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SCHEDULE 14C INFORMATION
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ ] Definitive Information Statement
The Target Portfolio Trust
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-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 of Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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THE TARGET PORTFOLIO TRUST(SM)
SMALL CAPITALIZATION GROWTH PORTFOLIO
LARGE CAPITALIZATION GROWTH PORTFOLIO
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
------------------------
INFORMATION STATEMENT
AUGUST 20, 1999
------------------------
TO THE SHAREHOLDERS:
On May 26, 1999, at a regular meeting of the Board of Trustees of The
Target Portfolio Trust(SM) (the Trust), the Trustees approved a new subadvisory
agreement for the Small Capitalization Growth Portfolio (the Small Cap
Portfolio). The subadvisory agreement approved by the Board of Trustees was
entered into between Prudential Investments Fund Management LLC (PIFM), the
Trust's Manager, and Sawgrass Asset Management LLC (Sawgrass). Sawgrass assumed
investment advisory responsibility for the Small Cap Portfolio on May 27, 1999.
On August 3, 1999, at a special meeting of the Board of Trustees of the
Trust, the Trustees approved a new subadvisory agreement for the Large
Capitalization Growth Portfolio (the Large Cap Portfolio and, collectively with
the Small Cap Portfolio, the Portfolios). The subadvisory agreement approved by
the Board of Trustees was entered into between PIFM and Columbus Circle
Investors (CCI).
This information statement informs you of the circumstances surrounding the
Board's approval of the new subadvisory agreements for the Portfolios and
provides you with an overview of their terms.
By order of the Board
DAVID F. CONNOR
Secretary
THIS IS NOT A PROXY STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
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THE TARGET PORTFOLIO TRUST(SM)
SMALL CAPITALIZATION GROWTH PORTFOLIO
LARGE CAPITALIZATION GROWTH PORTFOLIO
(800) 225-1852
------------------------
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
------------------------
INFORMATION STATEMENT
AUGUST , 1999
------------------------
This information statement is being furnished to the shareholders of the
Small Capitalization Growth Portfolio (the Small Cap Portfolio) and the Large
Capitalization Growth Portfolio (the Large Cap Portfolio and, collectively with
the Small Cap Portfolio, the Portfolios) of The Target Portfolio Trust(SM) (the
Trust) in lieu of a proxy statement, pursuant to the terms of an exemptive order
the Trust received from the Securities and Exchange Commission (SEC). The
exemptive order permits the Trust's manager to hire new subadvisers and to make
certain changes to existing subadvisory contracts with the approval of the Board
of Trustees, without obtaining shareholder approval.
The Trust is a registered, management investment company under the
Investment Company Act of 1940, as amended (the Investment Company Act) and is
organized as a Delaware business trust. The Trust's trustees are referred to
here as the "Board," "Board Members" or "Trustees." The Trust's principal
executive office is Gateway Center Three, 100 Mulberry Street, Newark, New
Jersey 07102-4077.
We are providing shareholders of the Portfolios as of August 6, 1999 with
this information statement, which will be mailed on or about August 23, 1999.
SMALL CAP PORTFOLIO. This information statement relates to the approval by
the Trustees of a new subadvisory agreement dated as of May 26, 1999 (the
Sawgrass Agreement) between the Trust's Manager and Sawgrass Asset Management
LLC (Sawgrass). Sawgrass assumed its advisory duties with respect to the
Portfolio on May 27, 1999. The Trustees approved the Sawgrass Agreement, a copy
of which is attached as Exhibit A, on May 26, 1999. The material terms of the
Sawgrass Agreement are substantially the same as those of the previous
subadvisory agreement. The previous subadvisory agreement, dated November 9,
1992, between the Trust's Manager and Nicholas-Applegate Capital Management
(Nicholas-Applegate) was last approved by the Trustees, including a majority of
the Trustees who were not parties to the contract and were not interested
persons of those parties (as defined in the Investment Company Act), on May 12,
1998.
The Small Cap Portfolio will pay for the costs associated with preparing
and distributing this information statement to the shareholders of the Small Cap
Portfolio.
LARGE CAP PORTFOLIO. This information statement also relates to the
approval by the Trustees of a new subadvisory agreement dated as of August 3,
1999 (the CCI Agreement and, collectively with the Sawgrass Agreement, the
Subadvisory Agreements) between the Trust's Manager and Columbus Circle
Investors (CCI). The Trustees approved the CCI Agreement, a copy of which is
attached as Exhibit B, on August 3, 1999. CCI had previously served as a
subadviser to the Large Cap Portfolio under a subadvisory agreement with the
Manager dated January 2, 1995 that terminated on June 30, 1999 as a result of a
change in the ownership of CCI. The previous subadvisory agreement was last
approved by the Trustees, including a majority of the Trustees who were not
parties to the contract and were not interested persons of those parties (as
defined in the Investment Company Act), on May 26, 1999.
CCI will pay for the costs associated with preparing and distributing this
information statement to the shareholders of the Large Cap Portfolio.
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THE TARGET PROGRAM
The Trust consists of ten separate investment portfolios, including the
Portfolios. Shares of the Trust's portfolios are offered to participants in the
Prudential Securities Target Program (the Target Program), an investment
advisory service that provides to investors asset allocation recommendations
with respect to the portfolios based on an evaluation of an investor's
investment objectives and risk tolerances. The Target Program or shares of the
Trust (without participation in the Target Program) are also available to banks,
trust companies and other investment advisory services which maintain securities
accounts with Prudential Securities Incorporated (Prudential Securities) and to
certain fee based programs sponsored by Prudential Securities and its affiliates
which include mutual funds as investment options and for which the portfolios
are an available option without payment of the Target Program fee. Participation
in the Target Program is subject to payment of a program fee that is separate
from the portfolios' management fees. For all accounts other than Individual
Retirement Accounts (IRAs) and qualified employee benefit plans (collectively,
Plans), the quarterly advisory fee is charged at a maximum annual rate of 1.5%
of assets invested in equity portfolios, such as the Large Cap and Small Cap
Portfolios. For Plan accounts, the quarterly advisory fee is charged at the
maximum annual rate of 1.25% of assets invested in equity portfolios.
THE MANAGER
Prudential Investments Fund Management LLC (PIFM or the Manager), Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, serves as the
Trust's Manager under a management agreement (the Management Agreement) dated as
of November 9, 1992. PIFM is a subsidiary of Prudential Securities Incorporated
and The Prudential Insurance Company of America (Prudential). As of August ,
1999, PIFM served as the Manager to open-end investment companies and as
Manager or administrator to closed-end investment companies with aggregate
assets of approximately $ billion. Information concerning the Trust's
current management arrangements can be found in Exhibit C. Information
concerning officers of the Trust is set forth in Exhibit D.
SHAREHOLDER REPORTS
The Trust's most recent annual report for the fiscal year ended December
31, 1998 has previously been sent to shareholders and may be obtained without
charge by writing the Trust at Gateway Center Three, 100 Mulberry Street,
Newark, New Jersey 07102-4077 or by calling (800) 225-1852 (toll free).
SHAREHOLDINGS
LARGE CAP PORTFOLIO. As of August 6, 1999, the Large Cap Portfolio's net
asset value was approximately $ . As of August 6, 1999, there were
outstanding shares of the Large Cap Portfolio. Management does not
know of any person who owned beneficially 5% or more of the shares of the Large
Cap Portfolio as of August 6, 1999. In addition, to the knowledge of management,
the executive officers and Board Members of the Trust, as a group, owned less
than 1% of the outstanding shares of the Large Cap Portfolio as of that date.
SMALL CAP PORTFOLIO. As of August 6, 1999, the Small Cap Portfolio's net
asset value was approximately $ . As of August 6, 1999, there were
outstanding shares of the Small Cap Portfolio. Management does not
know of any person who owned beneficially 5% or more of the shares of the Small
Cap Portfolio as of August 6, 1999. In addition, to the knowledge of management,
the executive officers and Board Members of the Trust, as a group, owned less
than 1% of the outstanding shares of the Small Cap Portfolio as of that date.
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NEW SUBADVISORY AGREEMENTS
SMALL CAP PORTFOLIO
On May 26, 1999, the Trustees, including a majority of the Trustees who are
not parties to the Sawgrass Agreement or interested persons of such parties (as
defined in the Investment Company Act) (the non-interested Trustees),
unanimously approved the Sawgrass Agreement and the selection by PIFM of
Sawgrass to replace Nicholas-Applegate as a subadviser to the Small Cap
Portfolio. At that time, the Trustees also unanimously approved termination of
the previous subadvisory agreement between the Trust's Manager and
Nicholas-Applegate for performance-related reasons. Sawgrass was recommended to
the Trustees by PIFM as a replacement for Nicholas-Applegate.
The Sawgrass Agreement contains terms and conditions similar to those of
the subadvisory agreement with Nicholas-Applegate. See "Terms of Subadvisory
Agreements," below. Sawgrass renders investment advice to a portion of the Small
Cap Portfolio in accordance with its investment objective and policies and also
makes investment decisions to purchase and sell securities on behalf of the
Small Cap Portfolio, subject to the supervision of PIFM.
Section 15 of the Investment Company Act requires that a majority of the
Small Cap Portfolio's outstanding voting securities approve the Sawgrass
Agreement. However, on September 11, 1996, the SEC issued an order granting the
Trust and PIFM exemptive relief from the requirements of Section 15. According
to the SEC's order, which is subject to a number of conditions (including
approval by the Trust's shareholders, which was received on October 30, 1996),
PIFM may enter into certain subadvisory agreements on behalf of the Trust
without receiving prior shareholder approval. Thus, the execution and
implementation of the Sawgrass Agreement did not require shareholder consent.
BOARD CONSIDERATION OF THE SAWGRASS AGREEMENT. At a regular meeting of the
Board, at which all of the Trustees were in attendance, the Board of Trustees
considered and unanimously approved the Sawgrass Agreement on May 26, 1999. In
considering the approval of the Sawgrass Agreement, the Trustees, including the
non-interested Trustees, considered whether approval of the Sawgrass Agreement
was in the best interests of the Trust and shareholders of the Small Cap
Portfolio. At the meeting, the Trust's Manager stressed the investment
experience, reputation, and the performance record of the investment team at
Sawgrass. The Trustees reviewed materials furnished by management and Sawgrass
and met with representatives of Sawgrass. Among other things, the Trustees
considered the investment philosophy and style of Sawgrass, its relative
performance record, its security selection experience and preferences,
personnel, facilities, financial strength and quality of service. The Board also
considered the nature, quality and extent of services expected to be provided to
the Small Cap Portfolio by Sawgrass as well as the reputation of the Sawgrass
investment team in the asset management industry.
The Trustees discussed and reviewed the terms of the Sawgrass Agreement. It
was noted that the material terms of the Sawgrass Agreement were substantially
the same as those in the prior subadvisory agreement. There were a number of
minor differences between the Sawgrass Agreement and the subadvisory agreement
that had been in place with Nicholas-Applegate. First, the language of the
Sawgrass Agreement clarifies that Sawgrass is only responsible for managing a
portion of the Small Cap Portfolio's assets. Second, the Sawgrass Agreement
specifically requires Sawgrass to reconcile its records of the securities and
cash in its portion of the Small Cap Portfolio with statements provided by the
Trust's custodian on a monthly basis and to report to the Manager on each such
reconciliation, including information on any discrepancies noted and actions
taken by Sawgrass to address those discrepancies. Third, the language of the
Sawgrass Agreement clarifies that Sawgrass may place brokerage business for the
Small Cap Portfolio through brokers who provide Sawgrass with certain research
services, even though such brokers may charge higher brokerage fees than other
brokers. In addition, the identity of the subadviser and the dates of execution,
effectiveness and termination in the Sawgrass Agreement differ from those in the
prior subadvisory agreement with Nicholas-Applegate. Based upon their review,
the Trustees concluded that the Sawgrass Agreement was reasonable, fair and in
the best interests of the Trust and the shareholders of the Small Cap Portfolio,
and that the fee provided in the Sawgrass Agreement (the same as in the prior
subadvisory agreement) was fair and reasonable. Accordingly, after consideration
of the above factors, and such other factors and information as
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they deemed relevant, the Trustees, including the non-interested Trustees,
unanimously approved the Sawgrass Agreement.
INFORMATION CONCERNING SAWGRASS. Sawgrass, 4337 Pablo Oaks Court, Building
200, Jacksonville, FL 32224, began managing its portion of the Small Cap
Portfolio on May 27, 1999. Sawgrass has specialized in small-cap equity
investing since it was organized as a Delaware limited liability company in
1998. Sawgrass was formed by a core group of investment professionals who had
worked together for 15 years at Barnett Capital Advisors, Inc. AmSouth Bank owns
50% of the shares of Sawgrass, and employees of Sawgrass own the remaining 50%.
AmSouth Bank is a subsidiary of AmSouth Bancorporation. As of May 24, 1999,
Sawgrass had approximately $250 million in assets under management for
corporate, municipal, public and state retirement plans and mutual funds.
Exhibit E contains information about other funds managed by Sawgrass with
an investment objective and strategies similar to those of the Small Cap
Portfolio. Exhibit E also lists the principal executive officer and directors of
Sawgrass.
LARGE CAP PORTFOLIO
On August 3, 1999, the Trustees, including a majority of the non-interested
Trustees, unanimously approved the CCI Agreement and the selection by PIFM of
CCI to manage a portion of the Large Cap Portfolio. CCI had previously served as
subadviser to a portion of the Large Cap Portfolio under a subadvisory agreement
that was terminated on June 30, 1999.
CCI is organized as a Delaware [general] partnership. Prior to June 30,
1999, CCI was owned by PIMCO Advisors, L.P. PIMCO Advisors, L.P., the general
partner of CCI, owned over 99% of CCI, and Columbus Circle Investors Management
Inc. (CCIM) owned the rest of CCI. CCIM was, in turn, a wholly-owned subsidiary
of PIMCO Advisors, L.P.
In a transaction that closed on June 30, 1999, CCI became an independent
company owned and managed by five of its managing directors. CCIP LLC replaced
PIMCO Advisors, L.P. as CCI's general partner. CCIP LLC is owned by five
managing directors of CCI. These managing directors also purchased CCIM from
PIMCO Advisors, L.P.
The transaction described above constituted a change in actual control of
CCI, causing an assignment of CCI's original subadvisory agreement with respect
to the Large Cap Portfolio. Under Section 15 of the Investment Company Act and
the terms of the original subadvisory agreement, the agreement automatically
terminated when this assignment occurred. For the period from July 1, 1999
through August 3, 1999, CCI continued to manage its portion of the Large Cap
Portfolio pursuant to the terms of the terminated agreement, except that CCI was
only reimbursed for its reasonable costs and expenses for providing its
services.
The CCI Agreement contains substantially the same terms and conditions as
the subadvisory agreement in effect with CCI prior to June 30, 1999. See "Terms
of Subadvisory Agreements" below. CCI renders investment advice to a portion of
the Large Cap Portfolio in accordance with its investment objective and policies
and also makes investment decisions to purchase and sell securities on behalf of
the Large Cap Portfolio, subject to the supervision of PIFM.
Section 15 of the Investment Company Act requires that a majority of the
Large Cap Portfolio's outstanding voting securities approve the CCI Agreement.
However, pursuant to the SEC exemptive order described above, the execution and
implementation of the CCI Agreement did not require shareholder consent.
BOARD CONSIDERATION OF THE CCI AGREEMENT. At a special meeting of the
Board at which all of the Trustees were in attendance, the Board of Trustees
considered and unanimously approved the CCI Agreement on August 3, 1999. In
considering the approval of the CCI Agreement, the Trustees, including the non-
interested Trustees, considered whether the approval of the CCI Agreement was in
the best interests of the Trust and shareholders of the Large Cap Portfolio. At
the meeting, the Trustees reviewed materials furnished by management and CCI and
met with representatives of CCI. Among other things, the Trustees considered the
investment philosophy and style of CCI, its relative performance record, its
personnel and its financial
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strength. The Board also considered the investment management services provided
by CCI to the Large Cap Portfolio prior to June 30, 1999, and CCI's
representation that the new ownership structure would not adversely affect the
nature and quality of those services.
The Trustees discussed and reviewed the terms of the CCI Agreement. With
the exception of the dates of execution, effectiveness and termination, the
terms of the CCI Agreement are identical to those of the subadvisory agreement
in effect with CCI prior to June 30, 1999. Based upon their review, the Trustees
concluded that the CCI Agreement was reasonable, fair and in the best interests
of the Trust and the shareholders of the Large Cap Portfolio, and that the fee
provided in the CCI Agreement (the same as in the previous subadvisory agreement
with CCI) was fair and reasonable. Accordingly, after consideration of the above
factors, and such other factors and information as they deemed relevant, the
Trustees, including the non-interested Trustees, unanimously approved the CCI
Agreement.
INFORMATION CONCERNING CCI. CCI, Metro Center, One Station Place, 8th
Floor, Stamford, CT 06902, is a registered investment adviser that manages
accounts for a variety of organizations, including corporate, government and
union pension and profit-sharing plans, foundations and educational
institutions. CCI also provides asset management services to mutual funds,
individual investors, family trusts and private trust companies. As of June 30,
1999, CCI had approximately $4.7 billion in assets under management.
Exhibit E lists the managing directors of CCI. CCI does not currently
manage any other registered investment companies.
TERMS OF SUBADVISORY AGREEMENTS
Under the Subadvisory Agreements, Sawgrass and CCI are compensated by PIFM
(and not the Portfolios) at an annual rate of .30 of 1% of the average net
assets of the Portfolios managed by Sawgrass and CCI, respectively. The
Subadvisory Agreements provide that, subject to PIFM's and the Board of
Trustees' supervision, Sawgrass and CCI are responsible for managing the
investment operations of their respective Portfolios and for making investment
decisions and placing orders to purchase and sell securities for their
respective Portfolios, all in accordance with the investment objective and
policies reflected in the current Prospectus and Statement of Additional
Information of the Trust and as may be adopted from time to time by the Board of
Trustees. In accordance with the requirements of the Investment Company Act,
Sawgrass and CCI also provide PIFM with all books and records relating to the
transactions they execute and render to the Trustees such periodic and special
reports as the Board of Trustees may reasonably request.
Duration and Termination. Each Subadvisory Agreement will remain in full
force and effect for a period of two years from the date of its execution, and
will continue thereafter as long as its continuance is specifically approved at
least annually by vote of a majority of the outstanding voting securities (as
that term is defined in the Investment Company Act) of the Portfolio, or by the
Board of Trustees, including the approval by a majority of non-interested
Trustees, at a meeting called for the purpose of voting on such approval;
provided, however, that (1) the Subadvisory Agreements may be terminated at any
time without the payment of any penalty, either by vote of the Board of Trustees
or by vote of a majority of the outstanding voting securities of the respective
Portfolios, (2) the Subadvisory Agreements will terminate immediately in the
event of their assignment (within the meaning of the Investment Company Act) or
upon the termination of the Trust's management agreement with PIFM, and (3) the
Subadvisory Agreements may each be terminated at any time by PIFM and by
Sawgrass and CCI, respectively, on not more than 60 days' nor less than 30 days'
written notice to the other party to the Subadvisory Agreement.
Liability. The Subadvisory Agreements provide that, in the absence of
willful misfeasance, bad faith, gross negligence in the performance of its
duties, or reckless disregard of their obligations and duties thereunder,
Sawgrass and CCI will not be liable for any act or omission in connection with
their activities as subadviser to the Small Cap and Large Cap Portfolios,
respectively.
SHAREHOLDER PROPOSALS
As a Delaware business trust, the Trust is not required to hold annual
meetings of shareholders and the Trustees currently do not intend to hold such
meetings unless shareholder action is required in accordance
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with the Investment Company Act or the Trust's Declaration of Trust. A
shareholder proposal intended to be presented at any meeting of shareholders of
the Trust must be received by the Trust a reasonable time before the Trustees'
solicitation relating thereto is made in order to be included in the Trust'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 the 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.
DAVID F. CONNOR
Secretary
Dated: August 20, 1999
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EXHIBIT A
THE TARGET PORTFOLIO TRUST
(SMALL CAPITALIZATION GROWTH PORTFOLIO)
SUBADVISORY AGREEMENT
Agreement made on this 26th day of May, 1999, between Prudential
Investments Fund Management LLC (PIFM or the Manager), a New York limited
liability company, and Sawgrass Asset Management, L.L.C. (the Adviser), a
Delaware limited liability company.
WHEREAS, PIFM has entered into a management agreement (the Management
Agreement) with The Target Portfolio Trust (the Trust), a Delaware business
trust and an open-end management investment company registered under the
Investment Company Act of 1940 (the 1940 Act), pursuant to which PIFM will act
as manager of the Trust.
WHEREAS, shares of the Trust are divided into separate series or portfolios
(each a portfolio), each of which is established pursuant to a resolution of the
Trustees of the Trust, and the Trustees may from time to time terminate such
portfolios or establish and terminate additional portfolios.
WHEREAS, PIFM has the responsibility of evaluating, recommending,
supervising and compensating investment advisers to each portfolio of the Trust
and desires to retain the Adviser to provide investment advisory services to the
Small Capitalization Growth Portfolio of the Trust (the Fund) in connection with
the management of the Trust and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Trustees
of the Trust, the Adviser shall manage such portion of the investment
operations of the Fund as the Manager shall direct and shall manage the
composition of such portion of the Fund, including the purchase, retention
and disposition thereof, in accordance with the Fund's investment
objective, policies and restrictions as stated in the Prospectus (such
Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time being herein called the
"Prospectus") as delivered to the Adviser from time to time by the Manager
and subject to the following understandings:
(i) The Adviser shall provide supervision of such portion of the
Fund's investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Fund, and
what portion of the assets it manages will be invested or held
uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Adviser shall act in conformity with the Agreement and
Declaration of Trust, By-Laws and Prospectus of the Trust and the Fund
as provided to the Adviser by the Manager and with the written
instructions and directions of the Manager and of the Trustees of the
Trust and will conform to and comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986, as amended, and all other
applicable federal and state laws and regulations.
(iii) The Adviser shall determine the securities and commodities or
other assets to be purchased or sold by such portion of the Fund and
will place orders pursuant to its determination with or through such
persons, brokers, dealers or futures commission merchants (including but
not limited to Prudential Securities Incorporated) to carry out the
policy with respect to brokerage as set forth in the Trust's
Registration Statement and Prospectus or as the Trustees may direct from
time to time. In providing the Fund with investment supervision, it is
recognized that the Adviser will give primary consideration to securing
best execution. Within the framework of this policy, the Adviser may
consider the financial responsibility, research and investment
information and other services provided by brokers, dealers or futures
commission merchants who may effect or be a party to any such
transaction or other transactions to which the Adviser's other clients
may be a party. It is
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understood that Prudential Securities Incorporated may be used as a
broker for securities transactions but that no formula has been adopted
for allocation of the Fund's investment transaction business. It is also
understood that it is desirable for the Trust that the Adviser have
access to supplemental investment and market research and security and
economic analysis provided by brokers or futures commission merchants
who may execute brokerage transactions at a higher cost to the Trust
than may result when allocating brokerage to other brokers solely on the
basis of seeking lowest price. Therefore, the Adviser is authorized to
place orders for the purchase and sale of securities and commodities or
other assets for the Fund with such brokers or futures commission
merchants, subject to review by the Trustees from time to time with
respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers or futures
commission merchants may be useful to the Adviser in connection with the
Adviser's services to other clients.
On occasions when the Adviser deems the purchase or sale of a
security, commodity or other asset to be in the best interest of the
Fund as well as other clients of the Adviser, the Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities, commodities or other assets to
be sold or purchased in order to obtain best execution. In such event,
allocation of the securities, commodities or other assets so purchased
or sold, as well as the expenses incurred in the transaction, will be
made by the Adviser in the manner the Adviser considers to be the most
equitable and consistent with its fiduciary obligations to the Trust and
to such other clients.
(iv) The Adviser shall maintain all books and records with respect
to the portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940
Act and shall render to the Trustees such periodic and special reports
as the Board may reasonably request.
(v) The Adviser shall provide the Trust's custodian (the Custodian)
on each business day with information relating to all transactions
concerning the portion of the Fund's assets it manages and shall provide
the Manager with such information upon request of the Manager. The
Adviser shall reconcile its records of the Fund's securities and cash
managed by the Adviser with statements provided by the Custodian at
least once each month. The Adviser shall provide the Manager with a
written report on each such reconciliation, including information on any
discrepancies noted and actions taken by the Adviser in response
thereto, by the tenth business day of the following month to the extent
reasonably practicable.
(vi) The investment management services provided by the Adviser
hereunder are not exclusive, and the Adviser shall be free to render
similar services to others.
(b) Services to be furnished by the Adviser under this Agreement
may be furnished through the medium of any of its directors, officers or
employees.
(c) The Adviser shall keep the Fund's books and records required
to be maintained by the Adviser pursuant to paragraph 1(a)(iv) hereof and
shall timely furnish to the Manager all information relating to the
Adviser's services hereunder needed by the Manager to keep the other books
and records of the Trust required by Rule 31a-1 under the 1940 Act. The
Adviser agrees that all records which it maintains for the Fund are the
property of the Trust and the Adviser will surrender promptly to the Trust
any of such records upon the Trust's request. The Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
such records as are required to be maintained by it pursuant to paragraph
1(a) hereof.
(d) The Adviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940 (Advisers Act) and other applicable state and federal laws and
regulations.
(e) The Adviser shall furnish to the Manager copies of all
records prepared in connection with (i) the performance of this Agreement
and (ii) the reports prepared in accordance with the compliance procedures
maintained pursuant to paragraph 1(d) hereof as the Manager may reasonably
request.
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2. The Manager shall continue to have responsibility for all services
to be provided to the Fund pursuant to the Management Agreement and shall
oversee and review the Adviser's performance of its duties under this
Agreement.
3. The Manager shall compensate the Adviser for the services provided
and the expenses assumed pursuant to this Subadvisory Agreement at the
annual rate of .30 of 1% of the average daily net assets of the portion of
the Fund managed by the Adviser. This fee will be computed daily and paid
monthly.
4. The Adviser shall not be liable for any error of judgment or for
any loss suffered by the Fund, the Trust or the Manager in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the Adviser's part in
the performance of its duties or from its reckless disregard of its
obligations and duties under this Agreement, provided, however, that
nothing in this Agreement shall be deemed to waive any rights the Manager
or the Trust may have against the Adviser under federal or state securities
laws, including for acts of good faith.
5. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements
of the 1940 Act; provided, however, that this Agreement may be terminated
by the Trust at any time, without the payment of any penalty, by the
Trustees or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, or by the Manager or the Adviser at
any time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party. This Agreement shall
terminate automatically in the event of its assignment (as defined in the
1940 Act) or upon the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any
of the Adviser's directors, officers or employees to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit the Adviser's right to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
7. During the term of this Agreement, the Manager agrees to furnish
the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Trust or the public, which refer to the
Adviser in any way; provided, however, that any such item which describes
or characterizes the Adviser's investment process with respect to the Fund,
the names of any of its clients (other than the Trust or advisory clients
of PIFM and its affiliates) or any of its performance results shall be
furnished to the Adviser by first class or overnight mail, facsimile
transmission equipment or hand delivery prior to use thereof, and such item
shall not be used if the Adviser reasonably objects to such use in writing
within forty-eight (48) hours (or such other time as may be mutually
agreed) after receipt thereof (provided, however, that if such item is not
received by the Adviser during normal business hours on a business day,
such period shall end forty-eight (48) hours after the start of normal
business hours on the next succeeding business day).
8. This Agreement may be amended by mutual consent, but the consent of
the Trust must be obtained in conformity with the requirements of the 1940
Act.
9. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.
A-3
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND
MANAGEMENT LLC
By: /s/ NEIL A. MCGUINNESS
------------------------------------
Neil A. McGuinness
Executive Vice President
SAWGRASS ASSET MANAGEMENT, L.L.C.
By: /s/ DEAN MCQUIDDY
------------------------------------
Dean McQuiddy
Principal
A-4
<PAGE> 13
EXHIBIT B
THE TARGET PORTFOLIO TRUST
SUBADVISORY AGREEMENT
Agreement made as of this 3rd day of August, 1999, between Prudential
Investments Fund Management LCC (PIFM or the Manager), a New York limited
liability company, and Columbus Circle Investors (the Adviser), a Delaware
partnership.
WHEREAS, PIFM has entered into a management agreement (the Management
Agreement) with The Target Portfolio Trust (the Trust), a Delaware business
trust and a diversified open-end management investment company registered under
the Investment Company Act of 1940 (the 1940 Act), pursuant to which PIFM acts
as Manager of the Trust.
WHEREAS, shares of the Trust are divided into separate series or portfolios
(each a portfolio), each of which is established pursuant to a resolution of the
Trustees of the Trust and the Trustees may from time to time terminate such
portfolios or establish and terminate additional portfolios.
WHEREAS, PIFM has the responsibility of evaluating, recommending,
supervising and compensating investment advisers to each portfolio of the Trust
and shall enter into subadvisory agreements with one or more subadvisers with
respect to the management of the Large Capitalization Growth Portfolio of the
Trust (the Portfolio) in connection with the management of the Trust.
WHEREAS, the Manager desires to retain the Adviser to provide investment
advisory services to the Portfolio and to manage such portion of the Portfolio
as the Manager shall from time to time direct and the Adviser is willing to
render such investment advisory services. NOW, THEREFORE, the Parties agree as
follows:
1. (a) Subject to the supervision of the Manager and of the Trustees
of the Trust, the Adviser shall manage the investment operations of the
Portfolio as the Manager shall direct and shall manage the composition of
its portfolio, including the purchase, retention and disposition thereof,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Prospectus (such Prospectus and Statement of
Additional Information as currently in effect and as amended or
supplemented from time to time, being herein called the "Prospectus") and
subject to the following understandings:
(i) The Adviser shall provide supervision of such portion of the
Portfolio's investments as the Manager shall direct and shall determine
from time to time what investments and securities will be purchased,
retained, sold or loaned by the Portfolio, and what portion of the
assets it manages will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this
Agreement, the Adviser shall act in conformity with the Declaration of
Trust, By-Laws and Prospectus of the Trust and the Portfolio and with
the instructions and directions of the Manager and of the Trustees of
the Trust and will conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986 and all other applicable
federal and state laws and regulations.
(iii) The Adviser shall determine the securities and futures
contracts to be purchased or sold by such portion of the Portfolio and
will place orders with or through such persons, brokers, dealers or
futures commission merchants (including but not limited to Prudential
Securities Incorporated) to carry out the policy with respect to
brokerage as set forth in the Trust's Registration Statement and
Prospectus or as the Trustees may direct from time to time. In providing
the Portfolio with investment supervision, it is recognized that the
Adviser will give primary consideration to securing the most favorable
price and efficient execution. Within the framework of this policy, the
Adviser may consider the financial responsibility, research and
investment information and other services provided by brokers, dealers
or futures commission merchants who may effect or be a party to any such
transaction or other transactions to which the Adviser's other clients
may be a party. It is
B-1
<PAGE> 14
understood that Prudential Securities Incorporated may be used as
principal broker for securities transactions but that no formula has
been adopted for allocation of the Portfolio's investment transaction
business. It is also understood that it is desirable for the Trust that
the Adviser have access to supplemental investment and market research
and security and economic analysis provided by brokers or futures
commission merchants who may execute brokerage transactions at a higher
cost to the Trust than may result when allocating brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the Adviser is authorized to place orders for the
purchase and sale of securities and futures contracts for the Portfolio
with such brokers or futures commission merchants, subject to review by
the Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services
provided by such brokers or futures commission merchants may be useful
to the Adviser in connection with the Adviser's services to other
clients.
On occasions when the Adviser deems the purchase or sale of a
security or futures contract to be in the best interest of the Portfolio
as well as other clients of the Adviser, the Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities or futures contracts to be sold
or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation
of the securities or futures contracts so purchased or sold, as well as
the expenses incurred in the transaction, will be made by the Adviser in
the manner the Adviser considers to be the most equitable and consistent
with its fiduciary obligations to the Trust and to such other clients.
(iv) The Adviser shall maintain all books and records with respect
to the portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-l under the 1940
Act and shall render to the Trustees such periodic and special reports
as the Board may reasonably request.
(v) The Adviser shall provide the Trust's Custodian on each
business day with information relating to all transactions concerning
the portion of the Portfolio's assets it manages and shall provide the
Manager with such information upon request of the Manager.
(vi) The investment management services provided by the Adviser
hereunder are not exclusive, and the Adviser shall be free to render
similar services to others; provided, however, that the Adviser agrees
that neither it, nor any person controlled by it, nor any successor
shall serve or accept retention as investment adviser, investment
manager or similar service provider during the term of this Agreement
and for the period of one year after the termination of this Agreement
with or for the benefit of any investment company registered under the
1940 Act that seeks as a primary market for its shares asset allocation
programs sponsored by U.S. broker-dealers similar in nature or market to
the Prudential Securities Target Program and as may be agreed from time
to time in writing by the Manager and the Adviser.
(b) Services to be furnished by the Adviser under this Agreement
may be furnished through the medium of any of its directors, officers or
employees.
(c) The Adviser shall keep the Portfolio's books and records
required to be maintained by the Adviser pursuant to paragraph 1(a)(iv)
hereof and shall timely furnish to the Manager all information relating
to the Adviser's services hereunder needed by the Manager to keep the
other books and records of the Trust required by Rule 31a-1 under the
1940 Act. The Adviser agrees that all records which it maintains for the
Portfolio are the property of the Trust and the Adviser will surrender
promptly to the Trust any of such records upon the Trust's request. The
Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
(d) The Adviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Investment Advisers Act
of 1940 (Advisers Act) and other applicable state and federal
regulations.
B-2
<PAGE> 15
(e) The Adviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and
(ii) the maintenance of compliance procedures pursuant to paragraph 1(d)
hereof as the Manager may reasonably request.
2. The Manager shall continue to have responsibility for all services
to be provided to the Portfolio pursuant to the Management Agreement and
shall oversee and review the Adviser's performance of its duties under this
Agreement.
3. The Manager shall compensate the Adviser for the services provided
and the expenses assumed pursuant to this Subadvisory Agreement, a fee at
an annual rate of .30 of 1% of the average daily net assets of the portion
of the Portfolio managed by the Adviser. This fee will be computed daily
and paid monthly.
4. The Adviser shall not be liable for any error of judgment or for
any loss suffered by the Portfolio, the Trust or the Manager in connection
with the matters to which this Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the Adviser's
part in the performance of its duties or from its reckless disregard of its
obligations and duties under this Agreement.
5. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements
of the 1940 Act; provided, however, that this Agreement may be terminated
by the Trust at any time, without the payment of any penalty, by the
Trustees or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Portfolio, or by the Manager or the Adviser
at any time, without the payment of any penalty, on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment (as defined in
the 1940 Act) or upon the termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any
of the Adviser's directors, officers or employees to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit the Adviser's right to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association, except as described in Paragraph 1(a)(vi) above.
7. During the term of this Agreement, the Manager agrees to furnish
the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Trust or the public, which refer to the
Adviser in any way, prior to use thereof and not to use material if the
Adviser reasonably objects in writing five business days (or such other
time as may be mutually agreed) after receipt thereof. Sales literature may
be furnished to the Adviser hereunder by first class or overnight mail,
facsimile transmission equipment or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of
the Trust must be obtained in conformity with the requirements of the 1940
Act.
9. This Agreement shall be governed by the laws of the State of New
York.
B-3
<PAGE> 16
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND
MANAGEMENT LLC
By: /s/ ROBERT F. GUNIA
------------------------------------
Robert F. Gunia
Executive Vice President
COLUMBUS CIRCLE INVESTORS
By: /s/ ANTHONY RIZZA
------------------------------------
Anthony Rizza
B-4
<PAGE> 17
EXHIBIT C
MANAGEMENT OF THE TRUST
THE MANAGER
Prudential Investments Fund Management LLC (PIFM or the Manager), Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, serves as the
Trust's Manager under a management agreement (the Management Agreement) dated as
of November 9, 1992 and renewed thereafter as required by the Investment Company
Act of 1940, as amended (the Investment Company Act).
The Management Agreement was last approved by the Trustees of the Trust,
including a majority of the Trustees who were not parties to the contract and
were not interested persons of those parties (as defined in the Investment
Company Act) on May 26, 1999. It was approved by the sole shareholder of the
Trust on October 14, 1992.
TERMS OF THE MANAGEMENT AGREEMENT
Pursuant to the Management Agreement, PIFM, subject to the supervision of
the Trustees and in conformity with the stated policies of the Trust, manages
both the investment operations of the Trust and the composition of the Trust's
portfolios, including the purchase, retention and disposition thereof. The
Manager is authorized to enter into subadvisory agreements for investment
advisory services in connection with the management of the Trust and each
portfolio thereof. The Manager will continue to have responsibility for all
investment advisory services furnished pursuant to any such investment advisory
agreements.
The Manager reviews the performance of all subadvisers, and makes
recommendations to the Trustees with respect to the retention and renewal of
contracts. In connection therewith, PIFM is obligated to keep certain books and
records of the Trust. PIFM also administers the Trust's business affairs and, in
connection therewith, furnishes the Trust with office facilities, together with
those ordinary clerical and bookkeeping services which are not being furnished
by State Street Bank and Trust Company, the Trust's custodian and Prudential
Mutual Fund Services LLC (PMFS), the Trust's transfer and dividend disbursing
agent. The management services of PIFM for the Trust are not exclusive under the
terms of the Management Agreement and PIFM is free to, and does, render
management services to others.
PIFM has authorized any of its directors, officers and employees who have
been elected as Trustees or officers of the Trust to serve in the capacities in
which they have been elected. All services furnished by PIFM under the
Management Agreement may be furnished by any such directors, officers or
employees of PIFM.
In connection with its management of the business affairs of the Trust,
PIFM bears the following expenses:
(a) the salaries and expenses of all of its and the Trust's personnel
except the fees and expenses of Trustees who are not affiliated persons of
PIFM or the Trust's subadvisers;
(b) all expenses incurred by PIFM or by the Trust in connection with
managing the ordinary course of the Trust's business, other than those
assumed by the Trust, as described below; and
(c) the fees payable to each subadviser pursuant to the subadvisory
agreements between PIFM and each subadviser.
For its services, PIFM is compensated by each portfolio of the Trust. The
annual management fee for each of the Large Cap and Small Cap Portfolios is paid
at the rate of .60% of the average daily net assets of the Portfolio.
The Management Agreement also provides that, in the event the expenses of
the Trust (including the fees of PIFM, 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 Trust'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 the Trust's shares are qualified for offer and
C-1
<PAGE> 18
sale, the compensation due to PIFM will be reduced by the amount of such excess.
Reductions in excess of the total compensation payable to PIFM will be paid by
PIFM to the Trust. No such reductions were required during the fiscal year ended
December 31, 1998. No jurisdiction currently limits the Trust's expenses.
Under the terms of the Management Agreement, the Trust is responsible for
the payment of the following expenses: (a) the fees payable to the Manager, (b)
the fees and expenses of Trustees who are not affiliated persons of the Manager
or the Trust's subadvisers, (c) the fees and certain expenses of the Trust's
custodian and transfer and dividend disbursing agent, including the cost of
providing records to the Manager in connection with its obligation of
maintaining required records of the Trust and of pricing the Trust's shares, (d)
the charges and expenses of the Trust's legal counsel and independent
accountants, (e) brokerage commissions and any issue or transfer taxes
chargeable to the Trust in connection with its securities transactions, (f) all
taxes and corporate fees payable by the Trust to governmental agencies, (g) the
fees of any trade associations of which the Trust may be a member, (h) the cost
of share certificates representing shares of the Trust, (i) the cost of fidelity
and liability insurance, (j) the fees and expenses involved in registering and
maintaining registration of the Trust and of its shares with the SEC and
qualifying the Trust's shares under state securities laws, including the
preparation and printing of the Trust's registration statements and prospectuses
for such purposes, (k) allocable communications expenses with respect to
investor services and all expenses of shareholders' and Trustees' meetings and
of preparing, printing and mailing reports, proxy statements and prospectuses to
shareholders in the amount necessary for distribution to the shareholders, and
(l) litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business.
The Management Agreement provides that PIFM will not be liable for any
error of judgment or for any loss suffered by the Trust in connection with the
matters to which the Management Agreement relates, except a loss resulting from
willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
The Management Agreement will continue in effect for a period of more than two
years from the date of execution only so long as such continuance is
specifically approved at least annually in conformity with the Investment
Company Act. The Management Agreement also provides that it will terminate
automatically if assigned and that it may be terminated without penalty by the
Trustees of the Trust, by vote of a majority of the Trust'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 PIFM
PIFM is a subsidiary of Prudential Securities Incorporated (Prudential
Securities) and an indirect, wholly-owned subsidiary of The Prudential Insurance
Company of America (Prudential), a major, diversified insurance and financial
services company. Prudential's address is Prudential Plaza, Newark, New Jersey
07102-4077. PIFM is organized in New York as a limited liability company.
PIFM acts as manager for the following investment companies:
Open-End Management Investment Companies: Cash Accumulation Trust,
Command Money Fund, Command Government Fund, Command Tax-Free Fund, The
Global Total Return Fund, Inc., Global Utility Fund, Inc.,
Nicholas-Applegate Fund, Inc. (Nicholas-Applegate Growth Equity Fund),
Prudential Balanced Fund, Prudential California Municipal Fund, Prudential
Developing Markets Fund, Prudential Distressed Securities Fund, Inc.,
Prudential Diversified Bond Fund, Inc., Prudential Diversified Funds,
Prudential Emerging Growth Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Equity Income Fund, Prudential Europe Growth Fund, Inc.,
Prudential Global Genesis Fund, Inc., Prudential Global Limited Maturity
Fund, Inc., Prudential Government Income Fund, Inc., Prudential Government
Securities Trust, Prudential High-Yield Fund, Inc., Prudential High Yield
Total Return Fund, Inc., Prudential Index Series Fund, Prudential
Institutional Liquidity Portfolio, Inc., Prudential Intermediate Global
Income Fund, Inc., Prudential International Bond Fund, Inc., Prudential
Mid-Cap Value Fund, Prudential MoneyMart Assets, Inc., Prudential Municipal
Bond Fund, Prudential Municipal Series Fund, Prudential National Municipals
Fund, Inc., Prudential Natural Resources Fund, Inc., Prudential Pacific
Growth Fund, Inc., Prudential Real Estate Securities Fund, Prudential
Sector Funds, Inc., Prudential Small-Cap Quantum Fund, Inc., Prudential
Small Company Value Fund, Inc., Prudential
C-2
<PAGE> 19
Special Money Market Fund, Inc., Prudential Structured Maturity Fund, Inc.,
Prudential Tax-Free Money Fund, Inc., Prudential Tax-Managed Equity Fund,
Prudential 20/20 Focus Fund, Prudential World Fund, Inc., The Prudential
Investment Portfolios, Inc. and The Target Portfolio Trust.
Closed-End Management Investment Company: The High Yield Income Fund,
Inc.
PIFM'S DIRECTORS AND OFFICERS
The business and other connections of PIFM's directors and principal
executive officers are set forth below. The address of each person is Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.
<TABLE>
<CAPTION>
NAME POSITION WITH PIFM PRINCIPAL OCCUPATIONS
---- ------------------ ---------------------
<S> <C> <C>
Robert F. Gunia...... Executive Vice President and Comptroller, Prudential Investments; Executive
Treasurer Vice President and Treasurer, PIFM; Senior Vice
President, Prudential Securities
</TABLE>
THE DISTRIBUTOR AND TRANSFER AGENT
Prudential Investment Management Services LLC (PIMS or the Distributor),
Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077, acts
as the distributor of the shares of the Trust but is not compensated by the
Trust for those services. Prior to June 1, 1998, Prudential Securities was the
Trust's distributor. PIMS and Prudential Securities are subsidiaries of
Prudential.
Pruco Securities Corporation (Prusec), 111 Durham Avenue, South Plainfield,
New Jersey 07080-2398, a wholly-owned subsidiary of Prudential, is distributing
shares of the Trust pursuant to a dealer agreement between Prusec and Prudential
Securities. Prusec received no compensation for distributing the Portfolio's
shares during the fiscal year ended December 31, 1998.
The Trust's transfer agent is PMFS, Raritan Plaza One, Edison, New Jersey
08837. PMFS received $104,000 for its services in connection with each Portfolio
during the fiscal year ended December 31, 1998.
BROKERAGE
During the fiscal year ended December 31, 1998, the Large Cap Portfolio
paid $2,700 in commissions to Prudential Securities, which represented 0.9% of
total commissions paid. During the fiscal year ended December 31, 1998, the
Small Cap Portfolio paid no commissions to affiliated broker-dealers.
C-3
<PAGE> 20
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<PAGE> 21
EXHIBIT D
OFFICER INFORMATION
<TABLE>
<CAPTION>
NAME (AGE) OFFICE WITH THE TRUST PRINCIPAL OCCUPATIONS
---------- --------------------- ---------------------
<S> <C> <C>
*John R. Strangfeld, Jr. (45)........ Trustee and President Chief Executive Officer, Chairman,
President and Director of The
Prudential Investment Corporation
(since January 1990); Executive
Vice President of the Prudential
Global Asset Management Group of
Prudential (since February 1998);
Chairman of PRICOA Capital Group
(since August 1989); Chief
Executive Officer of Private Asset
Management Group of Prudential
(November 1994-December 1998)
Robert F. Gunia (51)................. Vice President Vice President (since September 1997)
of Prudential Investments; Executive
Vice President and Treasurer (since
December 1996), Prudential
Investments Fund Management LLC
(PIFM); Senior Vice President
(since March 1987) of Prudential
Securities Incorporated (Prudential
Securities); 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. and Director or Trustee of 44
funds within the Prudential Mutual
Funds.
David F. Connor (35)................. Secretary Assistant General Counsel (since
March 1998) of PIFM; Associate
Attorney, Drinker Biddle & Reath
LLP prior thereto.
Grace C. Torres (39)................. Treasurer and Principal First Vice President (since December
Financial and Accounting 1996) of PIFM; First Vice President
Officer (since March 1993) of Prudential
Securities; formerly First Vice
President (March 1994-September
1996) of Prudential Mutual Fund
Management, Inc. and Vice President
(July 1989-March 1994) of Bankers
Trust Corporation.
Stephen M. Ungerman (45)............. Assistant Treasurer Tax Director (since March 1996) of
Prudential Investments; formerly
First Vice President (February
1993-September 1996) of Prudential
Mutual Fund Management, Inc.
</TABLE>
D-1
<PAGE> 22
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<PAGE> 23
EXHIBIT E
SAWGRASS FUNDS
The following table sets forth information relating to the registered
investment companies with an investment objective and strategies similar to
those of the Small Cap Portfolio for which Sawgrass acts as investment adviser
or subadviser:
<TABLE>
<CAPTION>
ADVISORY FEES NET ASSETS
ANNUAL ADVISORY FEE RATE WAIVED AS OF
FUNDS (BASED ON AVERAGE NET ASSETS) FOR LAST FISCAL YEAR AUGUST , 1999
----- ----------------------------- -------------------- -------------
<S> <C> <C> <C>
AmSouth Mutual Funds
AmSouth Small Cap Fund............. .84% N/A $
SEI Investments
SEI Small Cap Growth Fund.......... .50% N/A $
</TABLE>
SAWGRASS MANAGEMENT
The following table sets forth the name and principal occupation of the
principal executive officer and the directors of Sawgrass.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
---- --------------------
<S> <C>
Andrew M. Cantor, CFA................ President, Principal and Director of Fixed Income
Investments
Dean McQuiddy, CFA................... Vice President, Principal and Director of Equity Investments
Brian K. Monroe...................... Vice President, Principal and Director of Sales and
Marketing
</TABLE>
The address of those listed above is Sawgrass Asset Management, L.L.C.,
4337 Pablo Oaks Court, Building 200, Jacksonville, Florida 32224-9647.
CCI MANAGEMENT
The following table sets forth the name and principal occupation of the
principal executive officers and the managing directors of CCI.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
---- --------------------
<S> <C>
Donald A. Chiboucas.................. Co-Chief Executive Officer and Managing Director of CCI
Robert W. Fehrmann................... Co-Chief Executive Officer, Managing Director and Senior
Client Servicing/Marketing Officer of CCI
Marc S. Felman....................... Co-Chief Executive Officer and Managing Director of CCI
Clifford G. Fox...................... Co-Chief Executive Officer and Managing Director of CCI
Anthony Rizza........................ Co-Chief Executive Officer and Managing Director of CCI
</TABLE>
The address of those listed above is Columbus Circle Investors, Metro
Center, One Station Plaza, Stamford, Connecticut 06902.
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