The Board of Directors reviews Prudential Financial's policies and business strategies and advises and counsels the Chairman and Chief Executive Officer and the other executive officers who manage Prudential Financial's businesses. The Board currently consists of 21 Directors, including the Chairman, 20 of whom are Outside Directors. An "Outside Director" is a Director who is not, and has never been, an officer or employee of Prudential Financial or of any entity controlling, controlled by, or under common control with Prudential Financial, and who is not the beneficial owner of a controlling interest in the voting stock of Prudential Financial or of any entity controlling, controlled by, or under common control with Prudential Financial.

Prudential Financial's Board of Directors is divided into three classes. One class is elected each year to hold office for a term of three years. Of the 21 Directors, seven are Class I Directors with their terms expiring at the 2002 Annual Meeting, seven are Class II Directors with their terms expiring at the 2003 Annual Meeting and seven are Class III Directors with their terms expiring at the 2004 Annual Meeting. As previously noted, six of these 21 Directors have either announced their intention to resign or will not be standing for election in 2002, consistent with Prudential Financial's policy of retirement at the annual meeting following a Director's 70th birthday.

During 2001, the Board of Directors held 11 meetings. All incumbent Directors attended 75% or more of the combined total meetings of the Board and the committees on which they served during 2001, except Mr. Hiner and Mr. Thomson who were prevented from participating, as they had planned, at Prudential Financial's September 11, 2001 Board and committee meetings. Had they been able to attend, they would have participated in at least 75% of the combined total meetings of Prudential Financial.

In addition, all incumbent Directors of Prudential Financial participated in at least 75% of the combined total meetings of the Board and committees of Prudential Insurance on which they served during 2001.¹

(1) During 2001 each Director of Prudential Financial also served on the Board of Prudential Insurance, which was Prudential Financial's parent company until December 18, 2001. Prudential Insurance held eleven concurrent Board meetings with Prudential Financial. Each Director also served on committees of Prudential Insurance that are analogous to those of Prudential Financial, but which generally met more times in 2001 than did those of Prudential Financial since Prudential Financial did not form committees until June of 2001.

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