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SIGNATURE PAUL SCHUBERT
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000893227
<NAME> 2002 TARGET TERM TRUST FUND INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 153,756
<INVESTMENTS-AT-VALUE> 156,297
<RECEIVABLES> 4,856
<ASSETS-OTHER> 7
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<TOTAL-LIABILITIES> 42,597
<SENIOR-EQUITY> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 0
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</TABLE>
Report of Independent Auditors
To the Shareholders and Board of Directors of
2002 Target Term Trust Inc.
In planning and performing our audit of the financial statements of 2002 Target
Term Trust Inc. for the year ended November 30, 1998, we considered its
internal control, including control activities for safeguarding securities,
in order to determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and to comply with the requirements
of Form N-SAR, and not to provide assurance on the internal control.
The management of 2002 Target Term Trust Inc. is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for
external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or
more of the specific internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above at
November 30, 1998.
This report is intended solely for the information and use of the board of
directors and management of 2002 Target Term Trust Inc. and the Securities
and Exchange Commission and is not intended to be and should not be used by
anyone other than these specified parties.
ERNST & YOUNG LLP
January 20, 1999
BY-LAWS AMENDMENT
RESOLVED: That Sections 9 and 10 of Article II of the Fund's By-Laws be,
and they hereby are, amended to read as follows:
Section 9. NOMINATION. Subject to the rights of holders of any class or
series of stock having a preference over the Corporation's common stock as to
dividends or upon liquidation, nominations for the election of directors may
be made by the Board of Directors or a committee appointed by the Board of
Directors or by any stockholder who is entitled to vote for the election of
directors. However, any such stockholder may nominate a director only by
notice in writing delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation, and received by the
Secretary not less than (i) with respect to any nomination to be introduced
at an annual meeting of stockholders, one hundred and twenty days in advance
of the anniversary of the date the Corporation's proxy statement was first
released to stockholders in connection with the previous year's annual
meeting, and (ii) with respect to any nomination to be introduced at a special
meeting of stockholders, the close of business on the seventh day following
the date on which notice of such meeting is first given to stockholders. Each
such notice shall set forth: (a) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of record or beneficial
owner of stock of the Corporation entitled to vote at such meeting (together
with such proof thereof as would meet the requirements for proposals that are
to be included in the Corporation's proxy statements pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended, or any successor to
such Rule) and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) the class and
number of shares of stock held of record, owned beneficially and represented
by proxy by such stockholder as of the record date for the meeting (if such
date shall then have been made publicly available) and as of the date of such
notice. The chairperson of the meeting may refuse to acknowledge a nomination
by any stockholder that is not made in compliance with the foregoing procedure.
Section 10. STOCKHOLDER PROPOSAL. Any stockholder who is entitled to vote
in the election of directors may submit to the Board of Directors proposals to
be considered for submission to the stockholders of the Corporation for their
vote. The introduction of any stockholder proposal that the Board of Directors
decides should be voted on by the stockholders of the Corporation, shall be
made by notice in writing delivered or mailed by first class United States
mail, postage prepaid, to the Secretary of the Corporation, and received by the
Secretary not less than (i) with respect to any proposal to be introduced at an
annual meeting of stockholders, one hundred and twenty days in advance of the
anniversary of the date the Corporation's proxy statement was first released
to stockholders in connection with the previous year's annual meeting, and (ii)
with respect to any proposal to be introduced at a special meeting of
stockholders, the close of business on the seventh day following the date on
which notice of such meeting is first given to stockholders. Each such notice
shall set forth: (a) the proposal to be introduced; (b) the name and address
of the stockholder who intends to make the proposal; (c) a representation that
the stockholder is a holder of record or beneficial owner of stock of the
Corporation entitled to vote at such meeting (together with such proof thereof
as would meet the requirements for proposals that are to be included in the
Corporation's proxy statements pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended, or any successor to such Rule) and intends
to appear in person or by proxy at the meeting to introduce the proposal or
proposals, specified in the notice; and (d) the class and number of shares of
stock held of record, owned beneficially and represented by proxy by such
stockholder as of the record date for the meeting (if such date shall then
have been made publicly available) and as of the date of such notice. The
chairperson of the meeting may refuse to acknowledge the introduction of any
stockholder proposal not made in compliance with the foregoing procedure.
2
DC-285997.01
2002 Target Term Trust
November 30, 1998
N-SAR Exhibits
Item 77Q
At a Board of Directors meeting held on November 11, 1998, the directors
approved an amendment to the by-laws concerning submission of shareholder
proposals. The amendment to the by-laws is attached.
