Document:

<PAGE>

                                                                    Exhibit 10.7

                                      2001
                                      ----
                              Prudential Long-Term
                              --------------------
                              Performance Unit Plan
                              ---------------------

                                    June 2001

  The Compensation Committee may, in its sole discretion, at any time and from
   time to time amend, modify, suspend or terminate this Plan, in whole or in
       part, without notice to or consent of any Participant or employee.
<PAGE>

                                Table of Contents

 .        I.       Program Concept

 .        II.      Eligibility

 .        III.     Granting of Performance Units

 .        IV.      Performance Measurement

 .        V.       Final Valuation and Payment

 .        VI.      Termination of Employment

 .        VII.     Plan Funding

 .        VIII.    Plan Administration

 .        IX.      Revocation, Amendment, and Termination

 .        X.       Limitation on Liability

 .        XI.      No Contract of Employment

 .        XII.     No Right to Participate

 .        XIII.    No Limitations on Corporate Actions

 .        XIV.     Facilitation of Payments

 .        XV.      Addresses; Missing Recipients

 .        XVI.     Taxes

 .        XVII.    Successors

 .        XVIII.   Captions

 .        XIX.     Third Parties

 .        XX.      Non-Alienation Provision

Appendix A - Illustration of 2001 Funding Potential

                                       2
<PAGE>

I. Program Concept
------------------

The 2001 Prudential Long-Term Performance Unit Plan ("the Plan") has been
developed to recognize and reward the contributions that Participants will make
towards The Prudential Insurance Company of America's ("Prudential" or "the
Company") long-term growth and success.

The Long-Term Performance Unit Plan is one of the four elements of Total
Compensation applicable to designated Executives in Prudential. The other
elements are: Base Salary, Annual Incentive Award, and Benefits/Perquisites. The
Long-Term Incentive Award is designed to focus attention on the importance of
sustained company performance over a period of years as well as to assist in the
retention of eligible employees.

II. Eligibility
---------------

Employees at the Vice President or equivalent level (Grade 6P) and above are
eligible to participate in this Plan ("Participants"). In addition, the
Compensation Committee retains the discretion to add certain individuals below
the rank of Vice President as Participants under the Plan, provided the
Committee determines (i) that such individuals are included in a select group of
management or highly compensated employees of the Company and (ii) that making
such individuals Participants under the Plan is in the best interests of the
Company.

III. Granting of Performance Units
----------------------------------

Participants will be eligible for an annual grant of Performance Units. The
decision to grant Performance Units and the number of Performance Units granted
to Plan Participants will be at the discretion of the Compensation Committee.
However, significant emphasis will be given to the individual's performance,
market considerations, internal guidelines and the number of Performance Units
available for grant in arriving at the number to be granted, if any.

The 2001 Performance Unit grants will be valued based upon Company performance
from January 1, 2001 through December 31, 2003 (the "performance period"). There
are, in total, 125,000 Performance Units available for grant in the 2001 Plan.
Each Performance Unit will be valued at 1/125,000th of the amount allocated to
the Plan at the end of the performance period.

A limited number of Performance Units are normally held in reserve to
accommodate new hires and promotions during the year as well as other special
circumstances. The number of Performance Units granted to new hires and those
receiving promotions during 2001 shall be at the discretion of the Compensation
Committee.

                                       3
<PAGE>

IV. Performance Measurement
---------------------------

The value of the Performance Units at the end of the performance period will be
determined by two principal performance measurements: 1) Cumulative Operating
Earnings; and 2) Cumulative Operating Margin achieved over the three year
performance period.

Operating Earnings is defined as Adjusted Operating Income for the Financial
Services Businesses, as defined in the S-1, and also excludes Market Standards
Expenses, Rightsizing/Restructuring Reserves, and unusual items as identified by
management. Operating Margin is Operating Earnings as defined, divided by
Revenue, as defined, for the same period, expressed as a percentage. Revenue is
defined as all items in the Revenue section of a GAAP income statement for the
Financial Services Businesses, including but not limited to Premiums, Policy
Charges and Fees, Net Investment Income and Other Revenue, but excluding
Realized Gains or Losses. The planned Cumulative Operating Earnings is $8.389
billion and the planned Cumulative Operating Margin is 13.54%. In the event of a
subsequent change in accounting methodology or significant acquisition or
divestiture, the above will be reviewed and amended as appropriate.

The value of the Performance Units at the end of the performance period depends
on the amount allocated to the Plan. When threshold performance is achieved, $49
million will be allocated to the Plan. Threshold performance is achievement of
75% of planned Cumulative Operating Earnings amount, or $6.292 billion. If
threshold performance is not achieved, allocation to the Plan will not be made.
For any additional Cumulative Operating Earnings above the threshold, 2.32% of
the incremental amount will be allocated to the Plan (the Basic Allocation
Rate). When Cumulative Operating Earnings exceeds the planned amount, or $8.389
billion, an additional 1.56% of the amount in excess of the planned amount will
be allocated to the Plan (the Premium Allocation Rate). The amount allocated to
the Plan as a result of Cumulative Operating Earnings is not subject to any cap
or maximum.

The allocation formulae described above (i.e., the 2.32% or 1.56%) will be
increased by 0.156% for every 10% improvement in Cumulative Operating Margin
over the planned Cumulative Operating Margin. Partial percentage increases will
be prorated. The maximum increase is 0.78%, which corresponds to a 50%
improvement in Cumulative Operating Margin over plan. This increase in the
allocation rate(s) is called the Operating Margin Adjustment Factor. No negative
adjustment will be made if the planned Cumulative Operating Margin is not
achieved. The Operating Margin Adjustment Factor will only have a positive
impact on the total amount allocated to the Plan.

To ensure that other critical performance factors are also given consideration
and reflected in the final Plan allocation, the Compensation Committee may,
under normal circumstances, adjust the total amount allocated to the Plan by up
to plus or minus 15%. When considering this adjustment, the Compensation
Committee will take into account such financial and non-financial factors as
change in market share, expansion of new

                                       4
<PAGE>

distribution channels, overall changes in financial rating, reputation of
management, customer satisfaction, employee satisfaction and change in most
admired company status. In the event of circumstances that the Compensation
Committee deems extraordinary, the Compensation Committee reserves the right to
make any additional adjustment to the total amount allocated.

The following are three illustrations of how the amount allocated can
potentially be impacted by Cumulative Operating Earnings and Cumulative
Operating Margin. For purposes of the illustrations the calculated amounts have
been rounded. For a summary of the funding potential, refer to Appendix A of
this document.

Example 1:
----------
Cumulative Operating Earnings Achieved = $9.228 billion or $2.9 billion above
threshold
Cumulative Operating Margin Achieved = 14.9% or 10% above plan

<TABLE>
<CAPTION>
<S>                                                                                                    <C>
Threshold Allocation Amount                                                                            $49 million
Basic Allocation Rate Amount                  ($9.228b - $6.292b) X (2.32% + 0.156%)                   $73 million
Premium Allocation Rate Amount                ($9.228b - $8.389b) X (1.56% + 0.156%)                   $14 million
                                                                                                  -----------------
Total Amount allocated                                                                                $136 million
                                                                                                  =================

Example 2:
----------
Cumulative Operating Earnings Achieved = $9.228 billion or $2.9 billion above
threshold
Cumulative Operating Margin Achieved = 12.2% or 10% below plan

Threshold Allocation Amount                                                                            $49 million
Basic Allocation Rate Amount                         ($9.228b - $6.292b) X 2.32%                       $68 million
Premium Allocation Rate Amount                       ($9.228b - $8.389b) X 1.56%                       $13 million
                                                                                               --------------------
Total Amount allocated                                                                                $130 million
                                                                                               ====================

Example 3:

Cumulative Operating Earnings Achieved = $8.389 billion or $2.1 billion above
threshold
Cumulative Operating Margin Achieved = 16.2% or 20% above plan

Threshold Allocation Amount                                                                            $49 million
Basic Allocation Rate Amount                  ($8.389b - $6.292b) X (2.32% + 0.312%)                   $55 million
Premium Allocation Rate Amount                ($8.389b - $8.389b) X (2.32% + 0.312%)                    $0 million
                                                                                                 ------------------
Total Amount allocated                                                                                $104 million
                                                                                                 ==================
</TABLE>

                                       5
<PAGE>

V. Final Valuation and Payment
------------------------------

At the close of the performance period, the amount allocated to the Plan
pursuant to the allocation formulae will be calculated and presented to the
Compensation Committee for review and possible adjustment. When the final amount
to be allocated is approved by the Compensation Committee, Corporate
Compensation will compute the individual payment for each Participant based on
the number of Performance Units granted to the Participant. When the amount to
be paid each Participant under the Plan is computed, the Company will pay such
amounts in a single sum to Participants who are on the active payroll on the
date of payment. At the option of the Company or an affiliate, all or part of
the amount payable may be paid in equivalent number of publicly traded Common
Shares of the Company if they are available and legally permissible at that
time. Any 2001 Performance Unit not granted or any Performance Unit canceled
under the circumstances described below, and not re-granted to other
Participants, shall not be paid to any Participant and any Plan allocation not
paid to the Participants shall revert to the Company.

Payments made under this Plan will not be taken into account in determining
benefits or contribution amounts under any employee benefit plan of the Company
or any of its affiliates.

VI. Termination of Employment
-----------------------------

If employment is terminated prior to the payment of the Performance Units,
treatment of the Performance Units will be as follows.

A.   Discharge, Voluntary Termination, or Competing Business - If, prior to the
     -------------------------------------------------------
     payment of the Performance Units, the Participant is separated from
     employment for cause, as determined by the Compensation Committee, or the
     Participant engages in any business that is directly or indirectly
     competitive with or detrimental to the interests of Prudential as
     determined by the Compensation Committee, or if, before the end of the
     performance period, the Participant resigns or otherwise terminates
     employment under circumstances not described in Section VI B-E below, the
     Participant's Performance Units shall be canceled and the Participant shall
     receive no payment under this Plan. Canceled Performance Units may be
     granted to other Participants.

B.   Retirement - Subject to compliance with the conditions outlined below, if
     ----------
     during the performance period, a Participant separates from employment by
     reason of retirement upon or after qualifying to retire (whether at early
     or normal retirement) under the terms and conditions of any pension plan
     sponsored by the Company or an affiliate in which the Participant
     participates, the number of Performance Units granted will be reduced by
     multiplying the grant by a fraction, the numerator of which is the number
     of full months in the performance period during which the Participant was
     an active employee and the denominator of which is the number of months in
     the performance period (36). A partial month worked shall be counted as a
     full month if the

                                       6

<PAGE>

     Participant is an active employee for 15 days or more in that month. The
     resulting reduced number of Performance Units shall be considered vested
     and payment made to the Participant following the final valuation of the
     Plan as described in Section V, provided that the Company reserves the
     right to cancel such Performance Units if the Participant, prior to the end
     of the applicable performance period, (i) performs any services, whether
     as an employee, officer, director, agent, independent contractor, partner
     or otherwise, for a competitor of the Company or any of its affiliates
     without the consent of the Administrator, as defined below, or (ii) takes
     any other action, including, but not limited to, interfering with the
     relationship between the Company or any of its affiliates and any of its
     employees, clients or agents, which is intended to damage or does damage to
     the business or reputation of the Company.

     The portion of any Performance Units reduced pursuant to the first sentence
     of this section (and therefore not payable to a Participant under any
     circumstances) shall be canceled and shall not be payable. In addition, if
     a Participant fails to comply with the conditions of payment, the pro-rated
     Performance Units shall also be canceled and shall not be payable.

C.   Death - If a Participant dies during the performance period, the number of
     -----
     Performance Units granted will be reduced by multiplying the grant by a
     fraction, the numerator of which is the number of full months in the
     performance period during which the Participant was an active employee and
     the denominator of which is the number of months in the performance period
     (36). A partial month worked shall be counted as a full month if the
     Participant is an active employee for 15 days or more in that month. The
     resulting reduced number of Performance Units shall be considered vested
     and payment made to the Participant's estate following the final valuation
     of the Plan as described in Section V. If the Performance Units are reduced
     pursuant to this paragraph, the portion of the Performance Units eliminated
     shall be canceled and shall not be payable.

D.   Disability - If, prior to the payment of the Performance Units, a
     ----------
     Participant's employment is terminated as a result of the Participant's
     inability to perform the basic requirement of his or her position due to
     physical or mental incapacity and after the Participant's short-term
     disability benefits have expired under the terms of The Prudential Welfare
     Benefits plan, the number of Performance Units granted to the Participant
     will be reduced by multiplying the grant by a fraction, the numerator of
     which is the number of full months in the performance period during which
     the Participant was an active employee and the denominator of which is the
     number of months in the performance period (36). The period of time that
     the employee was on Short Term Disability shall be counted as active
     employment. A partial month worked shall be counted as a full month if the
     Participant is an active employee for 15 days or more in that month. The
     resulting reduced number of Performance Units shall be considered vested
     and payment made to the Participant following the final valuation of the
     Plan as described in Section V. If the Performance Units are reduced

                                       7
<PAGE>

     pursuant to this paragraph, the portion of the Performance Units eliminated
     shall be canceled and shall not be payable.

E.   Involuntary Termination of Employment - If a Participant's employment is
     -------------------------------------
     terminated prior to the payment of the Performance Units by reason of
     involuntary termination of employment for reasons other than those
     described in Section VI A-D above, the Performance Units granted will be
     canceled and the Participant shall receive no payment from the Plan. The
     Compensation Committee may, in its discretion, award a partial payment to
     such Participant which is not paid from Plan allocations. This payment will
     be based on the number of full months in the performance period that the
     Participant was an active employee and on the progress towards the
     cumulative performance measures in Section IV as of the Participant's
     termination of employment. In no event is a Participant who terminates from
     employment for reasons described in this paragraph to receive a payment
     greater than that computed had the planned Cumulative Operating Earnings
     amount been met, even if actual Cumulative Operating Earnings and/or actual
     Cumulative Operating Margin exceeds the planned amount.

VII. Plan Funding
-----------------

The Plan shall at all times be unfunded and no provision shall at any time be
made with respect to segregating any assets of the Company or an affiliate for
payment of any benefits under the Plan. The right of a Participant to receive
payment under the Plan shall be an unsecured claim against the general assets of
the Company or an affiliate, and neither the Participant nor any other person
shall have any rights in or against any specific assets of the Company or an
affiliate. The Company and any affiliate may establish a reserve of assets to
provide funds for payments under the Plan.

VIII. Plan Administration
-------------------------

The Compensation Committee shall be the administrator of the Plan. With respect
to its authority to award or cancel payments under the Plan to Participants
whose employment is terminated, its authority to grant Performance Units to
eligible new or promoted employees below the Senior Vice President level, and
with regard to the participation in the Plan of persons who are below the level
of Senior Vice President, the Plan shall be administered by the Prudential
Executive Vice President, Human Resources or, to the extent that the Prudential
Executive Vice President, Human Resources deems appropriate, to the Vice
President, Total Compensation. The Compensation Committee, the Prudential
Executive Vice President, Human Resources or the Vice President, Total
Compensation, as applicable, shall be referred to as the Administrator. The
Administrator shall administer the Plan in accordance with its terms and shall
have the discretion and authority necessary in the administration of the Plan,
including the authority to interpret the Plan, to make factual determinations
under the Plan and to determine Plan payments and allocations. The Administrator
shall have the discretion and authority to adopt and revise rules and procedures
relating to the Plan, to correct any

                                       8
<PAGE>

defect or omission or reconcile any inconsistency in this Plan or any payment
hereunder, and to make any other determinations that it believes necessary or
advisable in the administration of the Plan. Determinations and decisions by the
Administrator shall be final and binding on all employees, Participants and all
other persons.

IX. Revocation, Amendment, and Termination
------------------------------------------

The Compensation Committee may, in its sole discretion, at any time and from
time to time amend, modify, suspend, or terminate this Plan, in whole or in
part, without notice to or the consent of any Participant or employee. This Plan
may be amended or terminated by resolution of the Compensation Committee and by
execution of a written instrument by a duly authorized officer of the Company.

X. Limitation On Liability
--------------------------

The liability of the Company or any affiliate under this Plan is limited to the
obligations expressly set forth in the Plan, and no term or provision of this
Plan may be construed to impose any further or additional duties, obligations,
or costs on the Company, an affiliate or the Compensation Committee not
expressly set forth in the Plan.

XI. No Contract of Employment
-----------------------------

The existence of this Plan, as in effect at any time or from time to time, or
any grant of Performance Units under the Plan shall not be deemed to constitute
a contract of employment between Prudential, or an affiliate, and any employee
or Participant, nor shall it constitute a right to remain in the employ of
Prudential or an affiliate. Employment with Prudential or an affiliate is
employment-at-will and either party may terminate the Participant's employment
at any time, for any reason, with or without cause or notice.

XII. No Right to Participate
----------------------------

Except as provided in Sections II and III, no Participant or other employee
shall at any time have a right to be selected for participation in the Plan,
despite having previously participated in an incentive or bonus plan of the
Company or an affiliate.

XIII. No Limitations on Corporate Actions
-----------------------------------------

Nothing contained in this Plan shall be construed to prevent the Company, or any
affiliate, from taking any corporate action which is deemed by it to be
appropriate, or in its best interest, whether or not such action would have an
adverse effect on this Plan, or any awards made under this Plan. No employee,
beneficiary, or other person, shall have any claim against the Company, or any
of its affiliates, as a result of any such action.

                                       9
<PAGE>

XIV. Facilitation of Payments
-----------------------------

Notwithstanding anything else in this Plan to the contrary, in the event that a
payment is due to an employee, or former employee (or a beneficiary thereof),
under this Plan and the recipient is a minor, mentally incompetent, or otherwise
incapacitated, such payment shall be made to the recipient's legal
representative, or guardian. If there is no such legal representative, or
guardian, Prudential, in its sole discretion, may direct that payment be made to
any person Prudential, in its sole discretion, believes, by reason of a family
relationship, or otherwise, will apply. Upon such payment, for the benefit of
the recipient, the Company and each of its affiliates shall be fully discharged
of all obligations therefor.

XV. Addresses; Missing Recipients
---------------------------------

A recipient of any payment under this Plan who is not a current employee of the
Company, or an affiliate, shall have the obligation to inform the Company of his
or her current address, or other location to which payments are to be sent.
Neither the Company nor any affiliate shall have any liability to such
recipient, or any other person, for any failure of such recipient, or person, to
receive any payment if it sends such payment to the address provided by such
recipient by first class mail, postage paid, or other comparable delivery
method. Notwithstanding anything else in this Plan to the contrary, if a
recipient of any payment cannot be located within 120 days following the date on
which such payment is due after reasonable efforts by the Company or an
affiliate, such payments and all future payments owing to such recipient shall
be forfeited without notice to such recipient. If, within two years (or such
longer period as Prudential, in its sole discretion, may determine), after the
date as of which payment was forfeited (or, if later, is first due), the
recipient, by written notice to the Company, requests that such payment and all
future payments owing to such recipient be reinstated and provides satisfactory
proof of their identity, such payments shall be promptly reinstated. To the
extent the due date of any reinstated payment occurred prior to such
reinstatement, such payment shall be made to the recipient (without any interest
from its original due date) within 90 days after such reinstatement.

XVI. Taxes
----------

The Company or an affiliate shall have the right to deduct from all payments
under the Plan any federal, state, or local taxes required by law to be withheld
with respect to such payments.

XVII. Successors
----------------

All obligations of the Company and any affiliate under the Plan shall be binding
upon and inure to the benefit of any successor to the Company or such affiliate,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, demutualization or otherwise.

                                       10
<PAGE>

XVIII. Captions
---------------

The headings and captions appearing herein are inserted only as a matter of
convenience. They do not define, limit, construe, or describe the scope or
intent of the provisions of the Plan.

XIX. Third Parties
------------------

Nothing expressed or implied in this Plan is intended or may be construed to
give any person other than eligible Participants any rights or remedies under
this Plan.

XX. Non-Alienation Provision
----------------------------

Subject to the provisions of applicable law, no interest of any person or entity
in any long term incentive award, or right to receive any long term incentive
award or any distribution or other benefit under the Plan shall be subject in
any manner to sale, transfer, assignment, pledge, attachment, garnishment, or
other alienation or encumbrance of any kind; nor may such interest in any long
term incentive award, or right to receive any long term incentive award or any
distribution or any benefit under the Plan be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other obligations or
claims against, such person or entity, including (but not limited to) claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.

                                      11<PAGE>

                                                                    Exhibit 10.8

                                     2000
                                     ----
                             Prudential Long-Term
                             --------------------
                             Performance Unit Plan
                             ---------------------

                                  April 2000

 The Compensation Committee may, in its sole discretion, at any time and from
time to time amend, modify, suspend or terminate this Plan, in whole or in part,
         without notice to or consent of any Participant or employee.

<PAGE>

                               Table of Contents
                               -----------------

 . I.       Program Concept

 . II.      Eligibility

 . III.     Granting of Performance Units

 . IV.      Performance Measurement

 . V.       Final Valuation and Payment

 . VI.      Termination of Employment

 . VII.     Plan Funding

 . VIII.    Plan Administration

 . IX.      Revocation, Amendment, and Termination

 . X.       Limitation on Liability

 . XI.      No Contract on Employment

 . XII.     No Right to Participate

 . XIII.    No Limitations on Corporate Actions

 . XIV.     Facilitation of Payments

 . XV.      Addresses; Missing Recipients

 . XVI.     Taxes

 . XVII.    Successors

 . XVIII.   Captions

 . XIX.     Third Parties

 . XX.      Non-Alienation Provision

Appendix A - Illustration of 2000 Funding Potential

                                       2

<PAGE>

I. Program Concept
------------------

The Prudential Long-term Performance Unit Plan ("the Plan") has been developed
to recognize and reward the contributions that Participants will make towards
The Prudential Insurance Company of America's ("Prudential" or "the Company")
long-term growth and success.

The Long-Term Performance Unit Plan is one of the four elements of Total
Compensation applicable to designated Executives in Prudential. The other
elements are: Base Salary, Annual Incentive Award, and Benefits/Perquisites.
The Long-Term Incentive Award is designed to focus attention on the importance
of sustained company performance over a period of years as well as to assist in
the retention of eligible employees.

II. Eligibility
---------------

Employees at the Department Vice President or equivalent level and above are
eligible to participate in this Plan ("Participants"). In addition, the
Compensation Committee retains the discretion to add certain individuals below
the rank of Department Vice President as Participants under the Plan, provided
the Committee determines (i) that such individuals are included in a select
group of management or highly compensated employees of the Company and (ii) that
making such individuals Participants under the Plan is in the best interests of
the Company.

III. Granting of Performance Units
----------------------------------

Participants will be eligible for an annual grant of Performance Units. The
decision to grant Performance Units and the number of Performance Units granted
to Plan Participants will be at the discretion of the Compensation Committee.
However, significant emphasis will be given to the individual's performance,
market considerations, internal guidelines and the number of Performance Units
available for grant in arriving at the number to be granted, if any.

The 2000 Performance Units grants will be valued based upon Company performance
from January 1, 2000 through December 31, 2002 (the "performance period"). There
are, in total, 100,000 Performance Units available for grant in the 2000 Plan.
Each Performance Unit will be valued at 1/100,000th of the amount allocated to
the Plan at the end of the performance period.

A limited number of Performance Units are normally held in reserve to
accommodate new hires and promotions during the year as well as other special
circumstances. The number of Performance Units granted to new hires and those
receiving promotions during 2000 shall be at the discretion of the Compensation
Committee.

                                       3
<PAGE>

IV. Performance Measurement
---------------------------

The value of the Performance Units at the end of the performance period will be
determined by two principal performance measurements: 1) Cumulative Operating
Earnings; and 2) Cumulative Operating Margin achieved over the three year
performance period.

Operating Earnings is defined as Income Before Tax, Capital Gains, Remediation
Expenses, Restructuring Reserves, Market Standards and Demutualization Expenses.
Capital Gains are net of the Loss Recognition Reserve and the Deferred
Acquisition Cost (DAC) Amortization for Capital Gains. Operating Margin is
Operating Earnings as defined, divided by Revenue, as defined, for the same
period, expressed as a percentage. Revenue is defined as all items in the
Revenue section of a GAAP income statement, including but not limited to
Premiums, Policy Charges and Fees, Net Investment Income and Other Revenue, but
excluding Realized Gain or Losses. The planned Cumulative Operating Earnings is
$8.734 billion and the planned Cumulative Operating Margin is 10.33%. In the
event of a subsequent change in accounting methodology or significant
acquisition or divestiture, the above will be reviewed and amended as
appropriate.

The value of the Performance Units at the end of the performance period
depends on the amount allocated to the Plan. When threshold performance is
achieved, $39 million will be allocated to the Plan. Threshold performance is
achievement of 75% of planned Cumulative Operating Earnings amount, or $6.551
billion. If threshold performance is not achieved, allocation to the Plan will
not be made. For any additional Cumulative Operating Earnings above the
threshold, 1.78% of the incremental amount will be allocated to the Plan (the
Basic Allocation Rate). When Cumulative Operating Earnings exceeds the planned
amount, or $8.734 billion, an additional 1.17% of the amount in excess of the
planned amount will be allocated to the Plan (the Premium Allocation Rate). The
amount allocated to the Plan as a result of Cumulative Operating Earnings is not
subject to any cap or maximum.

The allocation formulae described above (i.e., the 1.78% or 1.17%) will be
increased by 0.117% for every 10% improvement in Cumulative Operating Margin
over the planned Cumulative Operating Margin. Partial percentage increases will
be prorated. The maximum increase is 0.585%, which corresponds to a 50%
improvement in Cumulative Operating Margin over plan. This increase in the
allocation rate(s) is called the Operating Margin Adjustment Factor. No negative
adjustment will be made if the planned Cumulative Operating Margin is not
achieved. The Operating Margin Adjustment Factor will only have a positive
impact on the total amount allocated to the Plan.

To ensure that other critical performance factors are also given consideration
and reflected in the final Plan allocation, the Compensation Committee may,
under normal circumstances, adjust the total amount allocated to the Plan by up
to plus or minus 15%. When considering this adjustment, the Compensation
Committee will take into account such financial and non-financial factors as
change in market share, expansion of new

                                       4

<PAGE>

distribution channels, overall changes in financial rating, reputation of
management, customer satisfaction, employee satisfaction and change in most
admired company status. In the event of circumstances that the Compensation
Committee deems extraordinary, the Compensation Committee reserves the right to
make any additional adjustment to the total amount allocated.

The following are three illustrations of how the amount allocated can
potentially be impacted by Cumulative Operating Earnings and Cumulative
Operating Margin. For purposes of the illustrations the calculated amounts have
been rounded. For a summary of the funding potential, refer to Appendix A of
this document.

Example 1:
----------
Cumulative Operating Earnings Achieved = $9.611 billion or $3.06 billion above
threshold Cumulative Operating Margin Achieved = 11.4% or 10% above plan

<TABLE>
<S>                                <C>                                        <C>
Threshold Allocation Amount                                                   $39 million
Basic Allocation Rate Amount       ($9.611b - $6.551b) X (1.78% + 0.117%)     $58 million
Premium Allocation Rate Amount     ($9.611b - $8.734b) X (1.17% + 0.117%)     $11 million
                                                                            -------------
Total Amount allocated                                                       $108 million
                                                                            =============
</TABLE>

Example 2:
----------
Cumulative Operating Earnings Achieved = $9.611 billion or $3.06 billion above
threshold Cumulative Operating Margin Achieved = 9.3% or 10% below plan

Threshold Allocation Amount                                        $39 million
Basic Allocation Rate Amount       ($9.611b - $6.551b) X 1.78%     $55 million
Premium Allocation Rate Amount     ($9.611b - $8.734b) X 1.17%     $10 million
                                                                 -------------
Total Amount allocated                                            $104 million
                                                                 =============

Example 3:
----------
Cumulative Operating Earnings Achieved = $8.734 billion or $2.183 billion above
threshold
Cumulative Operating Margin Achieved = 12.4% or 20% above plan

<TABLE>
<S>                                <C>                                        <C>
Threshold Allocation Amount                                                   $39 million
Basic Allocation Rate Amount       ($8.734b - $6.551b) X (1.78% + 0.234%)     $44 million
Premium Allocation Rate Amount     ($8.734b - $8.734b) X (1.17% + 0.234%)      $0 million
                                                                            -------------
Total Amount allocated                                                        $83 million
                                                                            =============
</TABLE>

                                       5

<PAGE>

V. Final Valuation and Payment
------------------------------

At the close of the performance period, the amount allocated to the Plan
pursuant to the allocation formulae will be calculated and presented to the
Compensation Committee for review and possible adjustment. When the final amount
to be allocated is approved by the Compensation Committee, Corporate
Compensation will compute the individual payment for each Participant based on
the number of Performance Units granted to the Participant. When the amount to
be paid each Participant under the Plan is computed, the Company will pay such
amounts in a single sum to Participants who are on the active payroll on the
date of payment. At the option of the Company or an affiliate, up to one-half of
the amount payable may be paid in equivalent number of publicly traded Common
Shares of the Company if they are available and legally permissible at that
time. Any 2000 Performance Unit not granted or any Performance Unit canceled
under the circumstances described below, and not re-granted to other
Participants, shall not be paid to any Participant and any Plan allocation not
paid to the Participants shall revert to the Company.

Payments made under this Plan will not be taken into account in determining
benefits or contribution amounts under any employee benefit plan of the Company
or any of its affiliates.

VI. Termination of Employment
-----------------------------

If employment is terminated prior to the payment of the Performance Units,
treatment of the Performance Units will be as follows.

A. Discharge, Voluntary Termination, or Competing Business - If, prior to the
   -------------------------------------------------------
   payment of the Performance Units, the Participant is separated from
   employment for cause, as determined by the Compensation Committee, or the
   Participant engages in any business that is directly or indirectly
   competitive with or detrimental to the interests of Prudential as determined
   by the Compensation Committee, or if, before the end of the performance
   period, the Participant resigns or otherwise terminates employment under
   circumstances not described in Section VI B-E below, the Participant's
   Performance Units shall be canceled and the Participant shall receive no
   payment under this Plan. Canceled Performance Units may be granted to other
   Participants.

B. Retirement - Subject to compliance with the conditions outlined below, if
   ----------
   during the performance period, a Participant separates from employment by
   reason of retirement upon or after qualifying to retire (whether at early or
   normal retirement) under the terms and conditions of any pension plan
   sponsored by the Company or an affiliate in which the Participant
   participates, the number of Performance Units granted will be reduced by
   multiplying the grant by a fraction, the numerator of which is the number of
   full months in the performance period during which the Participant was an
   active employee and the denominator of which is the number of months in the
   performance

<PAGE>

   period (36). A partial month worked shall be counted as a full month if the
   Participant is an active employee for 15 days or more in that month. The
   resulting reduced number of Performance Units shall be considered vested and
   payment made to the Participant following the final valuation of the Plan as
   described in Section V, provided that the Company reserves the right to
   cancel such Performance Units if the Participant, prior to the end of the
   applicable performance period, (i) performs any services, whether as an
   employee, officer, director, agent, independent contractor, partner or
   otherwise, for a competitor of the Company or any of its affiliates without
   the consent of the administrator, as defined below, or (ii) takes any other
   action, including, but not limited to, interfering with the relationship
   between the Company or any of its affiliates and any of its employees,
   clients or agents, which is intended to damage or does damage to the business
   or reputation of the Company.

   The portion of any Performance Units reduced pursuant to the first sentence
   of this section (and therefore not payable to a Participant under any
   circumstances) shall be canceled and shall not be payable. In addition, if a
   Participant fails to comply with the conditions of payment, the pro-rated
   Performance Units shall also be canceled and shall not be payable.

C. Death - If a Participant dies during the performance period, the number of
   -----
   Performance Units granted will be reduced by multiplying the grant by a
   fraction, the numerator of which is the number of full months in the
   performance period during which the Participant was an active employee and
   the denominator of which is the number of months in the performance period
   (36). A partial month worked shall be counted as a full month if the
   Participant is an active employee for 15 days or more in that month. The
   resulting reduced number of Performance Units shall be considered vested and
   payment made to the Participant's estate following the final valuation of the
   Plan as described in Section V. If the Performance Units are reduced pursuant
   to this paragraph, the portion of the Performance Units eliminated shall be
   canceled and shall not be payable.

   Disability - If, prior to the payment of the Performance Units, a
   ----------
   Participant's employment is terminated as a result of the Participant's
   inability to perform the basic requirement of his or her position due to
   physical or mental incapacity and after the Participant's short-term
   disability benefits have expired under the terms of The Prudential Welfare
   Benefits plan, the number of Performance Units granted to the Participant
   will be reduced by multiplying the grant by a fraction, the numerator of
   which is the number of full months in the performance period during which the
   Participant was an active employee and the denominator of which is the number
   of months in the performance period (36). The period of time that the
   employee was on Short Term Disability shall be counted as active employment.
   A partial month worked shall be counted as a full month if the Participant is
   an active employee for 15 days or more in that month. The resulting reduced
   number of Performance Units shall be considered vested and payment made to
   the Participant following the final valuation of the Plan as described in
   Section V. If the Performance Units are reduced

                                       7
<PAGE>

      pursuant to this paragraph, the portion of the Performance Units
      eliminated shall be canceled and shall not be payable.

E.    Involuntary Termination of Employment - If a Participant's employment is
      -------------------------------------
      terminated prior to the payment of the Performance Units by reason of
      involuntary termination of employment for reasons other than those
      described in Section VI A-D above, the Performance Units granted will be
      canceled and the Participant shall receive no payment from the Plan. The
      Compensation Committee may, in its discretion, award a partial payment to
      such Participant which is not paid from Plan allocations. This payment
      will be based on the number of full months in the performance period that
      the Participant was an active employee and on the progress towards the
      cumulative performance measures in Section IV as of the Participant's
      termination of employment. In no event is a Participant who terminates
      from employment for reasons described in this paragraph to receive a
      payment greater than that computed had the planned Cumulative Operating
      Earnings amount been met, even if actual Cumulative Operating Earnings
      and/or actual Cumulative Operating Margin exceeds the planned amount.

VII. Plan Funding
-----------------

The Plan shall at all times be unfunded and no provision shall at any time be
made with respect to segregating any assets of the Company or an affiliate for
payment of any benefits under the Plan. The right of a Participant to receive
payment under the Plan shall be an unsecured claim against the general assets of
the Company or an affiliate, and neither the Participant nor any other person
shall have any rights in or against any specific assets of the Company or an
affiliate. The Company and any affiliate may establish a reserve of assets to
provide funds for payments under the Plan.

VIII. Plan Administration
-------------------------

The Compensation Committee shall be the administrator of the Plan. With respect
to its authority to award or cancel payments under the Plan to Participants
whose employment is terminated, its authority to grant Performance Units to
eligible new or promoted employees below the Senior Vice President level, and
with regard to the participation in the Plan of persons who are below the level
of Senior Vice President, the Plan shall be administered by the Prudential
Executive Vice President, Human Resources or, to the extent that the Prudential
Executive Vice President, Human Resources deems appropriate, to the Vice
President, Total Compensation. The Compensation Committee, the Prudential
Executive Vice President, Human Resources or the Vice President, Total
Compensation, as applicable, shall be referred to as the Administrator. The
Administrator shall administer the Plan in accordance with its terms and shall
have the discretion and authority necessary in the administration of the Plan,
including the authority to interpret the Plan, to make factual determinations
under the Plan and to determine Plan payments and allocations. The Administrator
shall have the discretion an authority to adopt and revise rules and procedures
relating to the Plan, to correct any

                                       8

<PAGE>

defect or omission or reconcile any inconsistency in this Plan or any payment
hereunder, and to make any other determinations that it believes necessary or
advisable in the administration of the Plan. Determinations and decisions by the
Administrator shall be final and binding on all employees. Participants and all
other persons.

IX. Revocation, Amendment and Termination
-----------------------------------------

The Compensation committee may, in its sole discretion, at any time and from
time to time amended, modify, suspend, or terminate this Plan, in whole or in
part, without notice to or the consent of any Participant or employee. This Plan
may be amended or terminated by resolution of the Compensation Committee and by
execution of a written instrument by a duly authorized officer of the Company.

X. Limitation On Liability
--------------------------

The liability of the Company or any affiliate under this Plan is limited to the
obligations expressly set forth in the Plan, and no term or provision of this
Plan may be construed to impose any further or additional duties, obligations,
or costs on the Company, an affiliate or the Compensation Committee not
expressly set forth in the Plan.

XI. No Contract of Employment
-----------------------------

The existence of this Plan, as in effect at any time or from time to time, or
any grant of Performance Units under the Plan shall not be deemed to constitute
a contract of employment between Prudential, or an affiliate, and any employee
or Participant, nor shall it constitute a right to remain in the employ of
Prudential or an affiliate. Employment with Prudential or an affiliate is
employment-at-will and either party may terminate the Participant's employment
at any time, for any reason, with or without cause or notice.

XII. No Right to Participate
----------------------------

Except as provided in Sections II and III, no Participant or other employee
shall at any time have a right to be selected for participation in the Plan,
despite having previously participated in an incentive or bonus of the Company
or an affiliate.

XIII. No Limitation on Corporate Actions
----------------------------------------

Nothing contained in this Plan shall be construed to prevent the Company, or any
affiliate, from taking any corporate action which is deemed by it to be
appropriate, or in its best interest, whether or not such action would have an
adverse effect on this Plan, or any awards made under this Plan. No employee,
beneficiary, or other person, shall have any claim against the Company, or any
of its affiliates, as a result of any such action.

<PAGE>

XIV.  Facilitation of Payments
------------------------------

Notwithstanding anything else in this Plan to the contrary, in the event that
a payment is due to an employee, or former employee (or a beneficiary thereof),
under this Plan and the recipient is a minor, mentally incompetent, or otherwise
incapacitated, such payment shall be made to the recipient's legal
representative, or guardian. If there is no such legal representative, or
guardian, Prudential, in its sole discretion, may direct that payment be made to
any person Prudential, in its sole discretion, believes, by reason of a family
relationship, or otherwise, will apply. Upon such payment, for the benefit of
the recipient, the Company and each of its affiliates shall be fully discharged
of all obligations therefor.

XV.  Addresses; Missing Recipients
----------------------------------

A recipient of any payment under this Plan who is not a current employee of the
Company, or an affiliate, shall have the obligation to inform the Company of his
or her current address, or other location to which payments are to be sent.
Neither the Company nor any affiliate shall have any liability to such
recipient, or any other person, for any failure of such recipient, or person, to
receive any payment if it sends such payment to the address provided by such
recipient by first class mail, postage paid, or other comparable delivery
method. Notwithstanding anything else in this Plan to the contrary, if a
recipient of any payment cannot be located within 120 days following the date on
which such payment is due after reasonable efforts by the Company or an
affiliate, such payments and all future payments owing to such recipient shall
be forfeited without notice to such recipient. If, within two years (or such
longer period as Prudential, in its sole discretion, may determine), after the
date as of which payment was forfeited (or, if later, is first due), the
recipient, by written notice to the Company, requests that such payment and all
future payments owing to such recipient be reinstated and provides satisfactory
proof of their identity, such payments shall be promptly reinstated. To the
extent the due date of any reinstated payment occurred prior to such
reinstatement, such payment shall be made to the recipient (without any interest
from its original due date) within 90 days after such reinstatement.

XVI.  Taxes
-----------

The Company or an affiliate shall have the right to deduct from all payments
under the Plan any federal, state, or local taxes required by law to be withheld
with respect to such payments.

XVII. Successors
----------------
All obligations of the Company and any affiliate under the Plan shall be binding
upon and inure to the benefit of any successor to the Company or such affiliate,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, demutualization or otherwise.

                                      10

<PAGE>

XVIII. Captions
---------------

The headings and captions appearing herein are inserted only as a matter of
convenience. They do not define, limit, construe, or describe the scope or
intent of the provisions of the Plan.

XIX. Third Parties
------------------

Nothing expressed or implied in this Plan is intended or may be construed to
give any person other than eligible Participants any rights or remedies under
this Plan.

XX. Non-Alienation Provision
----------------------------

Subject to the provisions of applicable law, no interest of any person or entity
in any long term incentive award, or right to receive any long term incentive
award or any distribution or other benefit under the Plan shall be subject in
any manner to sale, transfer, assignment, pledge, attachment, garnishment, or
other alienation or encumbrance of any kind; nor may such interest in any long
term incentive award, or right to receive any long term incentive award or any
distribution or any benefit under the Plan be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other obligations or
claims against, such person or entity, including (but not limited to) claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.

                                      11
<PAGE>

Appendix A

Illustration of 2000 Funding Potential at $8.734B of Operating Earnings & Target
of $78M
--------------------------------------------------------------------------------

                                    [CHART]

--------------------------------
-----Plan Operating Margin + 50%
-----Plan Operating Margin + 40%
-----Plan Operating Margin + 30%
-----Plan Operating Margin + 20%
-----Plan Operating Margin + 10%
-----Plan Operating Margin
--------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                           Plan         Plan          Plan            Plan               Plan
  Results                 At Plan       Operating      Operating    Operating       Operating          Operating
   Above                 Operating       Margin +      Margin +     Margin +         Margin +           Margin +
 Threshold        %       Margin           10%          20%            30%             40%                50%
($ billions)  of Plans  ($ millions)   ($ millions)  ($ millions)  ($ millions)    ($ millions)       ($ millions)
------------------------------------------------------------------------------------------------------------------
<S>            <C>        <C>            <C>           <C>          <C>               <C>              <C>
  $0.000        75%        $39             $39          $39          $39               $39              $39
  $0.437        80%        $47             $47          $48          $48               $49              $49
  $0.873        85%        $55             $56          $57          $58               $59              $60
  $1.310        90%        $62             $64          $65          $67               $68              $70
  $1.747        95%        $70             $72          $74          $76               $78              $80
  $2.184       100%        $78             $80          $83          $86               $88              $91
  $3.057       110%       $104            $108         $113         $117              $122             $127
  $3.930       120%       $129            $136         $143         $149              $156             $163
  $4.804       130%       $155            $164         $173         $181              $190             $199
  $5.677       140%       $181            $192         $202         $213              $224             $235
  $6.551       150%       $207            $219         $232         $245              $258             $271
  $7.424       160%       $232            $247         $262         $277              $292             $307
   $8.30       170%       $258            $275         $292         $309              $326             $343
   $9.17       180%       $284            $303         $322         $341              $360             $379
  $10.04       190%       $310            $331         $352         $373              $394             $414
  $10.92       200%       $336            $359         $382         $404              $427             $450
</TABLE>

<TABLE>
<CAPTION>

                Plan
            Oper. Earn.*                                                                          Plan*
           ----------------                                                                   -------------
  <S>          <C>                                      <C>                                      <C>
   2000        $2,488                                   Plan Operating Earnings                   $8,734
   2001        $2,863                                   75% Threshold                             $6,551
   2002        $3,383
           ----------------
  Total        $8,734                                   Basic Allocation Funding Rate             1.780%
           ================                             Premium Allocation Funding Rate           1.170%

                Plan
               Revenue*                                 Plan Operating Margin                     10.33%
           ----------------
   2000        $26,311
   2001        $27,948                                  Funding rates will increases .117% for every 10% increase in Operating
   2002        $30,325                                  Margin above plan to a maximum of .585%.
           ---------------
Total          $84,584
           ===============
</TABLE>

*in millions

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]