rated Baa by Moody's are described by Moody's as
being investment grade but are also characterized as having speculative
characteristics. Bonds rated below Baa by Moody's and BBB by Standard & Poor's,
commonly known as "junk bonds", are considered speculative.

Lower rated (i.e., high yield) securities are more likely to react
adversely to developments affecting market and credit risk than are more highly
rated securities, which react primarily to movements in the general level of
interest rates. Lower quality debt securities, however, present higher risks
of untimely interest and principal payments, default and price volatility than
higher quality securities. These securities may present problems of liquidity
and valuation because, to the extent that there is no established retail
secondary market, there may be thin trading of lower rated bonds. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the value and liquidity of lower rated bonds. As a
result, the Subadviser could find it more difficult to sell these securities or
may be able to sell the securities only at prices lower than if such securities
were widely traded, and it may be difficult for the Board of Directors to
determine the fair valuation of such securities.

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The Subadviser considers both credit risk and market risk in making investment
decisions for the Fund. Credit ratings alone may fail to adequately address the
credit risks of lower quality debt securities, especially with respect to
subsequent events affecting the securities; thus the Subadviser may need to
depend on its independent analysis of the risks of such securities.

Summary of Proposed Changes

For the reasons set forth above, the Board of Directors believes that the
Fund and its shareholders would benefit if the Fund were permitted to invest
with a "total return" approach in investment grade debt securities with a 10%
basket in securities rated below investment grade with a minimum rating of B or,
if unrated, deemed by the Subadviser to be of equivalent quality.

The current investment objective emphasizes high current income consistent
with preservation of capital. The secondary objective to enhance total return
emphasizes capital appreciation when such appreciation is available without
significant risk to principal. The lowering of the credit quality of the Fund
would necessitate a change in the fundamental investment objective. Investing in
bonds rated below investment grade and with more speculative elements would be
inconsistent with investing in bonds having a minimum risk to principal or
capital. Securities rated Ba/B by Moody's or BB/B by Standard & Poor's are
considered by such rating services to have speculative elements. Furthermore,
the revised investment objective would also reflect the increased volatility in
the foreign currency markets, particularly brought upon by the changes in the
European Monetary System's Exchange Rate Mechanism. Under the Exchange Rate
Mechanism or ERM, a group of European countries agreed to maintain their
exchange rates within predetermined bands. This agreement was modified after
several countries stopped participating in the ERM in 1992. The remaining
members of the ERM agreed in 1993 to allow their currencies to fluctuate
against one another to a much wider degree. A fund that is exposed to currency
fluctuations will, under certain market conditions, have risk to principal.

The Board of Directors has concluded that adoption of Proposal No. 5 is in
the best interests of the Fund and its shareholders. If Proposal No. 5 is
adopted, the Fund will implement its new investment objective gradually in the
ordinary course of business.

Required Vote

A change in investment objective is a change in "fundamental policy" which
requires the approval of a majority of the outstanding voting securities of
the Fund. Under the Investment Company Act, a majority of the outstanding
voting securities is defined as the lesser of (i) 67% of the Fund's outstanding
shares represented at a meeting at which more than 50% of the Fund's outstanding
shares are present in person or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares. If the proposed change in investment objective is
not approved, the current investment

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objective would remain unchanged and the Fund would be limited to investing
primarily in high quality debt securities.

THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 5.

APPROVAL OF AN AMENDMENT TO THE FUND'S INVESTMENT RESTRICTIONS TO CLARIFY
THAT COLLATERAL ARRANGEMENTS WITH RESPECT TO INTEREST RATE SWAP TRANSACTIONS,
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLL TRANSACTIONS ARE NOT DEEMED TO BE
THE ISSUANCE OF A SENIOR SECURITY OR THE PLEDGE OF ASSETS

(Proposal No. 6)

On February 2, 1994, the Board of Directors approved an amendment to the
Fund's investment restrictions, which, if approved by shareholders, would
clarify that collateral arrangements with respect to interest rate swap
transactions, reverse repurchase agreements and dollar roll transactions are not
considered to be the issuance of a senior security or the pledge of assets. The
Board of Directors recommends that shareholders of the Fund approve the
amendment which would change Investment Restriction No. 6.

While the Fund currently does not have the ability to enter into interest
rate swap transactions and dollar rolls, it may seek Board approval to engage
in such transactions in the future and may wish to establish collateral
arrangement with respect to such transactions. With respect to interest rate
swaps, the Fund would enter into such transactions primarily to preserve a
return or spread on a particular investment or to protect against an increase
in price of a security the Fund anticipates purchasing at a later date. The
Fund would enter into interest rate swaps as a hedge and not as a speculative
investment. The Fund would enter into swaps on a net basis whereby the two
payment streams are netted out with the Fund paying or receiving only the
net amount of the two payments. The net amount of the Fund's obligations
over its entitlements with respect to each swap transaction would be accrued
on a daily basis and an amount of cash, U.S. Government securities or liquid
high grade debt obligations having an aggregate value at least equal to the
accrued excess would be maintained in a segregated account by the Fund's
custodian in a manner that satisfies the requirements of the Investment
Company Act.

Dollar rolls are transactions in which the Fund would sell securities for
delivery in the current month and simultaneously contract to repurchase similar
securities at a specified date in the future from the same party. The Fund
would establish a segregated account with its custodian, in a manner that
satisfies the requirements of the Investment Company Act of 1940, in which it
would maintain cash, U.S. Government securities or other liquid high grade debt
obligations equal to the value of its obligations in respect to the dollar roll.

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Insomuch as segregated accounts would be established for these hedging
transactions, the Fund believes that such obligations would not constitute
senior securities.

In today's market, swaps and dollar rolls often contain collateral
arrangements whereby each counterparty will agree to pledge assets to the other
to secure the amount of that party's obligations. The Fund's Board of Directors
believes that the ability to establish collateral arrangements with respect to
swap transactions and dollar rolls would better enable the Fund to enter into
such transactions in the future and therefore recommends that the Fund's
investment restrictions be clarified to ensure that the Fund could establish
such collateral arrangements. In addition, while the Fund also currently does
not have the ability to enter into reverse repurchase agreements, it may seek
Board approval to engage in such transactions in the future and may wish to
establish collateral arrangements with respect to these transactions as well.

Proposed Amendment to the Fund's Investment Restriction No. 6

To clarify that collateral arrangements with respect to interest rate swap
transactions, reverse repurchase agreements and dollar roll transactions would
not be considered to be the issuance of a senior security or the pledge of
assets, Investment Restriction No. 6 is proposed to be amended as described
below (added language is underlined). Investment Restriction No. 6 provides
that the Fund may not:

6. Issue senior securities, borrow money or pledge its assets, except
that the Fund may borrow up to 20% of the value of its total assets
(calculated when the loan is made) for temporary or extraordinary or
emergency purposes or for the clearance of transactions. The Fund may
pledge up to 20% of the value of its total assets to secure such
borrowings. For purposes of this restriction, the purchase or sale of
securities on a when-issued or delayed-delivery basis, collateral
arrangements with respect to interest rate swap transactions, reverse
repurchase agreements or dollar roll transactions, options, futures
contracts and options or futures contracts and collateral arrangements
with respect to initial and variation margins are not deemed to be a
pledge of assets or the issuance of a senior security; and neither such
arrangements, nor the purchase or sale of interest rate futures contracts
or other financial futures contracts or the purchase or sale of related
options nor obligations of the Fund to the Directors pursuant to deferred
compensation arrangements are deemed to be the issuance of a senior
security.

The Board of Directors believes that adoption of Proposal No. 6 is in the
best interest of the Fund and its shareholders.

Required Vote

Amendment of the Fund's investment restriction as described above requires
the approval of a majority of the Fund's outstanding voting securities (as
defined in the Investment Company Act and described under Proposal No. 5 above).
If the proposed change in investment policy is not approved, the current
investment restriction would

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remain a fundamental policy which could not be changed without the approval
of a majority of the outstanding voting securities of the Fund.

THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 6.

RATIFICATION OF INDEPENDENT ACCOUNTANTS

(Proposal No. 7)

The Board of Directors of the Fund, including Directors who are not
interested persons of the Fund, has selected Price Waterhouse as independent
accountants for the Fund for the fiscal year ending December 31, 1994. The
ratification of the selection of independent public accountants is to be voted
upon at the Meeting and it is intended that the persons named in the
accompanying Proxy will vote for Price Waterhouse. No representative of Price
Waterhouse is expected to be present at the Meeting of Shareholders.

The policy of the Board of Directors regarding engaging independent
accountants' services is that management may engage the Fund's principal
independent public accountants to perform any service(s) normally provided by
independent accounting firms, provided that such service(s) meet(s) any and all
of the independence requirements of the American Institute of Certified Public
Accountants and the SEC. In accordance with this policy, the Audit Committee
reviews and approves all services provided by the independent public accountants
prior to their being rendered. The Board of Directors of the Fund 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 a majority of the shares present, in person or by
proxy, at the Meeting is required for ratification.

THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 7.

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
interest of the Fund.

SHAREHOLDER PROPOSALS

The Fund is not required to hold annual meetings of shareholders and the
Board of Directors currently does not intend to hold such meetings unless
shareholder action is

34
<PAGE>
<PAGE>
required in accordance with the Investment Company Act or the Fund's By-laws.
A shareholder proposal intended to be presented at any meeting of shareholders
of the Fund hereinafter called must be received by the Fund a reasonable time
before the Board of Directors' solicitation relating thereto is made in order
to be included in the Fund's proxy statement and form of proxy relating to that
meeting and presented at the meeting. The mere submission of a proposal by a
shareholder does not guarantee that such proposal will be included in the proxy
statement because certain rules under the federal securities laws must be
complied with before inclusion of the proposal is required.

S. Jane Rose
Secretary

Dated: April 18, 1994

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.

EXHIBIT A

PRUDENTIAL MUTUAL FUND MANAGEMENT, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993

ASSETS

CASH AND SHORT-TERM INVESTMENTS ............................ $42,667,507
LOAN TO AFFILIATE .......................................... 85,000,000
MANAGEMENT, ADMINISTRATION AND OTHER FEES
RECEIVABLE ................................................ 17,897,292
TRANSFER AGENCY AND FIDUCIARY FEES
RECEIVABLE ................................................ 3,744,874
FURNITURE, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, NET ......................................... 10,495,702
OTHER ASSETS ............................................... 4,676,430
------------
$164,481,805
============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

Due to affiliates ......................................... $48,794,366
Accounts payable and accrued expenses ..................... 11,208,209
Income taxes payable to affiliate--net .................... 2,937,828
------------
62,940,403
------------

COMMITMENTS (Note 6)

STOCKHOLDERS' EQUITY:
Class A common stock, $1 par value (1,000 shares
authorized, 850 shares outstanding) ...................... 850
Class B common stock, $1 par value (1,000 shares
authorized, 150 shares outstanding) ...................... 150
Additional paid-in capital ................................ 24,999,000
Retained earnings ......................................... 76,541,402
------------
101,541,402
------------
$164,481,805
============

See notes to consolidated statement of financial condition.

A-1
<PAGE>
<PAGE>

PRUDENTIAL MUTUAL FUND MANAGEMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Prudential Mutual Fund Management, Inc. ("PMF") and subsidiaries (the
"Company"), an indirect wholly-owned subsidiary of The Prudential Insurance
Company of America (the "Prudential"), were created to operate as the manager,
distributor and/or transfer agent for investment companies.

Principles of Consolidation

The consolidated financial statement includes the accounts of PMF and its
wholly-owned subsidiaries, Prudential Mutual Fund Services, Inc. ("PMFS") and
Prudential Mutual Fund Distributors, Inc. ("PMFD"). All intercompany profits,
transactions and balances have been eliminated.

Income Taxes

The Company is a member of a group of affiliated companies which join in
filing a consolidated Federal income tax return. Pursuant to a tax allocation
agreement, tax expense is determined for individual profitable companies on a
separate return basis. Profit members pay this amount to an affiliated company
which in turn apportions the payment among the loss members in proportion to
their losses. In January 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). The
adoption of SFAS 109 did not have a material effect on the Company's financial
position.

2. SHORT-TERM INVESTMENTS

At December 31, 1993, the Company had invested $35,411,571 in several money
market funds which PMF manages.

3. FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Furniture, equipment and leasehold improvements consist of the following:

Furniture ........................................... $ 6,481,799
Equipment ........................................... 9,181,984
Leasehold improvements .............................. 3,407,213
-----------
19,070,996
Less accumulated depreciation and amortization ...... 8,575,294
-----------
$10,495,702
===========

A-2
<PAGE>
<PAGE>

4. RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company participates in a variety
of financial and administrative transactions with affiliates.

The loan to affiliate bears interest at 3.45 percent at December 31, 1993
and is due on demand.

The caption "Due to affiliates" includes $18,241,795 at December 31, 1993
for reimbursement of employee compensation and benefits, and other
administrative and operating expenses. This amount is noninterest-bearing and
payable on demand.

The Company has entered into subadvisory agreements with The Prudential
Investment Corporation ("PIC"), a wholly-owned subsidiary of Prudential. Under
these agreements, PIC furnishes investment advisory services to substantially
all the funds for which the Company acts as Manager. At December 31, 1993 there
were unpaid fees due to PIC of $23,926,277, included in the caption "Due to
affiliates."

Distribution expenses include commissions and account servicing fees paid
to, or on account of, financial advisors of Prudential Securities Incorporated
("Prudential Securities") and Pruco Securities Corporation ("PruSec"),
affiliated broker-dealers and indirect wholly-owned subsidiaries of Prudential,
advertising expenses, the cost of printing and mailing prospectuses to potential
investors, and indirect and overhead costs of Prudential Securities and PruSec,
including lease, utility, communications and sales promotion expenses. At
December 31, 1993 there were unpaid distribution expenses of approximately
$6,626,000, included in the caption "Due to affiliates."

5. CAPITAL

PMFD is subject to the SEC Uniform Net Capital Rule (Rule 15c3-1), which
requires the maintenance of minimum net capital and requires that the ratio of
aggregate indebtedness to net capital, both as defined, shall not exceed 15 to
1. At December 31, 1993, PMFD had net capital of $2,308,981, which was
$1,859,405 in excess of its required net capital of $449,576. PMFD had a ratio
of aggregate indebtedness to net capital of 2.9 to 1.

6. COMMITMENTS

The Company leases office space under operating leases expiring in 2003.
The leases are subject to escalation based upon certain costs incurred by the
lessor. Future minimum rentals, as of December 31, 1993, under the leases, are
as follows:

Year Minimum Rental
---- --------------
1994 .................................... $ 2,738,000
1995 .................................... 2,865,000
1996 .................................... 3,375,000
1997 .................................... 3,385,000
1998 .................................... 3,230,000
Thereafter ................................. 13,800,000
-----------
$29,393,000
===========

A-3
<PAGE>

<PAGE>

7. PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company has two defined benefit pension plans (the "Plans") sponsored
by the Prudential and Prudential Securities. The Plans cover substantially all
of the Company's employees. The funding policy is to contribute annually the
amount necessary to satisfy the Internal Revenue Service funding standards. In
addition, the Company has two defined benefit plans for key executives, the
Supplemental Retirement Plan (SRP) for which estimated pension costs are
currently accrued but not funded.

The Company provides certain health care and life insurance benefits for
eligible retired employees. Effective January 1, 1993, the Company adopted
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("SFAS 106"). SFAS 106 changed
the practice of accounting for postretirement benefits on a cash basis to an
accrual basis, whereby employers record the projected future cost of providing
such postretirement benefits as employees render services instead of when
benefits are paid. This new accounting method has no effect on the Company's
cash outlays for these retirement benefits. The adoption of SFAS 106 did not
materially impact the Company's financial position.

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits," ("SFAS 112") which is effective for fiscal years beginning after
December 15, 1993. Although several benefits are fully insured which result in
no SFAS 112 obligation, the Company currently has an obligation and resulting
expense under SFAS 112 for medical benefits provided under long-term disability.
The Company will adopt SFAS 112 on January 1, 1994. Management believes that
implementation will have no material effect on the Company's financial position.

8. CONTINGENCY

On October 12, 1993, a purported class action lawsuit was instituted
against PMF, et al and certain current and former directors of a fund managed by
PMF. The plaintiffs seek damages in an unspecified amount for excessive
management and distribution fees they allege were incurred by them. Although the
outcome of this litigation cannot be predicted at this time, the defendants
believe they have meritorious defenses to the claims asserted in the complaint
and intend to defend this action vigorously. In any case, management does not
believe that the outcome of this action is likely to have a material adverse
effect on the Company's financial position.

A-4
<PAGE>
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of
Prudential Mutual Fund Management, Inc.:

We have audited the accompanying consolidated statement of financial
condition of Prudential Mutual Fund Management, Inc. and subsidiaries as of
December 31, 1993. This consolidated financial statement is the responsibility
of the Company's management. Our responsibility is to express an opinion on this
consolidated financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statement is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated statement of
financial condition. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such consolidated statement of financial condition presents
fairly, in all material respects, the financial position of Prudential Mutual
Fund Management, Inc. and subsidiaries at December 31, 1993 in conformity with
generally accepted accounting principles.

Deloitte & Touche

New York, New York
January 26, 1994

A-5
<PAGE>
<PAGE>

EXHIBIT B

FORM OF AMENDMENT TO ARTICLES OF INCORPORATION

Article IV, Section 1 of the Fund's Articles of Incorporation are proposed
to be amended and restated as follows:

ARTICLE IV
COMMON STOCK

Section 1. The total number of shares of capital stock which the
Corporation shall have authority to issue is 2,000,000,000 shares of the par
value of $.001 per share and of the aggregate par value of $2,000,000 to be
divided initially into three classes, consisting of 666,666,666 shares of Class
A Common Stock, 666,666,666 shares of Class B Common Stock and 666,666,668
shares of Class C Common Stock.

(a) Each share of Class A Common Stock, Class B Common Stock and Class
C Common Stock of the Corporation shall represent the same interest in the
Corporation and have identical voting, dividend, liquidation and other
rights except that (i) Expenses related to the distribution of each class
of shares shall be borne solely by such class; (ii) The bearing of such
expenses solely by shares of each class shall be appropriately reflected
(in the manner determined by the Board of Directors) in the net asset
value, dividends, distribution and liquidation rights of the shares of such
class; (iii) The Class A Common Stock shall be subject to a front-end sales
load and a Rule 12b-1 distribution fee as determined by the Board of
Directors from time to time; (iv) The Class B Common Stock shall be subject
to a contingent deferred sales charge and a Rule 12b-1 distribution fee as
determined by the Board of Directors from time to time; and (v) The Class C
Common Stock shall be subject to a contingent deferred sales charge and a
Rule 12b-1 distribution fee as determined by the Board of Directors from
time to time. All shares of each particular class shall represent an equal
proportionate interest in that class, and each share of any particular
class shall be equal to each other share of that class.

(b) Each share of the Class B Common Stock of the Corporation shall be
converted automatically, and without any action or choice on the part of
the holder thereof, into shares (including fractions thereof) of the Class
A Common Stock of the Corporation (computed in the manner hereinafter
described), at the applicable net asset value of each Class, at the time of
the calculation of the net asset value of such Class B Common Stock at such
times, which may vary between shares originally issued for cash and shares
purchased through the automatic reinvestment of dividends and distributions
with respect to Class B shares (each, a "Conversion Date"), determined by
the Board of Directors in accordance with applicable laws, rules,
regulations, and interpretations of the Securities and Exchange Commission
and the National Association of Securities Dealers, Inc. and pursuant to
such procedures as may be established from time to

B-1
<PAGE>
<PAGE>

time by the Board of Directors and disclosed in the Corporation's then
current prospectus for such Class A and Class B Common Stock.

(c) The number of shares of the Class A Common Stock of the
Corporation into which a share of the Class B Common Stock is converted
pursuant to Paragraph (l)(b) hereof shall equal the number (including for
this purpose fractions of a share) obtained by dividing the net asset value
per share of the Class B Common Stock for purposes of sales and redemptions
thereof at the time of the calculation of the net asset value on the
Conversion Date by the net asset value per share of the Class A Common
Stock for purposes of sales and redemptions thereof at the time of the
calculation of the net asset value on the Conversion Date.

(d) On the Conversion Date, the shares of the Class B Common Stock of
the Corporation converted into shares of the Class A Common Stock will
cease to accrue dividends and will no longer be outstanding and the rights
of the holders thereof will cease (except the right to receive declared but
unpaid dividends to the Conversion Date).

(e) The Board of Directors shall have full power and authority to
adopt such other terms and conditions concerning the conversion of shares
of the Class B Common Stock to shares of the Class A Common Stock as they
deem appropriate; provided such terms and conditions are not inconsistent
with the terms contained in this Section 1 and subject to any restrictions
or requirements under the Investment Company Act of 1940 and the rules,
regulations and interpretations thereof promulgated or issued by the
Securities and Exchange Commission, any conditions or limitations contained
in an order issued by the Securities and Exchange Commission applicable to
the Corporation, or any restrictions or requirements under the Internal
Revenue Code of 1986, as amended, and the rules, regulations and
interpretations promulgated or issued thereunder.

B-2
<PAGE>
<PAGE>

EXHIBIT C

PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.

Distribution and Service Plan

(Class A Shares)

Introduction

The Distribution and Service Plan (the Plan) set forth below which is
designed to conform to the requirements of Rule 12b-1 under the Investment
Company Act of 1940 (the Investment Company Act) and Article III, Section 26 of
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. (NASD) has been adopted by Prudential Intermediate Global Income Fund, Inc.
(the Fund) and by Prudential Mutual Fund Distributors, Inc., the Fund's
distributor (the Distributor).

The Fund has entered into a distribution agreement pursuant to which the
Fund will employ the Distributor to distribute Class A shares issued by the
Fund (Class A shares). Under the Plan, the Fund intends to pay to the
Distributor, as compensation for its services, a distribution and service fee
with respect to Class A shares.

A majority of the Board of Directors of the Fund, including a majority of
those Directors who are not "interested persons" of the Fund (as defined in
the Investment Company Act) and who have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the Rule
12b-1 Directors), have determined by votes cast in person at a meeting called
for the purpose of voting on this Plan that there is a reasonable likelihood
that adoption of this Plan will benefit the Fund and its shareholders.
Expenditures under this Plan by the Fund for Distribution Activities (defined
below) are primarily intended to result in the sale of Class A shares of the
Fund within the meaning of paragraph (a)(2) of Rule 12b-1 promulgated under the
Investment Company Act.

The purpose of the Plan is to create incentives to the Distributor and/or
other qualified broker-dealers and their account executives to provide
distribution assistance to their customers who are investors in the Fund, to
defray the costs and expenses associated with the preparation, printing and
distribution of prospectuses and sales literature and other promotional and
distribution activities and to provide for the servicing and maintenance of
shareholder accounts.

C-1
<PAGE>
<PAGE>

The Plan

The material aspects of the Plan are as follows:

1. Distribution Activities

The Fund shall engage the Distributor to distribute Class A shares of the
Fund and to service shareholder accounts using all of the facilities of the
distribution networks of Prudential Securities Incorporated (Prudential
Securities) and Pruco Securities Corporation (Prusec), including sales personnel
and branch office and central support systems, and also using such other
qualified broker-dealers and financial institutions as the Distributor may
select. Services provided and activities undertaken to distribute Class A shares
of the Fund are referred to herein as "Distribution Activities."

2. Payment of Service Fee

The Fund shall pay to the Distributor as compensation for providing
personal service and/or maintaining shareholder accounts a service fee of .25 of
1% per annum of the average daily net assets of the Class A shares (service
fee). The Fund shall calculate and accrue daily amounts payable by the Class A
shares of the Fund hereunder and shall pay such amounts monthly or at such other
intervals as the Board of Directors may determine.

3. Payment for Distribution Activities

The Fund shall pay to the Distributor as compensation for its services a
distribution fee, together with the service fee (described in Section 2 hereof),
of .30 of 1% per annum of the average daily net assets of the Class A shares of
the Fund for the performance of Distribution Activities. The Fund shall
calculate and accrue daily amounts payable by the Class A shares of the Fund
hereunder and shall pay such amounts monthly or at such other intervals as the
Board of Directors may determine. Amounts payable under the Plan shall be
subject to the limitations of Article III, Section 26 of the NASD Rules of Fair
Practice.

Amounts paid to the Distributor by the Class A shares of the Fund will not
be used to pay the distribution expenses incurred with respect to any other
class of shares of the Fund except that distribution expenses attributable to
the Fund as a whole will be allocated to the Class A shares according to the
ratio of the sales of Class A shares to the total sales of the Fund's shares
over the Fund's fiscal year or such other allocation method approved by the
Board of Directors. The allocation of distribution expenses among classes will
be subject to the review of the Board of Directors.

The Distributor shall spend such amounts as it deems appropriate on
Distribution Activities which include, among others:

(a) amounts paid to Prudential Securities for performing services
under a selected dealer agreement between Prudential Securities and the
Distributor for

C-2
<PAGE>
<PAGE>

sale of Class A shares of the Fund, including sales
commissions and trailer commissions paid to, or on account of, account
executives and indirect and overhead costs associated with Distribution
Activities, including central office and branch expenses;

(b) amounts paid to Prusec for performing services under a selected
dealer agreement between Prusec and the Distributor for sale of Class A
shares of the Fund, including sales commissions and trailer commissions
paid to, or on account of, agents and indirect and overhead costs
associated with Distribution Activities;

(c) advertising for the Fund in various forms through any available
medium, including the cost of printing and mailing Fund prospectuses,
statements of additional information and periodic financial reports and
sales literature to persons other than current shareholders of the Fund;
and

(d) sales commissions (including trailer commissions) paid to, or on
account of, broker-dealers and financial institutions (other than
Prudential Securities and Prusec) which have entered into selected dealer
agreements with the Distributor with respect to Class A shares of the Fund.

4. Quarterly Reports; Additional Information

An appropriate officer of the Fund will provide to the Board of Directors
of the Fund for review, at least quarterly, a written report specifying in
reasonable detail the amounts expended for Distribution Activities (including
payment of the service fee) and the purposes for which such expenditures were
made in compliance with the requirements of Rule 12b-1. The Distributor will
provide to the Board of Directors of the Fund such additional information as the
Board shall from time to time reasonably request, including information about
Distribution Activities undertaken or to be undertaken by the Distributor.

The Distributor will inform the Board of Directors of the Fund of the
commissions and account servicing fees to be paid by the Distributor to account
executives of the Distributor and to broker-dealers and financial institutions
which have selected dealer agreements with the Distributor.

5. Effectiveness; Continuation

The Plan shall not take effect until it has been approved by a vote of a
majority of the outstanding voting securities (as defined in the Investment
Company Act) of the Class A shares of the Fund.

If approved by a vote of a majority of the outstanding voting securities of
the Class A shares of the Fund, the Plan shall, unless earlier terminated in
accordance with its terms, continue in full force and effect thereafter for so
long as such continuance is specifically approved at least annually by a
majority of the Board of Directors of the Fund and a majority of the Rule 12b-1
Directors by votes cast in person at a meeting called for the purpose of voting
on the continuation of the Plan.

C-3
<PAGE>
<PAGE>

6. Termination

This Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Directors, or by vote of a majority of the outstanding voting securities
(as defined in the Investment Company Act) of the Class A shares of the Fund.

7. Amendments

The Plan may not be amended to change the combined service and distribution
expenses to be paid as provided for in Sections 2 and 3 hereof so as to increase
materially the amounts payable under this Plan unless such amendment shall be
approved by the vote of a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Class A shares of the Fund. All
material amendments of the Plan shall be approved by a majority of the Board of
Directors of the Fund and a majority of the Rule 12b-1 Directors by votes cast
in person at a meeting called for the purpose of voting on the Plan.

8. Rule 12b-1 Directors

While the Plan is in effect, the selection and nomination of the Rule 12b-1
Directors shall be committed to the discretion of the Rule 12b-1 Directors.

9. Records

The Fund shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 4 hereof, for a period of not less than six
years from the date of effectiveness of the Plan, such agreements or reports,
and for at least the first two years in an easily accessible place.

Dated:

C-4
<PAGE>
<PAGE>

EXHIBIT D

PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.

DISTRIBUTION AND SERVICE PLAN

(CLASS B SHARES)

Introduction

The Distribution and Service Plan (the Plan) set forth below which is
designed to conform to the requirements of Rule 12b-1 under the Investment
Company Act of 1940 (the Investment Company Act) and Article III, Section 26 of
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. (NASD) has been adopted by Prudential Intermediate Global Income Fund, Inc.
(the Fund) and by Prudential Securities Incorporated (Prudential Securities),
the Fund's distributor (the Distributor).

The Fund has entered into a distribution agreement pursuant to which the
Fund will employ the Distributor to distribute Class B shares issued by the
Fund (Class B shares). Under the Plan, the Fund intends to pay to the
Distributor, as compensation for its services, a distribution and service
fee with respect to Class B shares.

A majority of the Board of Directors of the Fund including a majority who
are not "interested persons" of the Fund (as defined in the Investment Company
Act) and who have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it (the Rule 12b-1 Directors), have
determined by votes cast in person at a meeting called for the purpose of voting
on this Plan that there is a reasonable likelihood that adoption of this Plan
will benefit the Fund and its shareholders. Expenditures under this Plan by the
Fund for Distribution Activities (defined below) are primarily intended to
result in the sale of Class B shares of the Fund within the meaning of paragraph
(a)(2) of Rule 12b-1 promulgated under the Investment Company Act.

D-1
<PAGE>
<PAGE>

The Plan

The material aspects of the Plan are as follows:

1. Distribution Activities

The Fund shall engage the Distributor to distribute Class B shares of the
Fund and to service shareholder accounts using all of the facilities of the
Prudential Securities distribution network including sales personnel and branch
office and central support systems, and also using such other qualified
broker-dealers and financial institutions as the Distributor may select,
including Pruco Securities Corporation (Prusec). Services provided and
activities undertaken to distribute Class B shares of the Fund are referred to
herein as "Distribution Activities."

2. Payment of Service Fee

The Fund shall pay to the Distributor as compensation for providing
personal service and/or maintaining shareholder accounts a service fee of .25 of
1% per annum of the average daily net assets of the Class B shares (service
fee). The Fund shall calculate and accrue daily amounts payable by the Class B
shares of the Fund hereunder and shall pay such amounts monthly or at such other
intervals as the Board of Directors may determine.

3. Payment for Distribution Activities

The Fund shall pay to the Distributor as compensation for its services a
distribution fee, together with the service fee (described in Section 2 hereof),
of .75 of 1% per annum of the average daily net assets of the Class B shares of
the Fund for the performance of Distribution Activities. The Fund shall
calculate and accrue daily amounts payable by the Class B shares of the Fund
hereunder and shall pay such amounts monthly or at such other intervals as the
Board of Directors may determine. Amounts payable under the Plan shall be
subject to the limitations of Article III, Section 26 of the NASD Rules of Fair
Practice.

Amounts paid to the Distributor by the Class B shares of the Fund will not
be used to pay the distribution expenses incurred with respect to any other
class of shares of the Fund except that distribution expenses attributable to
the Fund as a whole will be allocated to the Class B shares according to the
ratio of the sale of Class B shares to the total sales of the Fund's shares over
the Fund's fiscal year or such other allocation method approved by the Board of
Directors. The allocation of distribution expenses among classes will be subject
to the review of the Board of Directors.

The Distributor shall spend such amounts as it deems appropriate on
Distribution Activities which include, among others:

(a) sales commissions (including trailer commissions) paid to, or on
account of, account executives of the Distributor;

D-2
<PAGE>
<PAGE>

(b) indirect and overhead costs of the Distributor associated with
performance of Distribution Activities including central office and branch
expenses;

(c) amounts paid to Prusec for performing services under a selected
dealer agreement between Prusec and the Distributor for sale of Class B
shares of the Fund, including sales commissions and trailer commissions
paid to, or on account of, agents and indirect and overhead costs
associated with Distribution Activities;

(d) advertising for the Fund in various forms through any available
medium, including the cost of printing and mailing Fund prospectuses,
statements of additional information and periodic financial reports and
sales literature to persons other than current shareholders of the Fund;
and

(e) sales commissions (including trailer commissions) paid to, or on
account of, broker-dealers and other financial institutions (other than
Prusec) which have entered into selected dealer agreements with the
Distributor with respect to Class B shares of the Fund.

4. Quarterly Reports; Additional Information

An appropriate officer of the Fund will provide to the Board of Directors
of the Fund for review, at least quarterly, a written report specifying in
reasonable detail the amounts expended for Distribution Activities (including
payment of the service fee) and the purposes for which such expenditures were
made in compliance with the requirements of Rule 12b-1. The Distributor will
provide to the Board of Directors of the Fund such additional information as
they shall from time to time reasonably request, including information about
Distribution Activities undertaken or to be undertaken by the Distributor.

The Distributor will inform the Board of Directors of the Fund of the
commissions and account servicing fees to be paid by the Distributor to account
executives of the Distributor and to broker-dealers and other financial
institutions which have selected dealer agreements with the Distributor.

5. Effectiveness; Continuation

The Plan shall not take effect until it has been approved by a vote of a
majority of the outstanding voting securities (as defined in the Investment
Company Act) of the Class B shares of the Fund.

If approved by a vote of a majority of the outstanding voting securities of
the Class B shares of the Fund, the Plan shall, unless earlier terminated in
accordance with its terms, continue in full force and effect thereafter for so
long as such continuance is specifically approved at least annually by a
majority of the Board of Directors of the Fund and a majority of the Rule 12b-1
Directors by votes cast in person at a meeting called for the purpose of voting
on the continuation of the Plan.

D-3
<PAGE>
<PAGE>

6. Termination

7. Amendments

The Plan may not be amended to change the combined service and distribution
expenses to be paid as provided for in Sections 2 and 3 hereof so as to increase
materially the amounts payable under this Plan unless such amendment shall be
approved by the vote of a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Class B shares of the Fund. All
material amendments of the Plan shall be approved by a majority of the Board of
Directors of the Fund and a majority of the Rule 12b-1 Directors by votes cast
in person at a meeting called for the purpose of voting on the Plan.

8. Rule 12b-1 Directors

While the Plan is in effect, the selection and nomination of the Rule 12b-1
Directors shall be committed to the discretion of the Rule 12b-1 Directors.

9. Records

Dated:

D-4<PAGE>
<TABLE>
<CAPTION> / /

PLEASE MARK, SIGN,
DATE AND RETURN THE
PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

YOUR PROXY WILL BE ELECTRONICALLY SCANNED.
CAREFULLY DETACH HERE AND RETURN BOTTOM PORTION ONLY.
- - ---------------------------------------------------------------------------------------------------------------------------------
PROXY THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.

PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC. The undersigned hereby appoints Susan C. Cote,
S. Jane Rose and Deborah A. Docs as Proxies,
(CLASS A) each with the power of substitution, and hereby
authorizes each of them to represent and to
ONE SEAPORT PLAZA, vote, as designated below, all the shares of
Class A Common Stock of Prudential Intermediate THIS PROXY WHEN PROPERLY EXECUTED
NEW YORK, NEW YORK 10292 Global Income Fund, Inc. held of record by WILL BE VOTED IN THE MANNER DIRECTED
the undersigned on March 31, 1994 at the HEREIN BY THE UNDERSIGNED SHAREHOLDER(S).
Special Meeting of Shareholders to be held on IF NO DIRECTION IS MADE, THIS PROXY WILL
June 23, 1994, or any adjournment thereof. BE VOTED FOR ALL THE PROPOSALS
LISTED BELOW.

Your Account No.
Your voting shares are:
1-ELECTION OF DIRECTORS PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<C> <S> <C> <C> <C> <C>
For Against Abstain
/X/ /X/ /X/ 2. To approve an amendment of the Fund's Articles of
APPROVE WITHHOLD WITHHOLD Incorporation to permit a conversion feature for 2 /X/ /X/ /X/
ALL ALL THOSE LISTED Class B Shares.
NOMINEES NOMINEES ON BACK

TO WITHHOLD AUTHORITY FOR ANY 3. To approve an amended and restated Class A
INDIVIDUAL NOMINEE, PLEASE Distribution and Service Plan. 3 /X/ /X/ /X/
WRITE NAME ON BACK OF FORM.
4. Not applicable to Class A Shareholders. 4 /X/ /X/ /X/
John C. Davis
Lawrence C. McQuade 5. To approve a change in the Fund's investment objective
Thomas A. Owens, Jr. to seek to maximize total return. 5 /X/ /X/ /X/
Richard A. Redeker
Robert J. Schultz 6. To approve an amendment of the Fund's investment restrictions
Gerald A. Stahl to clarify that collateral arrangements with respect to 6 /X/ /X/ /X/
Stephen Stoneburn interest rate swap transactions, reverse repurchase
Robert H. Wellington agreements and dollar roll transactions are not deemed to be
the issuance of a senior security or the pledge of assets.
PRUDENTIAL MUTUAL FUND SVCS
AUDIT ACCOUNT 7. To ratify the selection by the Board of Directors of Price 7 /X/ /X/ /X/
PO BOX 15025 Waterhouse as independent accountants for the year ending
NEW BRUNSWICK NJ 08906-5025 December 31, 1994.

8. To transact such other business as may properly come before 8 /X/ /X/ /X/
the meeting or any adjournment thereof.

</TABLE>

Only shares of Common Stock of the
Fund of record at the close of
business on March 31, 1994 are entitled
to notice of and to vote at this
Meeting or any adjournment thereof.

Please sign exactly as name appears at
- - -------------------------------------- left. When shares are held by joint
Signature Date tenants, both should sign. When
signing as attorney, executor,
- - -------------------------------------- administrator, trustee or guardian,
Signature (Joint Ownership) 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 name by
authorized person.
<PAGE>
<TABLE>
<CAPTION> /X/

PLEASE MARK, SIGN,
DATE AND RETURN THE
PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC. The undersigned hereby appoints Susan C. Cote,
S. Jane Rose and Deborah A. Docs as Proxies,
(CLASS B) each with the power of substitution, and hereby
authorizes each of them to represent and to
ONE SEAPORT PLAZA, vote, as designated below, all the shares of
Class B Common Stock of Prudential Intermediate THIS PROXY WHEN PROPERLY EXECUTED
NEW YORK, NEW YORK 10292 Global Income Fund, Inc. held of record by WILL BE VOTED IN THE MANNER DIRECTED
the undersigned on March 31, 1994 at the Special HEREIN BY THE UNDERSIGNED SHAREHOLDER(S).
Meeting of Shareholders to be held on IF NO DIRECTION IS MADE, THIS PROXY WILL
June 23, 1994, or any adjournment thereof. BE VOTED FOR ALL THE PROPOSALS
LISTED BELOW.

TO WITHHOLD AUTHORITY FOR ANY 3. To approve an amended and restated Class A
INDIVIDUAL NOMINEE, PLEASE Distribution and Service Plan. 3 /X/ /X/ /X/
WRITE NAME ON BACK OF FORM.
4. To approve an amended and restated Class B 4 /X/ /X/ /X/
Distribution and Service Plan.
John C. Davis
Lawrence C. McQuade 5. To approve a change in the Fund's investment objective
Thomas A. Owens, Jr. to seek to maximize total return. 5 /X/ /X/ /X/
Richard A. Redeker
Robert J. Schultz 6. To approve an amendment of the Fund's investment restrictions
Gerald A. Stahl to clarify that collateral arrangements with respect to 6 /X/ /X/ /X/
Stephen Stoneburn interest rate swap transactions, reverse repurchase
Robert H. Wellington agreements and dollar roll transactions are not deemed to be
the issuance of a senior security or the pledge of assets.
PRUDENTIAL MUTUAL FUND SVCS
AUDIT ACCOUNT 7. To ratify the selection by the Board of Directors of Price 7 /X/ /X/ /X/
PO BOX 15025 Waterhouse as independent accountants for the year ending
NEW BRUNSWICK NJ 08906-5025 December 31, 1994.

8. To transact such other business as may properly come before 8 /X/ /X/ /X/
the meeting or any adjournment thereof.

</TABLE>

Only shares of Common Stock of the
Fund of record at the close of
business on March 31, 1994 are entitled
to notice of and to vote at this
Meeting or any adjournment thereof.