SCHEDULE 14A
(RULE 14A-101)
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 Rule 14a-11(c) or Rule 14a-12
Global Utility Fund, Inc.
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(Name of Registrant as Specified in Its Charter)
Not Applicable
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-(i)(4)
and 0-11
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
<PAGE>
GLOBAL UTILITY FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
October 8, 1999
Dear Shareholder:
Enclosed is a proxy statement asking you to vote for (1) the nominees for
the Board of Directors of Global Utility Fund, Inc. (the "Fund"), (2) the
independent accountants for the Fund, and (3) changes to certain of the Fund's
investment restrictions.
A shareholder meeting is being held on November 8, 1999 to consider these
nominees, the independent accountants, the proposed changes to the Fund's
investment restrictions and to transact any other business that may properly
come before the meeting. This proxy statement contains detailed information
about each of the nominees, information on the independent accountants, and an
explanation of the proposed changes to the Fund's investment restrictions and we
recommend that you read it carefully.
Thank you for your attention to this matter and for your continuing
investment in the Fund.
Very truly yours,
JOHN R. STRANGFELD, JR.
President
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A PROXY card is enclosed along with the proxy statement. Please vote your
shares today by signing and returning the enclosed proxy card in the postage
prepaid envelope provided. The Board of the Fund recommends that you vote "FOR"
each of the nominees for Board Member, "FOR" ratification of the selection of
the independent accountants and "FOR" all proposed changes to the fundamental
investment restrictions of the Fund.
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Enclosed you will find one proxy card relating to the Fund. Please
indicate your voting instructions on the enclosed proxy card, date and sign it,
and return it in the envelope provided. IF YOU SIGN, DATE AND RETURN A PROXY
CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED "FOR" THE
NOMINEES FOR DIRECTOR NAMED IN THE ATTACHED PROXY STATEMENT, "FOR" RATIFICATION
OF THE SELECTION OF THE INDEPENDENT ACCOUNTANTS INDICATED ON THE CARD AND "FOR"
ALL PROPOSED CHANGES TO THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND. In
order to avoid the additional expense to the Fund of further solicitation, we
ask your cooperation in mailing in your proxy card promptly. Unless your proxy
card is signed by the appropriate persons as indicated in the instructions
below, it will not be voted.
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INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and avoid the time and expense to the Fund involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears
in the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on
the proxy card.
3. All Other Accounts: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
Corporate Accounts
(1) XYZ Corp............................ XYZ Corp.
Jane L. Doe, Treasurer
(2) XYZ Corp............................ Jane L. Doe, Treasurer
(3) XYZ Corp. c/o Jane Doe, Treasurer... Jane L. Doe
(4) XYZ Corp. Profit Sharing Plan....... Jane L. Doe, Treasurer
Partnership Accounts
(1) The ABC Partnership................. Robert Fogg, Partner
(2) Fogg and Hale, Limited Partnership.. Robert Fogg, General
Partner
Trust Accounts
(1) ABC Trust Account................... William X. Smith, Trustee
(2) Ron F. Anderson, Trustee u/t/d
12/28/78............................ Ron F. Anderson
Custodial or Estate Accounts
(1) Katherine T. John, Cust.
F/b/o Albert T. John, Jr.
UGMA/UTMA........................... Katherine T. John
(2) Estate of Katherine T. John.......... Albert T. John, Executor
<PAGE>
GLOBAL UTILITY FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
------------------------------
To Our Shareholders:
Notice is hereby given that a Special Meeting of Shareholders of Global
Utility Fund, Inc. (the "Fund") will be held at 10:00 a.m. Eastern time on
November 8, 1999, at Prudential Plaza, 751 Broad Street, 24th Floor, Newark, New
Jersey 07102, for the following purposes:
1. To elect nine Directors.
2. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the fiscal year
ending September 30, 2000.
3. To approve changes to certain fundamental investment
restrictions.
4. To consider and act upon any other business as may properly come
before the Meeting and any adjournments thereof.
Only holders of shares of common stock of the Fund of record at the close
of business on October 1, 1999 are entitled to notice of and to vote at the
Meeting and any adjournments thereof.
DAVID F. CONNOR
Secretary
Dated: October 8, 1999
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WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED, STAMPED 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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<PAGE>
GLOBAL UTILITY FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
(800) 225-1852
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PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of Global
Utility Fund, Inc. (the "Fund") in connection with its solicitation of proxies
for use at the Special Meeting of Shareholders (the "Meeting") of the Fund to be
held at 10:00 a.m. Eastern time on November 8, 1999, at Prudential Plaza, 751
Broad Street, 24th Floor, Newark, New Jersey 07102. The purpose of the Meeting
and the matters to be acted upon are set forth in the accompanying Notice of
Special Meeting of Shareholders.
The close of business on October 1, 1999, has been fixed as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the Meeting. As of October 1, 1999, the Fund had 15,563,910 shares of common
stock outstanding and entitled to vote. Each share will be entitled to one vote
for each proposal at the Meeting. It is expected that the Notice of Special
Meeting of Shareholders, Proxy Statement and form of Proxy will first be mailed
to shareholders on or about October 13, 1999.
The Fund's most recent Annual Report and Semi-Annual Report have
previously been sent to shareholders and may be obtained without charge by
calling (800) 225-1852 (toll free) or by writing to the Fund at Gateway Center
Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.
If the accompanying form of Proxy is properly executed and returned,
shares represented by it will be voted at the Meeting, or any adjournments
thereof, in accordance with the instructions on the Proxy. However, if no
instructions are specified, shares will be voted for the election of the
nominees for Director, for ratification of the selection of the independent
accountants, and for the changes to the fundamental investment restrictions. A
Proxy may be revoked at any time prior to the time it is voted by written notice
to the Secretary of the Fund, by execution of a subsequent Proxy 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 the item, unless
directed to disapprove the item, in which case such shares will be voted against
the proposed adjournment. A shareholder vote may be taken on one or more items
in this Proxy Statement prior to any such adjournment if sufficient votes have
been received and it is otherwise appropriate. In the event that the Meeting is
adjourned, the same procedures will apply at a later Meeting date.
If a Proxy that is properly executed and returned is accompanied by
instructions to withhold authority to vote (an abstention) or 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 for which the broker or
nominee does not have discretionary power), the shares represented thereby, with
respect to matters to be determined by a majority or a plurality of the votes
cast on such matters, will be considered present for purposes of determining the
existence of a quorum for the transaction of business but, not being cast, will
have no effect on the outcome of such matters. Accordingly, abstentions and
broker non-votes will have no effect on Proposals No. 1 and 2, for which the
required vote is a plurality or a majority number of the votes cast, but
effectively will be a vote against Proposal No. 3, which requires approval of a
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majority of the outstanding voting securities under the Investment Company Act
of 1940, as amended ("1940 Act").
Information about persons who owned beneficially more than 5% of the
Fund's outstanding shares as of the record date is set forth below:
5% Shareholders
<TABLE>
<CAPTION>
Name and Address of Percent of
Shareholder Class of Shares Number of Shares Class
- ----------- --------------- ---------------- -----
<S> <C> <C> <C>
Nelag Partners Class C 3,833 5.95
37791 Halper Lake Drive
Rancho Mirage, CA 92270
</TABLE>
To the knowledge of management, the executive officers and Directors of the
Fund, as a group, owned less than 1% of the outstanding shares of the Fund as of
October 1, 1999.
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. Supplementary solicitations may include, without cost to the
Fund, telephonic, telegraphic or oral communication by regular employees of
Prudential Investment Management Services LLC ("PIMS"), the Fund's distributor.
In addition, Shareholder Communications Corporation, a proxy solicitation firm,
may be retained at a cost of approximately $5,000 to solicit shareholders
on behalf of the Fund.
Prudential Investments Fund Management LLC ("PIFM" or the "Manager"),
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, serves
as the Fund's Manager under a management agreement dated as of February 4, 1991.
Investment advisory services are provided to the Fund by Wellington Management
Company, LLP (the "Subadviser"), 75 State Street, Boston, Massachusetts 02109,
with which PIFM has entered into a subadvisory agreement, also dated February 4,
1991. As noted above, PIMS, Gateway Center Three, 100 Mulberry Street, Newark,
New Jersey 07102-4077, serves as the distributor of the Fund's shares. The
Fund's transfer agent is Prudential Mutual Fund Services LLC ("PMFS"), Raritan
Plaza One, Edison, New Jersey 08837. As of July 31, 1999, PIFM served as the
manager to forty-six open-end investment companies, and as manager or
administrator to twenty-two closed-end investment companies, with aggregate
assets of more than $70 billion. The Fund's Board of Directors oversees the
actions of the Fund's Manager and Subadviser and decides upon matters of general
policy.
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<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Board of Directors has acted to expand its membership and has
nominated the nine individuals identified below for election to the Fund's Board
of Directors at the Meeting. Under Proposal No. 1, shareholders of the Fund are
being asked to vote for those nominees. Pertinent information about each nominee
is set forth in the listing below. Each nominee has indicated a willingness to
serve if elected. The Fund does not intend to hold annual meetings of
shareholders unless the election of Directors is required under the 1940 Act.
Accordingly, if elected each nominee will serve for a term of unlimited duration
until his term expires in accordance with the Fund's retirement policy or until
the next meeting of shareholders at which Directors are elected, whichever is
earlier. The Fund's amended retirement policy calls for the retirement of
Directors on December 31 of the year in which they reach the age of 75.
The increase in the size of the Board and the nomination of these nominees
to serve as the Board Members for the Fund reflects an overall plan to
coordinate and enhance the efficiency of the governance of the Fund. The Fund's
Board believes that the Fund will benefit from the diversity and experience of
the nominees that would comprise the expanded Board. These nominees have had
distinguished careers in business, finance, government and other areas and will
bring a wide range of expertise to the Board. Six of the nine nominees have no
affiliation with PIFM or The Prudential Insurance Company of America
("Prudential") and would be independent Board Members. Independent Board Members
are charged with special responsibilities, among other things, to approve
advisory, distribution and similar agreements between the Fund and management.
They also constitute the members of the Board's Audit and Nominating Committees.
In the course of their duties, Board Members must review and understand large
amounts of financial and technical material and must be willing to devote
substantial amounts of time to their duties. Due to the demands of service on
the Boards, independent nominees may need to reject other attractive
opportunities. Each of the independent nominees already serves as an independent
Board Member for other funds within the Prudential Mutual Fund Complex and
understands the operations of the complex. The three nominees for Director who
are affiliated with the Fund's Manager or Prudential currently serve on the
Board of most of the other funds in the Prudential Mutual Fund Complex. It is
proposed that they join the Fund's Board to provide continuity and consistency.
Effective October 1, 1999, the fee paid to each independent Director of
the funds in the cluster of the Prudential Mutual Funds of which the Fund is a
part is $55,000 per year. The Fund's proportionate annual share of this
aggregate fee is approximately $6,000. Board Members affiliated with PIFM or
Prudential will continue to receive no compensation from the Fund (or any other
fund in the Prudential Mutual Fund Complex). Board Members will continue to be
reimbursed for any expenses incurred in attending meetings and for other
incidental expenses. Effective October 1, 1999, independent Board Members
serving as chair of the Audit Committee and Nominating Committee within the
Fund's cluster receive an additional $2,000 per year per Committee (for which
the Fund's proportionate share is about $200). Mr. Dorsey has been elected Chair
of the Fund's Audit Committee and Nominating Committee for the forthcoming year.
Mr. Mooney, the cluster's representative on the Executive Committee, which
serves as liaison between the Prudential Mutual Funds and Fund management,
receives an additional $8,000 per year from the funds within the Fund's cluster
(the Fund's proportionate share is about $800). The annual Board fees per fund
and per cluster in the Prudential Mutual Fund Complex may be reviewed
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<PAGE>
periodically and changed by each fund's Board. The other funds in the Fund's
cluster are First Financial Fund, Inc., The High Yield Plus Fund, Inc.,
Prudential Diversified Funds, Target Funds and The Target Portfolio Trust.
The following table sets forth information relating to the compensation
paid to Board Members and Board nominees during the past fiscal year:
COMPENSATION TABLE
Total Compensation
Aggregate paid to Board
Compensation Members From Fund
Board Members and Nominees(1) From Fund and Fund Complex(2)
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Dorsey, Eugene C.* $5,000 $ 70,000(17/46)+
Gunia, Robert F. $ 0 $ 0
LaBlanc, Robert E. $ 0 $ 45,000(14/17)+
McCorkindale, Douglas H.* $5,000 $ 70,000(23/40)+
Mooney, Thomas T.* $5,000 $115,000(35/70)+
Odenath, Jr., David R. $ 0 $ 0
Stoneburn, Stephen $ 0 $ 45,000(14/17)+
Strangfeld, Jr., John R. $ 0 $ 0
Whitehead, Clay T. $ 0 $ 45,000(18/24)+
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* Total compensation from all funds in the Fund Complex for the calendar year
ended December 31, 1998 includes amounts deferred at the election of
Directors under the funds' deferred compensation plan. Including accrued
interest, total compensation amounted to approximately $85,445 for Mr.
Dorsey, $71,145 for Mr. McCorkindale and $119,740 for Mr. Mooney. During
the calendar year ended December 31, 1998, Messrs. Dorsey and McCorkindale
elected to defer all compensation from the Fund. Including accrued
interest, aggregate compensation with respect to the Fund amounted to
$5,526 and $5,696 for Messrs. Dorsey and McCorkindale, respectively.
+ Indicates number of funds/portfolios in Fund Complex (including the Fund)
to which aggregate compensation relates.
(1) Board members who are "interested," as defined in the 1940 Act, did not
receive compensation from the Fund or Fund Complex.
(2) No fund within the Fund Complex has a bonus, pension, profit sharing or
retirement plan.
Board Members may elect to receive their Director's fees pursuant to a
deferred fee agreement with the Fund. Under the terms of the agreement, the Fund
accrues daily the amount of such Board Member's fee in installments which accrue
interest at a rate equivalent to the prevailing rate applicable to 90-day U.S.
Treasury Bills at the beginning of each calendar quarter or, pursuant to an
exemptive order of the Securities and Exchange Commission ("SEC"), at the daily
rate of return of the Fund. Payment of the interest so accrued is also deferred
and accruals become payable at the option of the Board Member. The Fund's
obligation to make payments of deferred Directors' fees, together with interest
thereon, is a general obligation of the Fund.
It is the intention of the persons named in the accompanying form of proxy
to vote for the election of Eugene C. Dorsey, Robert F. Gunia, Robert E.
LaBlanc, Douglas H. McCorkindale, Thomas T. Mooney, David Odenath, Stephen
Stoneburn, John R. Strangfeld, Jr. and Clay T. Whitehead. Messrs. Dorsey,
McCorkindale, Mooney and Strangfeld are currently Directors. The nominees for
independent Directors were selected by the Nominating Committee in August 1999
and the full Board approved all nominees for Board membership on the same date.
Each of the nominees has consented to be named in this proxy statement and to
serve as a Director if elected. Only Messrs. Dorsey, McCorkindale and Mooney
have previously been elected by shareholders (in October 1996). Mr. Strangfeld
was appointed by the Board of Directors in May 1999. Messrs. Gunia, LaBlanc,
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Odenath, Stoneburn and Whitehead were each nominated to serve as a Director in
August 1999.
The following table sets forth certain information concerning each of the
nominees and each Director of the Fund standing for reelection.
INFORMATION REGARDING DIRECTORS AND NOMINEES
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
EUGENE C. DORSEY (72), Retired President, Chief Director --------
Executive Officer and Trustee, Gannett Foundation
(now Freedom Forum) (1981-1989); former publisher,
four Gannett newspapers and Vice President of
Gannett Co. Inc. (1978-1981); past Chairman,
Independent Sector, Washington, D.C. (national
coalition of philanthropic organizations)
(1989-1992); former Chairman of the American
Council for the Arts; former Director, Advisory
Board of Chase Manhattan Bank of Rochester;
Director of The High Yield Plus Fund, Inc., First
Financial Fund, Inc., Prudential Diversified Bond
Fund, Inc., Prudential Government Income Fund,
Inc., Prudential High Yield Fund, Inc., Prudential
High Yield Total Return Fund, Inc., Prudential
National Municipals Fund, Inc., Prudential
Structured Maturity Fund, Inc.; Trustee, The
Target Portfolio Trust, Target Funds, Prudential
Municipal Bond Fund, Prudential Diversified Funds,
Prudential Government Securities Trust, Prudential
Municipal Series Fund and Prudential California
Municipal Fund.
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<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
*ROBERT F. GUNIA (52), Chief Administrative Officer Nominee for --------
(since March 1999) of Prudential Investments; Vice Director
President of Prudential (since September 1997);
Executive Vice President and Treasurer of PIFM
(since December 1996); formerly Senior Vice
President of Prudential Securities Incorporated
(from March 1997 to May 1999); formerly Chief
Administrative Officer (July 1990-September 1996),
Director (January 1989-September 1996) and
Executive Vice President, Treasurer and Chief
Financial Officer (June 1987-September 1996) of
Prudential Mutual Fund Management, Inc.; Vice
President and Director (since May 1989) of The Asia
Pacific Fund, Inc.; Director of The High Yield
Income Fund, Inc., Prudential Distressed Securities
Fund, Inc., Prudential Diversified Bond Fund, Inc.,
Prudential Emerging Growth Fund, Inc., Prudential
Equity Fund, Inc., Prudential Europe Growth Fund,
Inc., Prudential Global Genesis Fund, Inc.,
Prudential Global Limited Maturity Fund, Inc.,
Prudential Global Total Return Fund, Inc.,
Prudential Government Income Fund, Inc., Prudential
High Yield Fund, Inc., Prudential High Yield Total
Return Fund, Inc., Prudential Institutional
Liquidity Portfolio, Inc., Prudential Intermediate
Global Income Fund, Inc., Prudential International
Bond Fund, Inc., Prudential MoneyMart Assets, Inc.,
Prudential National Municipals Fund, Inc.,
Prudential Natural Resources Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Sector Funds,
Inc., Prudential Small-Cap Quantum Fund, Inc.,
Prudential Small Company Value Fund, Inc.,
Prudential Special Money Market Fund, Inc.,
Prudential Structured Maturity Fund, Inc.,
Prudential Tax-Free Money Fund, Inc., Prudential
World Fund, Inc. and The Prudential Investment
Portfolios, Inc.; Trustee of Cash Accumulation
Trust, Command Government Fund, Command Money Fund,
Command Tax-Free Fund, Prudential Balanced Fund,
Prudential California Municipal Fund, Prudential
Developing Markets Fund, Prudential Equity Income
Fund, Prudential Government Securities Trust,
Prudential Index Series Fund, Prudential Mid-Cap
Value Fund, Prudential Municipal Bond Fund,
Prudential Municipal Series Fund, Prudential Real
Estate Securities Fund, Prudential Tax-Managed
Equity Fund, Prudential 20/20 Focus Fund and Target
Funds.
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* Indicates "interested" Director, as defined by the 1940 Act, by reason of
his affiliation with Prudential or PIFM.
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<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
ROBERT E. LABLANC (65), President of Robert E. Nominee for --------
LaBlanc Associates, Inc. (telecommunications) since Director
1981; formerly General Partner at Salomon Brothers;
formerly Vice Chairman of Continental Telecom;
Director of Salient 3 Communications, Storage
Technology Corporation, Titan Corporation,
TIE/communications, Inc., The Tribune Company,
Chartered Semiconductor Manufacturing, Ltd.,
Prudential Europe Growth Fund, Inc., Prudential
Global Genesis Fund, Inc., Prudential Institutional
Liquidity Portfolio, Inc., Prudential MoneyMart
Assets, Inc., Prudential Natural Resources Fund,
Inc., Prudential Pacific Growth Fund, Inc.,
Prudential Special Money Market Fund, Inc.,
Prudential Tax-Free Money Fund, Inc. and Prudential
World Fund, Inc.; Trustee of Cash Accumulation
Trust, Command Government Fund, Command Money Fund,
Command Tax-Free Fund, Prudential Developing
Markets Fund, Target Funds and Manhattan College.
DOUGLAS H. MCCORKINDALE (60), Vice Chairman (since Director --------
March 1984) and President (since September 1997) of
Gannett Co., Inc.; Director of Continental
Airlines, Inc., Gannett Co., Inc., Frontier
Corporation, The High Yield Plus Fund, Inc., First
Financial Fund, Inc., Prudential Distressed
Securities Fund, Inc., Prudential Emerging Growth
Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Global Limited Maturity Fund, Inc.,
Prudential Intermediate Global Income Fund, Inc.,
Prudential International Bond Fund, Inc., The
Prudential Investment Portfolios, Inc., Prudential
Sector Funds, Inc., Prudential Small-Cap Quantum
Fund, Inc., Prudential Small Company Value Fund,
Inc., Prudential Global Total Return Fund, Inc.;
Trustee of Prudential 20/20 Focus Fund, Prudential
Balanced Fund, Prudential Diversified Funds,
Prudential Equity Income Fund, Prudential Index
Series Fund, Prudential Mid-Cap Value Fund,
Prudential Real Estate Securities Fund, Prudential
Tax-Managed Equity Fund, Target Funds and The
Target Portfolio Trust.
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<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
THOMAS T. MOONEY (58), President of the Greater Director 1,236 Class A
Rochester Metro Chamber of Commerce (since 1976); Shares
former Rochester City Manager (during 1973);
Trustee of Center for Governmental Research, Inc.;
Director of Blue Cross of Rochester, Executive
Service Corps of Rochester, Monroe County Water
Authority, Monroe County Industrial Development
Corporation, Northeast Midwest Institute,
Rochester Jobs, Inc., Prudential Distressed
Securities Fund, Inc., Prudential Diversified Bond
Fund, Inc., Prudential Emerging Growth Fund, Inc.,
Prudential Equity Fund, Inc., Prudential Global
Limited Maturity Fund, Inc., Prudential Government
Income Fund, Inc., Prudential High Yield Fund,
Inc., Prudential High Yield Total Return Fund,
Inc., Prudential Intermediate Global Income Fund,
Inc., Prudential International Bond Fund, Inc.,
The Prudential Investment Portfolios, Inc.,
Prudential National Municipals Fund, Inc.,
Prudential Sector Funds, Inc., Prudential
Small-Cap Quantum Fund, Inc., Prudential Small
Company Value Fund, Inc., Prudential Structured
Maturity Fund, Inc., Prudential Global Total
Return Fund, Inc., The High Yield Income Fund,
Inc.; President, Director and Treasurer of First
Financial Fund, Inc. and The High Yield Plus Fund,
Inc.; Trustee of Prudential 20/20 Focus Fund,
Prudential Balanced Fund, Prudential California
Municipal Fund, Prudential Diversified Funds,
Prudential Equity Income Fund, Prudential
Government Securities Trust, Prudential Index
Series Fund, Prudential Mid-Cap Value Fund,
Prudential Municipal Bond Fund, Prudential
Municipal Series Fund, Prudential Real Estate
Securities Fund, Prudential Tax-Managed Equity
Fund, Target Funds and The Target Portfolio Trust.
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<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
*DAVID R. ODENATH, Jr. (42), Officer in Charge, Nominee for --------
President, Chief Operating Officer (since June Director
1999), PIFM; Senior Vice President (since June
1999), The Prudential Insurance Company of America;
Senior Vice President (August 1993-May 1999),
PaineWebber Group, Inc.; Director of The High Yield
Income Fund, Inc., Prudential Distressed Securities
Fund, Inc., Prudential Diversified Bond Fund, Inc.,
Prudential Emerging Growth Fund, Inc., Prudential
Equity Fund, Inc., Prudential Europe Growth Fund,
Inc., Prudential Global Genesis Fund, Inc.,
Prudential Global Limited Maturity Fund, Inc.,
Prudential Global Total Return Fund, Inc.,
Prudential Government Income Fund, Inc., Prudential
High Yield Fund, Inc., Prudential High Yield Total
Return Fund, Inc., Prudential Institutional
Liquidity Portfolio, Inc., Prudential Intermediate
Global Income Fund, Inc., Prudential International
Bond Fund, Inc., Prudential MoneyMart Assets, Inc.,
Prudential National Municipals Fund, Inc.,
Prudential Natural Resources Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Sector Funds,
Inc., Prudential Small-Cap Quantum Fund, Inc.,
Prudential Small Company Value Fund, Inc.,
Prudential Special Money Market Fund, Inc.,
Prudential Structured Maturity Fund, Inc.,
Prudential Tax-Free Money Fund, Inc., Prudential
World Fund, Inc. and The Prudential Investment
Portfolios, Inc.; Trustee of Cash Accumulation
Trust, Command Government Fund, Command Money Fund,
Command Tax-Free Fund, Prudential Balanced Fund,
Prudential California Municipal Fund, Prudential
Developing Markets Fund, Prudential Equity Income
Fund, Prudential Government Securities Trust,
Prudential Index Series Fund, Prudential Mid-Cap
Value Fund, Prudential Municipal Bond Fund,
Prudential Municipal Series Fund, Prudential Real
Estate Securities Fund, Prudential Tax-Managed
Equity Fund, Prudential 20/20 Focus Fund and Target
Funds.
- ------------------------------
* Indicates "interested" Director, as defined by the 1940 Act, by reason of
his affiliation with Prudential or PIFM.
-9-
<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
STEPHEN STONEBURN (56), President and Chief Nominee for --------
Executive Officer, Quadrant Media Corp. Director
(publishing) (since June 1996); formerly President,
Argus Integrated Media, Inc. (June 1995-June 1996);
formerly Senior Vice President and Managing
Director, Cowles Business Media (January
1993-1995); prior thereto, Senior Vice President
(January 1991-1992) 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 Europe Growth Fund,
Inc., Prudential Global Genesis Fund, Inc.,
Prudential Institutional Liquidity Portfolio, Inc.,
Prudential MoneyMart Assets, Inc., Prudential
Natural Resources Fund, Inc., Prudential Pacific
Growth Fund, Inc., Prudential Special Money Market
Fund, Inc., Prudential Tax-Free Money Fund, Inc.
and Prudential World Fund, Inc.; Trustee of Cash
Accumulation Trust, Command Government Fund,
Command Money Fund, Command Tax-Free Fund,
Prudential Developing Markets Fund and Target
Funds.
-10-
<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
*JOHN R. STRANGFELD, JR. (45), Chief Executive President --------
Officer, Chairman, President and Director of The and Director
Prudential Investment Corporation (since January
1990), Executive Vice President of Prudential
Global Asset Management Group of Prudential (since
February 1998) and Chairman of Pricoa Capital Group
(since August 1989); formerly Chief Executive
Officer of the Private Asset Management Group of
Prudential (November 1994 - December 1998);
President and Director of Prudential Distressed
Securities Fund, Inc., Prudential Diversified Bond
Fund, Inc., Prudential Emerging Growth Fund, Inc.,
Prudential Equity Fund, Inc., Prudential Europe
Growth Fund, Inc., Prudential Global Genesis Fund,
Inc., Prudential Global Limited Maturity Fund,
Inc., Prudential Global Total Return Fund, Inc.,
Prudential Government Income Fund, Inc., Prudential
High Yield Fund, Inc., Prudential High Yield Total
Return Fund, Inc., Prudential Institutional
Liquidity Portfolio, Inc., Prudential Intermediate
Global Income Fund, Inc., Prudential International
Bond Fund, Inc., Prudential MoneyMart Assets, Inc.,
Prudential National Municipals Fund, Inc.,
Prudential Natural Resources Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Sector Funds,
Inc., Prudential Small-Cap Quantum Fund, Inc.,
Prudential Small Company Value Fund, Inc.,
Prudential Special Money Market Fund, Inc.,
Prudential Structured Maturity Fund, Inc.,
Prudential Tax-Free Money Fund, Inc., Prudential
World Fund, Inc., The High Yield Income Fund, Inc.
and The Prudential Investment Portfolios, Inc.;
President and Trustee of Cash Accumulation Trust,
Command Government Fund, Command Money Fund,
Command Tax-Free Fund, Prudential Balanced Fund,
Prudential California Municipal Fund, Prudential
Developing Markets Fund, Prudential Diversified
Funds, Prudential Equity Income Fund, Prudential
Government Securities Trust, Prudential Index
Series Fund, Prudential Mid-Cap Value Fund,
Prudential Municipal Bond Fund, Prudential
Municipal Series Fund, Prudential Real Estate
Securities Fund, Prudential Tax-Managed Equity
Fund, Prudential 20/20 Focus Fund, Target Funds and
The Target Portfolio Trust.
- ------------------------------
* Indicates "interested" Trustee, as defined by the 1940 Act, by reason of
his affiliation with Prudential or PIFM.
-11-
<PAGE>
Shares of
Common Stock
Name, age, business experience during the Position Owned at
past five years and other directorships With Fund October 1, 1999
--------------------------------------- --------- ---------------
CLAY T. WHITEHEAD (60), President of National Nominee for --------
Exchange Inc. (new business development firm) Director
(since May 1983); Director of Prudential Distressed
Securities Fund, Inc., Prudential Emerging Growth
Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Europe Growth Fund, Inc., Prudential
Global Genesis Fund, Inc., Prudential Global
Limited Maturity Fund, Inc., Prudential Global
Total Return Fund, Inc., Prudential Institutional
Liquidity Portfolio, Inc., Prudential Intermediate
Global Income Fund, Inc., Prudential International
Bond Fund, Inc., Prudential MoneyMart Assets, Inc.,
Prudential Natural Resources Fund, Inc., Prudential
Pacific Growth Fund, Inc., Prudential Sector Funds,
Inc., Prudential Small-Cap Quantum Fund, Inc.,
Prudential Small Company Value Fund, Inc.,
Prudential Special Money Market Fund, Inc.,
Prudential Tax-Free Money Fund, Inc., Prudential
World Fund, Inc. and The Prudential Investment
Portfolios, Inc.; Trustee of Cash Accumulation
Trust, Command Government Fund, Command Money Fund,
Command Tax-Free Fund, Prudential Balanced Fund,
Prudential Developing Markets Fund, Prudential
Equity Income Fund, Prudential Index Series Fund,
Prudential Mid-Cap Value Fund, Prudential Real
Estate Securities Fund, Prudential Tax-Managed
Equity Fund, Prudential 20/20 Focus Fund and Target
Funds.
The Fund has a Nominating Committee and an Audit Committee, the members of
both of which are the independent Board Members. The Audit Committee makes
recommendations to the 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 Nominating Committee makes recommendations to the
Board with respect to candidates for election as Board Members. The Nominating
Committee does not consider nominees recommended by shareholders to fill
vacancies on the Board.
There were four meetings of the Fund's Board of Directors held during the
fiscal year ended September 30, 1999. The members of the Audit and Nominating
Committees are Messrs. Dorsey, McCorkindale and Mooney. The Audit Committee met
two times during the fiscal year ended September 30, 1999. The Nominating
Committee met two times during the fiscal year ended September 30, 1999. No
Director attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors, the Audit Committee and the Nominating
Committee held during the 1999 fiscal year.
The executive officers of the Fund are listed in Appendix A. They are
elected annually by the Board of Directors.
-12-
<PAGE>
REQUIRED VOTE
The nominees receiving the affirmative vote of a plurality of the votes
cast will be elected Directors, provided a quorum is present. One-third of the
Fund's outstanding shares constitutes a quorum for the transaction of business.
THE BOARD OF DIRECTORS, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL NO.
1.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Board of Directors, including Directors who are not interested persons
of the Fund, has selected PricewaterhouseCoopers LLP as independent accountants
of the Fund for the fiscal year ending September 30, 2000. 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 as proxies in the accompanying
Proxy will vote for PricewaterhouseCoopers LLP. No representative of
PricewaterhouseCoopers LLP is expected to be present at the Meeting but a
representative will be available to answer any questions or make any statements
should any matter arise requiring their presence. PricewaterhouseCoopers LLP has
informed the Fund that they have no material direct or indirect financial
interest in the Fund.
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
Approval of Proposal No. 2 requires a vote of a majority of the votes
cast with respect to Proposal No. 2 at the Meeting, provided a quorum is
present.
THE BOARD OF DIRECTORS, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS PROPOSAL NO. 2.
-13-
<PAGE>
APPROVAL OF CHANGES TO CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF THE FUND
(PROPOSAL NO. 3)
Changes are proposed to the fundamental investment restrictions
("fundamental restrictions") of the Fund. Pursuant to the 1940 Act, the Fund has
adopted certain fundamental restrictions, which may be changed only with
shareholder approval. Investment policies and other restrictions that the Fund
has not specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Fund's Board of Directors without
shareholder approval. Thus, fundamental restrictions that become non-fundamental
can thereafter be amended by the Board without a vote of shareholders.
Several of the current fundamental restrictions of the Fund reflect
regulatory, business or industry conditions, practices or requirements that are
no longer in effect. These restrictions have been in effect, in most cases,
since the Fund was organized in 1989. Accordingly, the Board now has approved
revisions to the Fund's fundamental restrictions in order to simplify, modernize
and make more uniform those restrictions that are required to be fundamental.
The Board believes that by reducing to a minimum those restrictions that
can be changed only by shareholder vote, the Fund will be able to avoid the
costs and delays associated with a shareholder meeting if the Board decides to
make future changes to its investment policies. Although the proposed changes in
fundamental restrictions will allow the Fund greater investment flexibility to
respond to future investment opportunities, the Board does not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
the Fund or the manner in which the Fund is managed. Most importantly, the
Fund's investment objective to provide total return, without undue risk, by
investing primarily in income-producing securities of domestic and foreign
companies in the utility industries, will be unchanged.
PROPOSED CHANGES. The following is the text of the proposed restrictions,
marked to show changes to the current restrictions, and a summary description of
the proposed changes to the Fund's fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection
with the elimination of certain of the Fund's current fundamental restrictions.
The text below also describes those fundamental restrictions that are being
eliminated for which no corresponding non-fundamental restrictions are being
proposed. Proposed deletions are stricken; proposed new text is bold and
underlined. Shareholders should note that certain of the fundamental
restrictions that are treated separately below currently are combined within a
single existing fundamental restriction.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION
PROPOSED CHANGE: Upon approval of Proposal 3A, the existing fundamental
restriction on portfolio diversification would be modified as follows:
-14-
<PAGE>
"The Fund is a "diversified company" as defined in the 1940 Act. The Fund may
not purchase the securities of any issuer if, as a result, the Fund would fail
to be a diversified company within the meaning of the 1940 Act, and the rules
and regulations promulgated thereunder, as such statute, rules, and regulations
are amended from time to time or are interpreted from time to time by the SEC
staff (collectively, the "1940 Act Laws and Interpretations") or to the extent
that the Fund may be permitted to do so by exemptive order or similar relief
(collectively, with the 1940 Act Laws and Interpretations, the "1940 Act Laws,
Interpretations and Exemptions")."
DISCUSSION: The Fund's current fundamental restriction on portfolio
diversification lists the percentage standards set forth in the 1940 Act for a
diversified fund. In order to qualify as a diversified investment company under
the 1940 Act, the Fund may not purchase securities of any one issuer if, as a
result, more than 5% of the Fund's total assets would be invested in securities
of that issuer or the Fund would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the Fund's total
assets may be invested without regard to this limitation. This limitation does
not apply to securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or to securities issued by other investment
companies. The proposed restriction adopts the same 1940 Act standards. However,
by not listing the percentage limitations, the proposed restriction would change
automatically if the 1940 Act Laws, Interpretations and Exemptions change.
B. MODIFICATION AND RECLASSIFICATION OF FUNDAMENTAL RESTRICTION ON MARGIN
TRANSACTIONS
PROPOSED CHANGE: Upon approval of Proposal 3B, the existing fundamental
restriction on engaging in margin transactions would be eliminated and the Fund
would become subject to the following non-fundamental restriction:
"The Fund will not purchase securities on margin, provided that the fund may
obtain short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that the Fund may make margin deposits
in connection with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other futures contracts or derivative
instruments."
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to margin transactions. To maximize the Fund's flexibility in this area,
the Board believes that the existing fundamental restriction on margin
transactions should be replaced with a non-fundamental restriction. The proposed
non-fundamental restriction eliminates any possible confusion over the Fund's
ability to use forward and spot currency contracts, swap transactions and other
financial contracts or derivative instruments, as the Fund intends to do from
time to time.
-15-
<PAGE>
C. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES OF COMPANIES
WITH LESS THAN THREE YEARS OF CONTINUOUS OPERATIONS
PROPOSED CHANGE: Upon approval of Proposal 3C, the existing fundamental
restriction on purchasing the securities of companies having a record of less
than three years of continuous operations would be eliminated.
DISCUSSION: This fundamental restriction is based on blue sky regulations by
state securities commissions that are no longer applicable to the Fund.
Elimination of this restriction, which currently prohibits the Fund from
investing more than 5% of its total assets in securities of companies with less
than three years of continuous operations, would provide the Fund with greater
flexibility with respect to investment opportunities in startup companies and
emerging markets. Investments in startup companies and companies with less than
three years of continuous operations may be riskier than investments in more
established companies. It is not currently expected that this change would
materially affect the Fund.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUING SENIOR SECURITIES AND
BORROWING MONEY
PROPOSED CHANGE: Upon approval of Proposal 3D, the existing fundamental
restriction on issuing senior securities would be modified as follows:
"The Fund may not issue senior securities or borrow money, except as permitted
by the 1940 Act Laws, Interpretations and Exemptions."
DISCUSSION: The proposed changes would make the Fund's fundamental restriction
on issuing senior securities or borrowing money no more limiting than required
by the 1940 Act. Generally, under the 1940 Act, funds may borrow money in an
amount not exceeding 33-1/3% of fund total assets (including the amounts
borrowed). The Board believes that changing the Fund's fundamental restrictions
in this manner will provide flexibility for future contingencies. However, the
Board does not currently intend to change the Fund's operations, under which the
Fund does not borrow or use leverage for investment purposes.
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES
PROPOSED CHANGE: Upon approval of Proposal 3E, the existing fundamental
restriction on investing in commodities for the Fund would be modified as
follows:
-16-
<PAGE>
"The Fund may not purchase or sell physical commodities, but the Fund may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments."
DISCUSSION: The proposed changes to this fundamental restriction are intended to
ensure that the Fund will have the maximum flexibility to enter into hedging and
speculative transactions utilizing financial contracts and derivative products
when doing so is permitted by the Fund's other investment policies. Thus, the
proposed restriction would allow the Fund to respond to the rapid and continuing
development of derivative products. The proposed restriction broadens the
exception to the prohibition on buying and selling physical commodities to
include all financial derivative instruments rather than only financial futures
and currency instruments. The Fund, and thus shareholders, may lose money
through any unsuccessful use of these strategies. However, the Fund currently
engages in hedging and other portfolio strategies such as the use of derivatives
to reduce certain risks of its investments and to attempt to enhance return. The
Fund would continue this policy with respect to the transactions authorized by
the proposed changes to this fundamental restriction. In addition, it is
expected that any proposed changed policy would not materially affect Fund
operations.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS
PROPOSED CHANGE: If Proposal 3E is approved, the existing fundamental
restriction on real estate investments for the Fund would be removed from the
Fund's proposed fundamental restriction on investing in commodities, discussed
above, and would be modified as a separate fundamental restriction to read as
follows:
"The Fund may not purchase or sell real estate, except that investments in
securities of issuers that invest in real estate and investments in
mortgage-backed securities, mortgage participations or other instruments
supported by interests in real estate are not subject to this limitation, and
except that the Fund may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
DISCUSSION: The proposed changes to this fundamental restriction would provide
more detail regarding the types of real estate-related securities that are
permissible investments for the Fund, such as mortgage participations, and would
permit the Fund to exercise rights under agreements relating to real
estate-related securities. In addition, the proposed restriction includes an
exception that permits the Fund to hold real estate acquired as a result of
ownership of securities or other interests. Acquisition of real estate would
subject the Fund to risks associated with real estate, such as liquidity risks,
environmental risks and changes in tax and regulatory requirements. It is
expected that the proposed changed policy would not materially affect Fund
operations.
G. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES ISSUED BY
OTHER INVESTMENT COMPANIES
PROPOSED CHANGE: Upon approval of Proposal 3G, the existing fundamental
restriction on purchasing securities issued by other investment companies, which
prohibits the Fund from investing in securities of other investment companies,
except in certain instances, would be eliminated.
-17-
<PAGE>
DISCUSSION: There is no legal requirement that the Fund have a fundamental
restriction on this subject. This change would offer the Fund the ability to use
alternative investment structures, although the Board does not currently intend
to materially change the structure of the Fund. In addition, the ability of the
Fund to invest in other investment companies already is subject to certain
percentage limitations in the 1940 Act. In general, a fund may not invest more
than 10% of its assets in shares of other funds, more than 5% of its assets in
the shares of a single fund, or acquire more than 3% of the outstanding voting
stock of another fund.
H. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION
PROPOSED CHANGE: Upon approval of Proposal 3H, the existing fundamental
restriction on concentration would be modified as follows:
"The Fund may not purchase any security if, as a result thereof, 25% or more of
its total assets would be invested in the securities of issuers having their
principal business activities in the same industry, other than the utility
industries, except for temporary emergency purposes, and except that this
limitation does not apply to securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities."
DISCUSSION: The proposed changes to the Fund's fundamental restriction on
concentration would make minor changes in wording from the existing fundamental
restriction. Under normal circumstances, at least 65% of the Fund's total assets
will be invested in the securities of companies primarily engaged in the
ownership or operation of facilities used in the generation, transmission or
distribution of electricity, telecommunications, gas or water. It is expected
that the proposed changed policy would not materially affect Fund operations.
I. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS
PROPOSED CHANGE: Upon approval of Proposal 3I, the existing fundamental
restriction on making loans for the Fund would be modified as follows:
"The Fund may not make loans, except through loans of assets of the Fund or
through repurchase agreements, provided that for purposes of this restriction,
the acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances or
similar instruments will not be considered the making of a "loan.""
DISCUSSION: The proposed changes to this fundamental restriction would more
completely describe various debt instruments the Fund may purchase that do not
constitute the making of a loan and would permit the Fund to lend Fund assets.
However, it is expected that the proposed changed policy would not materially
affect Fund operations.
-18-
<PAGE>
J. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES
PROPOSED CHANGE: Upon approval of Proposal 3J, the Fund's existing fundamental
restriction on underwriting securities would be modified as follows:
"The Fund may not act as an underwriter except to the extent that, in connection
with the disposition of portfolio securities, the Fund may be deemed to be an
underwriter under certain federal securities laws."
DISCUSSION: The proposed changes to this fundamental restriction would make
minor changes in wording from the existing fundamental restriction on
underwriting securities. It is expected that the proposed changed policy would
not materially affect Fund operations.
K. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SELLING SECURITIES SHORT
PROPOSED CHANGE: Upon approval of Proposal 3K, the Fund's existing fundamental
restriction on selling securities short under certain circumstances would be
eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to short sales of securities. A short sale of a security is a
transaction in which a fund sells a security it does not own in anticipation of
a decline in the market value of that security. To maximize the Fund's
flexibility in this area, the Board believes that the Fund's restriction on
short sales of securities, which prohibits the Fund from selling securities
short or maintaining a short position, except in connection with the use of
options, futures contracts, options thereon and forward currency contracts,
should be eliminated. Although the Fund will not become subject to a comparable
non-fundamental restriction, the Fund does not currently intend to engage in
short sales of securities.
L. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING FOR THE PURPOSE OF
EXERCISING CONTROL
PROPOSED CHANGE: Upon approval of Proposal 3L, the Fund's existing fundamental
restriction on investing for the purpose of exercising control for the Fund
would be eliminated.
DISCUSSION: The Board proposes to eliminate this fundamental restriction, which
prohibits the Fund from investing in companies for the purpose of exercising
control or management. Elimination of this restriction would clarify the Fund's
ability to exercise freely its normal rights as a shareholder of the companies
in which it invests. Although the Fund will not become subject to a comparable
non-fundamental restriction, the Fund does not currently intend to become
involved in directing or administering the day-to-day operations of any company.
* * * *
REQUIRED VOTE: Approval of each of the changes contemplated by Proposal 3
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose means the affirmative vote of
the lesser of (1) more than 50% of the outstanding voting shares of the Fund or
(2) 67% or more of the voting shares of the Fund present at the Meeting if more
than 50% of the outstanding voting shares of the Fund are represented at the
Meeting in person or by proxy.
-19-
<PAGE>
Any proposed changes that are approved by the shareholders of the Fund at
the Meeting will be effective on the Fund's next business day.
IF ONE OR MORE OF THE CHANGES CONTEMPLATED BY PROPOSAL 3 ARE NOT APPROVED
BY SHAREHOLDERS, THE RELATED EXISTING FUNDAMENTAL RESTRICTION(S) OF THE FUND
WILL CONTINUE IN EFFECT.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH
PORTION OF PROPOSAL 3.
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 as
proxies in the enclosed Proxy will vote thereon according to their best judgment
in the interests of the Fund.
SHAREHOLDER PROPOSALS
A shareholder's proposal intended to be presented at any subsequent
meeting of shareholders of the Fund must be received by the Fund a reasonable
time before the Board of Directors makes the solicitation relating to such
meeting, in order to be included in the Fund's Proxy Statement and form of proxy
relating to such meeting. Shareholder proposals that are submitted in a timely
manner will not necessarily be included in the Fund's proxy materials. Inclusion
of such proposals is subject to limitations under the federal securities laws.
The Fund is not required to hold annual meetings of shareholders if the
election of Board Members is not required under the 1940 Act. It is the present
intention of the Board not to hold annual meetings of shareholders unless such
shareholder action is required.
DAVID F. CONNOR
Secretary
Dated: October 8, 1999
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH
TO HAVE THEIR SHARES VOTED ARE REQUESTED TO MARK, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
-20-
<PAGE>
APPENDIX A
OFFICER INFORMATION
<TABLE>
<CAPTION>
NAME (AGE) OFFICE WITH THE PRINCIPAL OCCUPATIONS
---------- --------------- ---------------------
CORPORATION
-----------
<S> <C> <C>
John R. Strangfeld, Jr. (45) Director and President See p. 11 of Proxy Statement
since May 1999
Robert F. Gunia (52) Vice President since See p. 6 of Proxy Statement
February 1991;
nominee for Director
David F. Connor (35) Secretary since Assistant General Counsel (since March 1998)
November 1998 of PIFM; Associate Attorney, Drinker Biddle &
Reath LLP prior thereto.
Grace C. Torres (40) Treasurer and First Vice President (since December 1996) of
Principal Financial PIFM; First Vice President (since March 1993)
and Accounting of Prudential Securities Incorporated;
Officer since formerly First Vice President (March
May 1995 1994-September 1996) of Prudential Mutual
Fund Management, Inc.
Stephen M. Ungerman (46) Assistant Treasurer Tax Director (since March 1996) of Prudential
since May 1995 Investments; formerly First Vice President
(February 1993-September 1996) of Prudential
Mutual Fund Management, Inc.
</TABLE>
-21-
<PAGE>
GLOBAL UTILITY FUND, INC.
PRUDENTIAL INVESTMENTS
GATEWAY CENTER THREE
100 MULBERRY STREET, 9TH FLOOR
NEWARK, NJ 07102-4077
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking previous proxies, hereby appoint(s) David F.
Connor, Grace C. Torres and Stephen M. Ungerman, or any one or more of them,
with full power of substitution, to vote all shares of the Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at Prudential Plaza, 751 Broad Street, 24th Floor, Newark, New
Jersey 07102 on November 8, 1999 at 10:00 a.m. Eastern time and at any
adjournments thereof. All powers may be exercised by a majority of said proxy
holders or substitutes voting or acting or, if only one votes and acts, then by
that one. This Proxy shall be voted on the proposals described in the Proxy
Statement as specified below. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee, attorney,
guardian, etc., please indicate this. Corporate and partnership proxies should
be signed by an authorized person indicating the person's title.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
You may also vote your shares by touchtone phone by calling 1-800-690-6903 or
through the Internet at www.proxyvote.com
Please refer to the enclosed Proxy Statement for a complete discussion of this
matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR EACH OF THE
PROPOSALS
As to any other matter, said proxy holders shall vote in accordance with their
best judgment.
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE THE EXPENSE OF ADDITIONAL MAILINGS.
SHARES
CONTROL NUMBER
ACCOUNT NUMBER
________________________________________________________________________________
<PAGE>
(perforation)
________________________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
GLOBAL UTILITY FUND, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:
ELECTION OF DIRECTORS
1. Nominees: /__/ For /__/ Withhold /__ / For All
All All Except
01) Eugene C. Dorsey
02) Robert F. Gunia
03) Robert E. LaBlanc
04) Douglas H. McCorkindale
05) Thomas T. Mooney
06) David R. Odenath, Jr.
07) Stephen Stoneburn
08) John R. Strangfeld, Jr.
09) Clay T. Whitehead
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
__________________________
VOTE ON PROPOSALS
(PLACE "X" ONLY IN ONE BOX)
2. To ratify the For Against Abstain
selection of /__/ /__/ /__/
PricewaterhouseCoopers
LLP as independent
public accountants for
the fiscal year ending
September 30, 2000.
3(a). To modify the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
portfolio
diversification.
<PAGE>
3(b). To modify and For Against Abstain
reclassify the /__/ /__/ /__/
fundamental
restriction on margin
transactions.
3(c). To eliminate the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
purchasing securities
of companies with less
than three years of
continuous operations.
3(d). To modify the For Against Abstain
fundamental /__/ /__/ /__/
restriction on issuing
senior securities and
borrowing money.
3(e). To modify the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
investing in
commodities. A vote
"for" this proposed
change to the Fund's
fundamental restrictions
would also have the
effect of a vote "for"
the proposed modification
of the Fund's fundamental
restriction on real
estate investments.
3(g). To eliminate the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
purchasing securities
issued by other
investment companies.
3(h). To modify the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
concentration.
<PAGE>
3(i). To modify the For Against Abstain
fundamental /__/ /__/ /__/
restriction on making
loans.
3(j). To modify the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
underwriting
securities.
3(k). To eliminate the For Against Abstain
fundamental /__/ /__/ /__/
restriction on selling
securities short.
3(l). To eliminate the For Against Abstain
fundamental /__/ /__/ /__/
restriction on
investing for the
purpose of exercising
control.
4. To transact such other For Against Abstain
business as may /__/ /__/ /__/
properly come before
the meeting and any
adjournments thereof.
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Signature (PLEASE SIGN WITHIN BOX) Date
- -------------------------------------- -----
Signature (Joint Owners) Date
