Document:

<PAGE>

                                                                    Exhibit 10.9

                                     1999
                                     ----
                             Prudential Long-Term
                             --------------------
                             Performance Unit Plan
                             ---------------------

                                 November 1999

 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 1999 Funding Potential

                                       2
<PAGE>

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

The 1999 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 1999 Performance Unit grants will be valued based upon Company performance
from January 1, 1999 through December 31, 2001 (the "performance period"). There
are, in total, 100,000 Performance Units available for grant in the 1999 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 1999 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 Gains or Losses. The planned Cumulative Operating Earnings is
$7.951 billion and the planned Cumulative Operating Margin is 9.55%. 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 $5.963 billion. If
threshold performance is not achieved, allocation to the Plan will not be made.
For any additional Cumulative Operating Earnings above the threshold, 1.96% of
the incremental amount will be allocated to the Plan (the Basic Allocation
Rate). When Cumulative Operating Earnings exceeds the planned amount, or $7.951
billion, an additional 1.28% 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 fomulae described above (i.e., the 1.96% or 1.28%) will be
increased by 0.128% for every 10% improvement in Cumulative Operating Margin
over the planned Cumulative Operating Margin. Partial percentage increases will
be prorated. The maximum increase is 0.64%, 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 = $8.743 billion or $2.78 billion above
threshold
Cumulative Operating Margin Achieved = 10.5% or 10% above plan

<TABLE>

<S>                            <C>                                    <C>
Threshold Allocation Amount                                            $39 million
Basic Allocation Rate Amount   ($8.743b - $5.96b) X (1.96% + 0.128%)   $58 million
Premium Allocation Rate Amount ($8.743b - $7.95b) X (1.28% + 0.128%)   $11 million
                                                                      ------------
Total Amount allocated                                                $108 million
                                                                      ============
</TABLE>

Example 2:
----------
Cumulative Operating Earnings Achieved = $8.743 billion or $2.78 billion above
threshold
Cumulative Operating Margin Achieved = 8.595% or 10% below plan

<TABLE>

<S>                            <C>                                    <C>
Threshold Allocation Amount                                            $39 million
Basic Allocation Rate Amount   ($8.743b - $5.96b) X 1.96%              $55 million
Premium Allocation Rate Amount ($8.743b - $7.95b) X 1.28%              $10 million
                                                                      ------------
Total Amount allocated                                                $104 million
                                                                      ============
</TABLE>
Example 3:
----------
Cumulative Operating Earnings Achieved = $7.95 billion or $1.99 billion above
threshold
Cumulative Operating Margin Achieved = 11.46% or 20% above plan

<TABLE>

<S>                            <C>                                    <C>
Threshold Allocation Amount                                            $39 million
Basic Allocation Rate Amount   ($7.95b - $5.96b) X (1.96% + 0.256%)    $44 million
Premium Allocation Rate Amount ($7.95b - $7.95b) X (1.28% + 0.256%)     $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 publicly traded Common
Shares of the Company if they are available and legally permissible at that
time. Any 1999 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 is 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

                                       6
<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 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>

XVI. 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 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 1999 Funding Potential at $7.951B of Operating Earnings & Target
--------------------------------------------------------------------------------
of $78M
-------

<TABLE>
<CAPTION>
                                                              [CHART]

                                                     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 Plan      ($ millions)      ($ millions)      ($ millions)      ($ millions)      ($ millions)     ($ millions)
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>          <C>               <C>               <C>               <C>                <C>              <C>
   $0.00            75%             $39              $39               $39                $39              $39              $39
   $0.40            80%             $47              $47               $48                $48              $49              $49
   $0.80            85%             $55              $56               $57                $58              $59              $60
   $1.19            90%             $62              $64               $65                $67              $68              $70
   $1.59            95%             $70              $72               $74                $76              $78              $80
   $1.99           100%             $78              $81               $83                $86              $88              $91
   $2.78           110%            $104             $108              $113               $117             $122             $127
   $3.58           120%            $129             $136              $143               $149             $156             $163
   $4.37           130%            $155             $164              $173               $181             $190             $198
   $5.17           140%            $181             $192              $202               $213             $224             $234
   $5.96           150%            $207             $219              $232               $245             $258             $270
   $6.76           160%            $233             $247              $262               $277             $292             $306
   $7.55           170%            $258             $275              $292               $309             $325             $342
   $8.35           180%            $284             $303              $322               $341             $359             $378
   $9.14           190%            $310             $331              $352               $372             $393             $414
   $9.94           200%            $336             $358              $381               $404             $427             $450
</TABLE>

          Plan
       Oper. Earn.*                                           Plan*
       -----------                                          ---------
1999     $2,109             Plan Operating Earnings           $7,951
2000     $2,657             75% Threshold                     $5,963
2001     $3,185
       -----------
Total    $7,951             Basic Allocation Funding Rate      1.96%
       ===========          Premium Allocation Funding Rate    1.28%

          Plan
         Revenue*           Plan Operating Margin              9.55%
       -----------
1999    $25,486
2000    $27,706             Funding rates will increase .128% for every 10%
2001    $30,063             increase in Operating Margin above plan to a
       -----------          maximum of .64%.
Total   $83,255
       ===========

* in millions<PAGE>

                                                                   Exhibit 10.10

                                 1998 Amended
                                 ------------
                             Prudential Long-Term
                             --------------------
                            Performance Unit Plan
                            ---------------------

                                November 1999

 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.     Taxes

 . XIV.      Successors

 . XV.       Captions

 . XVI.      Third Parties

 . XVII.     Non-Alienation Provision

Appendix A - Illustration of 1998 Funding Potential

                                       2
<PAGE>

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

The 1998 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 1998 Performance Unit grants will be valued based upon Company performance
from January 1, 1998 through December 31, 2000 (the "performance period"). There
are, in total, 100,000 Performance Units available for grant in the 1998 Plan.
Each Performance Unit will be valued at 1/100,000/th/ 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 1998 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 Gains or Losses. The planned Cumulative Operating Earnings is
$6.975 billion and the planned Cumulative Operating Margin is 8.99%. 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, $35
million will be allocated to the Plan. Threshold performance is achievement of
75% of planned Cumulative Operating Earnings amount, or $5.231 billion. If
threshold performance is not achieved, allocation to the Plan will not be made.
For any additional cumulative Operating Earnings above the threshold, 2.01% of
the incremental amount will be allocated to the Plan (the Basic Allocation
Rate). When Cumulative Operating Earnings exceeds the planned amount, or $6.975
billion, an additional 1.31% 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 2.01% or 1.31%) will be
increased by 0.131% for every 10% improvement in Cumulative Operating Margin
over the planned Cumulative Operating Margin. Partial percentage increases will
be prorated. The maximum increase is 0.655%, 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 for 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 = $7.671 billion or $2.44 billion above
threshold
Cumulative Operating Margin Achieved = 9.889% or 10% above plan
<TABLE>
<CAPTION>
<S>                              <C>                                            <C>
Threshold Allocation Amount                                                     $35 million
Basic Allocation Rate Amount     ($7.671b - $5.231b) X (2.01% + 0.131%)         $52 million
Premium Allocation Rate Amount   ($7.671b - $6.975b) X (1.31% + 0.131%)         $10 million
                                                                                -----------
Total Amount allocated                                                          $97 million
                                                                                ===========
</TABLE>

Example 2:
----------
Cumulative Operating Earnings Achieved =$7.671 billion or $2.44 billion above
threshold
Cumulative Operating Margin Achieved = 8.091% or 10% below plan

<TABLE>
<CAPTION>

<S>                             <C>                                             <C>
Threshold Allocation Amount                                                     $35 million
Basic Allocation Rate Amount    ($7.671b-$5.231b)X 2.01%                        $49 million
Premium Allocation Rate Amount  ($7.671b-$6.975b)X 1.31%                         $9 million
                                                                                -----------
Total Amount allocated                                                          $93 million
                                                                                ===========
</TABLE>

Example 3:
----------
Cumulative Operating Earnings Achieved = $6.975 billion or $1.744 billion above
threshold
Cumulative Operating Margin Achieved - 10.79% or 20% above plan

<TABLE>
<CAPTION>

<S>                             <C>                                             <C>
Threshold Allocation Amount                                                     $35 million
Basic Allocation Rate Amount    ($6.975b-$5.231b) X (2.01% + 0.262%)            $40 million
Premium Allocation Rate Amount  ($6.975b-$6.975b) X (1.31% + 0.262%)             $0 million
                                                                                -----------
Total Amount allocated                                                          $75 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, 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 1998
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
   -------------------------------------------------------
   end of the performance period, 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 Company sponsored
   pension plan 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 Participant is an active
   employee for 15 days or more in that month. The resulting

                                       6
<PAGE>

   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 a Participant qualifies for Long Term Disability 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). 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 pursuant to this paragraph, the portion of the
   Performance Units eliminated shall be canceled and shall not be payable.

                                       7
<PAGE>

E.  Involuntary Termination of Employment - If a Participant's employment is
    -------------------------------------
    terminated during the performance period by reason of involuntary
    termination of employment for reasons other than those described in Section
    VI A-D above, the number of 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 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,
and neither the Participant nor any other person shall have any rights in or
against any specific assets of the Company.  The Company 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 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.

                                       8
<PAGE>

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 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 or the Compensation Committee not expressly set forth in the Plan.

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

The establishment of this Plan, and amendment or modification to the Plan, or
any grant of Performance Units under the Plan shall not be deemed to constitute
a contract of employment between Prudential and any Participant, nor shall it
constitute a right to remain in the employ of Prudential. Employment with
Prudential is employment-at-will and either Prudential or a Participant may
terminate the Participant's employment with Prudential 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.

XIII. Taxes
-----------

The Company 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.

                                       9
<PAGE>

XIV. Successors
---------------

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

XV. 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.

XVI. 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.

XVII. Non-Alienation Provision
------------------------------

No interest of any person or entity in any Performance Units, or right to
receive Performance Units 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 or any kind; nor may
such interest in any Performance Units, or right to receive Performance Units 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.

                                      10
<PAGE>

Appendix A

Illustration of 1998 Funding Potential @ $6.975M Operating Earnings & Target of
-------------------------------------------------------------------------------
$70M
----

                                    [CHART]

<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 Plan  ($ millions)  ($ millions)  ($ millions)  ($ millions)  ($ millions)  ($ millions)
---------------------------------------------------------------------------------------------------------
<S>           <C>      <C>           <C>           <C>           <C>           <C>           <C>
        $0.0      75%           $35           $35           $35           $35           $35           $35
        $0.3      80%           $42           $42           $43           $43           $44           $44
        $0.7      85%           $49           $50           $51           $52           $53           $54
        $1.0      90%           $56           $57           $59           $60           $62           $63
        $1.4      95%           $63           $65           $67           $69           $70           $72
        $1.7     100%           $70           $72           $75           $77           $79           $81
        $2.4     110%           $93           $97          $101          $106          $110          $114
        $3.1     120%          $116          $122          $128          $134          $140          $146
        $3.8     130%          $140          $147          $155          $163          $171          $178
        $4.5     140%          $163          $172          $182          $191          $201          $211
        $5.2     150%          $186          $197          $209          $220          $232          $243
        $5.9     160%          $209          $222          $235          $249          $262          $275
        $6.6     170%          $232          $247          $262          $277          $292          $308
        $7.3     180%          $255          $272          $289          $306          $323          $340
        $8.0     190%          $278          $297          $316          $335          $353          $372
        $8.7     200%          $302          $322          $343          $363          $384          $404
---------------------------------------------------------------------------------------------------------
</TABLE>

             Plan
         Oper. Earn.*                                             Plan*
         ------------                                         ------------
1998        $1,919       Operating Earnings                      $6,975
1999        $2,293       Threshold @ 75%                         $5,231
2000        $2,763
         ------------
Total       $6,975       Basic Allocation Funding Rate           2.01%
         ============    Premium Allocation Funding Rate         1.31%

             Plan
            Revenue*     Plan Operating Margin                   8.99%
         ------------
1998        $24,785
1999        $25,525      Funding rates will increase .131% for every 10%
2000        $27,291      increase in Operating Margin above plan to a
         ------------    maximum of .655%.
Total       $77,601
         ============

* in millions

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