Document:

Prepared by R.R. Donnelley Financial -- Employment Agreement dated March 29, 2002

 March 29, 2002 
  
 Mr. Anthony Sanfilippo 
  
 Dear Tony: 

 
 Knight Trading Group, Inc. (“Knight”) is pleased to ask you to serve as its Interim Chief Executive Officer on the
following terms (the “Agreement”): 
  
 1.    Duties.    You will serve as the Interim Chief Executive Officer (“CEO”) or such other position or positions as may be agreed in writing between you and Knight and shall
perform such duties, services, and responsibilities incident to such position or positions as determined from time to time by the Board of Directors of Knight (the “Board”). You shall devote your full business time, attention, and skill to
the performance of such duties, services and responsibilities, and will use your best efforts to promote the interests of Knight. You shall not, without the prior written approval of the Board, engage in any other business activity which would
interfere with the performance of your duties, services and responsibilities hereunder or which is in violation of policies established from time to time by Knight. 
  
 2.    Compensation and Benefits.    You shall receive the following compensation and benefits: 

 

	 	a.
	 
	Annual base salary for 2002 to be paid at a rate of $750,000, pro-rated from February 1, 2002. The base salary shall be payable as current salary, in
installments, not less frequently than monthly. In the event you are not selected as the permanent CEO but you remain employed by Knight in another capacity during 2002, you will continue to receive this annual base salary for the duration of 2002.

 

  

	 	b.
	 
	In addition to your 2002 annual base salary, for services performed during 2002 or, upon termination of your employment from Knight or an affiliated entity, you
will receive incentive compensation in accordance with the following schedule 
 

  
 
	 EPS / ROE
 
	  	 % Target Comp
 
	    	 Incentive Compensation
 

	 $1.50 / 22.4%
 	  	 150%
 	    	 $10.5 million
 
	 $1.25 / 18.6%
 	  	 125%
 	    	 $8.625 million
 
	 $1.00 / 14.9%
 	  	 100%
 	    	 $6.750 million
 
	 $0.75 / 11.2%
 	  	 75%
 	    	 $4.875 million
 
	 $0.62 / 9.2%
 	  	 62%
 	    	 $3.9 million
 
	 $0.50 / 7.5%
 	  	 50%
 	    	 $3. million
 
	 Less than .$.50
 	  	 0%
 	    	 $2.5 million
 

 
  
 based on the Johnson Associates, Inc. “Knight Interim CEO
Compensation Directions, draft dated January 4, 2002” (which included salary in the formula compensation it reflects). Such incentive compensation amount will be paid in accordance with Section c below. In the event that prior to December 31,
2002 you (i) are terminated with Cause; (ii) leave voluntarily from the firm; or (iii) refuse to accept an offer of employment with the firm in a position commensurate with your pre-CEO position, you will not receive the aforementioned incentive
compensation. 
  

	 	c.
	 
	Of the aforementioned minimum $2,500,000 incentive compensation, $1,050,000 will be in the form of stock options and restricted stock to be granted as
permissible under the Knight Executive Incentive Plan and promptly following your execution of this letter. If any other additional amounts are paid as incentive compensation, the proportion of such compensation
 
 

 

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to be paid in cash, stock options and restricted stock shall be in accordance with the Knight Executive Incentive Plan. Such stock options and restricted stock shall fully vest upon the earlier
of (i) December 31, 2002, or (ii) upon termination pursuant to Section 4 a, b, or c below. The cash portion of the incentive compensation shall be paid at the time 2002 bonuses for other members of senior management shall be paid. Provided you are
employed by Knight on December 31, 2002 or, if your employment is terminated earlier than December 31, 2002 pursuant to Section 4 a, b, or c below, you shall be entitled to receive the cash portion of the incentive compensation even if you are no
longer an employee of Knight at the time the bonuses are paid. 
 

  

	 	d.
	 
	You shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by you in performing services hereunder, including all reasonable
expenses of travel and living while away from home, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by Knight. 
 

  

	 	e.
	 
	You shall be entitled to the number of vacation days, and to compensation in respect of earned but unused vacation days, determined in accordance with
Knight’s vacation program. You shall also be entitled to all paid holidays given by Knight to its employees. 
 

  

	 	f.
	 
	You shall be entitled to participate in all of Knight’s employee benefit plans and programs in effect during the Term as would by their terms be applicable
to you, including, without limitation, any pension and retirement plan, supplemental pension and retirement plan, deferred compensation plan, incentive plan, stock option plan, life insurance plan, medical insurance plan, dental care plan,
accidental death and disability plan, and vacation, sick leave or personal leave program. After you become employed, Knight shall not make any changes in such plans or programs that would adversely affect your benefits thereunder, unless such change
occurs pursuant to a program applicable to other senior management employees of Knight and does not result in a proportionately greater reduction in your rights or benefits as compared with other senior management employees of Knight. Except as
otherwise specifically provided herein, nothing paid to you under any plan or program presently in effect or made available in the future shall be in lieu of the base salary or any incentive compensation payable under Sections 2(a), 2(b), 2(c) and
2(d) hereof. Notwithstanding the foregoing, upon your termination of employment with Knight, Knight agrees to assign ownership to you of the key-man life insurance policy which has previously been purchased on your life. 

  
 3.    Term.    The term of this Agreement
shall be for the period commencing on February 1, 2002 and expiring December 31, 2002. Notwithstanding the foregoing, this Agreement shall expire sooner if one of the events described in Section 4 of this Agreement has occurred. 

 
 4.    Termination.    This Agreement, and your employment as
Interim CEO, shall terminate upon the occurrence of any one of the following: 
  

	 	a.
	 
	your death or Disability; 
 

  

	 	b.
	 
	the mutual agreement of you and Knight; 
 

  

	 	c.
	 
	the termination without Cause by Knight’s unilateral action; 
 

  

	 	d.
	 
	the termination with Cause by Knight’s unilateral action; or 
 

  

	 	e.
	 
	the termination by you. 
 

  
 For purposes hereof, “Cause” shall mean: 
  

	 	(i)
	 
	deliberate or intentional failure by you to perform your material duties hereunder (other than due to Disability); 
 

  
 

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	 	(ii)
	 
	an intentional act of fraud, embezzlement, theft or any other material violation of law; 
 

  

	 	(iii)
	 
	intentional wrongful damage to material assets of Knight; 
 

  

	 	(iv)
	 
	intentional wrongful disclosure of material confidential information of Knight; 
 

  

	 	(v)
	 
	intentional wrongful engagement in any competitive activity which would constitute a breach of this Agreement and/or of your duty of loyalty; or 

  

	 	(vi)
	 
	intentional breach of any material employment policy of Knight. 
 

  
 No act, or failure to act, on your part shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed
“intentional” only if done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in, or not opposed to, the best interest of Knight. Failure to meet performance standards or
objectives of Knight shall not constitute Cause for purposes hereof. 
  
 For purposes hereof, “Disability”
shall mean a disability of such a nature as to render you incapable of performing your duties for a period of indefinite duration because of physical or mental impairment. Such disability shall be determined based upon the competent medical opinion
of a physician or clinic selected by both you and Knight. 
  
 5.    Severance.    If the Agreement terminates pursuant to 4 a, b or c above, Knight shall pay you in a lump sum $500,000 provided you agree to sign a separation agreement and release,
including, without limitation, a non-solicitation agreement, in a form acceptable to Knight. In addition, you shall have the choice, upon termination pursuant to Section 4 a, b, or c above (i) to keep the options granted pursuant to Section 2 above
(which shall be exercisable for three years from such termination) and restricted stock or (ii) to receive as cash the present value of the options and restricted stock at the time of termination, such valuation shall be determined in accordance
with Knight’s usual practice. 
  
 6.    Non-Compete. 

 

	 	a.
	 
	You agree that in the event you leave the position of Interim CEO voluntarily, you will not, for the period until December 31, 2002, directly or indirectly own,
manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant,
independent contractor, employee, partner, or investor, with any Competing Enterprise (defined below), provided, however, that you may invest in stocks, bonds, or other securities are listed on any national securities exchange or are registered
under Section 12(g) of the Securities Exchange Act of 1934, and (ii) your investment does not exceed, in the case of any class of the capital stock of any one issuer, one percent of the issued and outstanding shares, or in the case of bonds or other
securities, one percent of the aggregate principal amount thereof issued and outstanding. 
 

  

	 	b.
	 
	The term “Competing Enterprise” shall mean any person, corporation, partnership or other entity that is engaged in the business of operating a
wholesale over-the-counter market maker business or a third market broker-dealer business. 
 

  
 7.    Confidential Information.    During the Term and at all times thereafter, you shall not, without the prior written consent of Knight (except as may be required in connection with
any judicial or administrative proceeding or inquiry) disclose to any person, other than an officer or director of Knight or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance of your duties
hereunder, any Confidential Information obtained by you while consulting with Knight with respect to its business, assets or operations, including, but not limited to, Confidential Information relating to the properties, accounts, books, records,
supplies, trade secrets and contracts of Knight. As used herein, “Confidential Information” shall be deemed to include all information and documents (including this Agreement) disclosed by Knight to you in connection with or for the
purposes of this Agreement, together
 
 

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with all analyses, compilations, forecasts, studies or other documents prepared by you to the extent such materials contain or otherwise reflect such information. “Confidential
Information” does not include any information which (a) at the time of disclosure or thereafter is generally available to and known by the public or (b) was lawfully in your possession without any restriction on use or disclosure prior to its
disclosure hereunder or (c) was or becomes available to you from a source other than Knight; provided that you did not know such source disclosed such information to you in violation of a confidentiality obligation. If you are compelled to disclose
Confidential Information pursuant to subpoena, summons, order or other judicial, governmental or regulatory process, you may do so provided that you provide prompt notice of any such subpoena, summons, order or other process to Knight. 

 
 8.    Intellectual Property.    You agree that all inventions,
improvements, discoveries, computer software, patents, trade concepts, copyrightable materials made, conceived or developed by you during the Term, in respect of the business of Knight either singly or in collaboration with others, and all results
and proceeds of your services hereunder (such property collectively referred to herein as “Works”) shall be within the scope of your services hereunder as “works-made-for-hire”, and Knight shall be the author thereof and all such
Works shall be the sole and exclusive property of Knight. If, and to the extent that, any such Works are ultimately determined by a court of competent jurisdiction not be “works-made-for-hire”, such Works shall be and hereby are assigned
exclusively and irrevocably to Knight by you. The foregoing assignment is universal and includes the full term of copyright and of any renewals, extensions or reversions of copyright now or hereafter provided or, where no copyright law is
applicable, and with respect to patents, trademarks and tradenames, in perpetuity. Knight shall have the sole and exclusive right throughout the universe, to be exercised in its sole discretion, to sell, use, license and otherwise exploit all such
Works in any manner, method or medium, whether now known or hereafter devised. All rights granted or agreed to be granted by you to Knight hereunder in connection with all such Works shall vest in Knight immediately and shall remain vested in
Knight. 
  
 9.    Return of Documents.    Upon
termination of this agreement for any reason, you agree to return all documents and other property provided to you or prepared by you during your employment with Knight, including, but not limited to, contracts, agreements, software, customer lists,
business plans, books, records, notes and all copies thereof. 
  
 10.    Indemnification.    Knight shall indemnify and hold you harmless to the fullest extent permitted by law from and against any and all losses, claims, demands, costs, damages,
liabilities, (joint or several), expenses of any nature (including reasonable attorneys’ fees and disbursements), judgments, fines, suits, or proceedings, whether civil, criminal, administrative or investigate, in which you may be involved, or
threatened to be involved as a party or otherwise, arising out of or incidental to the formation, business, or activities of or relating to Knight in your capacity as an employee, officer, member or representative of Knight, regardless of whether
you continue to be an employee, officer, member or representative at the time any such liability or expense is paid or incurred; provided, however, that this provision shall not eliminate or limit your liability (i) for any breach of your duty of
loyalty to Knight or its members, (ii) for acts or omissions which involve intentional misconduct or a knowing violation of law, (iii) for any transaction from which you received any improper personal benefit and (iv) for any breach of any provision
of this Agreement. 
  
 11.    Notice.    For the
purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to Knight shall be directed to the Secretary of Knight, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 
  
 12.    Miscellaneous.    No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge shall be agreed to in writing and
signed by you and by a duly authorized officer of Knight. No waiver by either party hereto at any time of any breach by the other party
 
 

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hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. All
descriptive headings in this Agreement are inserted for convenience only and shall be disregarded in construing or applying any provision of this Agreement. The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of New Jersey. The obligations under paragraphs 5, 6, 7, 8, 9 and 10 shall survive the expiration of this Agreement or the termination of employment. In the event the Executive’s employment with the Corporation
terminates for any reason, the Executive shall not be obligated to seek other employment following such termination and there shall be no offset of the payments or benefits set forth herein. 
  
 13.    Successors; Binding Agreement.    Knight shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Knight to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Knight or its affiliates would
be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean Knight as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise. No right or interest to, or in, any payments shall be assignable by you; provided, however, that this provision shall not preclude you from designating in writing one or more beneficiaries to
receive any amount that may be payable after your death and shall not preclude the legal representative of your estate from assigning any right hereunder to the person or persons entitled thereto. If you should die while any amounts would still be
payable to you hereunder, all such amounts shall be paid in accordance with the terms of this Agreement to your written designee or, if there be no such designee, to your estate. This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 
  
 14.    Validity.    The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. 
  
 15.    Counterparts.    This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same
instrument. 
  
 If you agree that this letter sets forth our agreement on the subject matter hereof, please sign and
return to Knight the enclosed copy of this letter which will then constitute our agreement on this subject. 
  
 Sincerely, 
  
 
	 
	 /S/    ROBERT I.
TURNER        
 

	 Name: Robert I. Turner
 
	 Title:
 	 	 Executive Vice President and Chief Financial Officer
 

 
  
 Agreed to this 29th day of March 2002

  
 
	 
	 /S/    ANTHONY M.
SANFILIPPO        
 

	 Name: Anthony M. Sanfilippo
 

 
 

 5<PAGE>

                                                                    Exhibit 10.1

                                      2002
                              Prudential Long-Term
                              Performance Unit Plan

<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

                                       2

<PAGE>

I.   Program Concept

The 2002 Prudential Financial Long-Term Performance Unit Plan ("the Plan") has
been developed to recognize and reward the contributions that Participants (as
hereafter defined) will make towards the Prudential Financial, Inc.'s
("Prudential", "PFI", 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.

The Plan is a "bonus program," as described in U.S. Department of Labor
Regulations Section 2510.3-2(c). As such, the Plan is not an "employee pension
benefit plan," and is thereby exempt from the substantive requirements of Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

II.  Eligibility

Employees at the Vice President Grade 6P or equivalent level and above are
eligible to participate in this Plan ("Participants"). In addition, the
Compensation Committee of the Company retains the discretion to add certain
individuals below the rank of Vice President Grade 6P 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 2002 Performance Unit grants will be valued based upon Company performance
from January 1, 2002 through December 31, 2004 (the "performance period"). The
2002 Performance Unit Plan's aggregate award pool will be set at half of 2001's
award pool in order to transition the executive population to stock option award
eligibility later in 2002 The aggregate award pool will be translated into a
number of performance units having an initial grant value of $555 per unit.

                                        3

<PAGE>

Performance Units may be awarded to 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 2002 shall be at the discretion
of the Compensation Committee.

IV.  Performance Measurement

The value of the Performance Units is anticipated to increase to $780 per unit
over the three-year performance period based on an annual compounded
risk-adjusted rate of return of 12%. To calculate award payments, the unit
values will then be adjusted by 0.0 to 2.0 based on a relative performance
measure.

The performance measure will be PFI's three-year Total Shareholder Return (TSR)
relative to a group of peer companies over the performance period. The peer
companies will be the companies listed in the following two sub-industries of
the S&P 500 Financials Sector (only peer companies remaining in the group at
year-end 2004 will count):

                  --       Life & Health Insurance (40301020)

                  --       Diversified Financial Services (40201020)

PFI's three-year TSR performance will be evaluated as follows:

                  --       Performance achievement equal to the 15/th/
                           percentile or below of the peer group will result in
                           an earnout factor of zero

                  --       Performance achievement equal to the 25/th/
                           percentile of the peer group will result in an
                           earnout factor of 0.5

                  --       Performance achievement equal to the median of the
                           peer group will result in an earnout factor of 1.0,
                           or "target"

                  --       Performance achievement equal to the 75/th/
                           percentile of the peer group will result in an
                           earnout factor of 1.5

                  --       Performance achievement equal to the 85/th/
                           percentile of the peer group will result in a maximum
                           earnout factor of 2.0

                  --       Earnout factors will be in a linear relationship with
                           performance achievement between these points as shown
                           in the graph below

                                        4

<PAGE>

                   TSR Percentile Rank vs. Performance Factor

                                     [GRAPH]

                  --       The TSR measurement will use average closing prices
                           for the final 20 trading days of 2004 and, as a base
                           period, the average closing prices from December 13,
                           2001, the PFI IPO date, through December 31, 2001.
                           For PFI, the average closing price for the base
                           period was $31.03

The award values will be determined at the end of the three-year performance
period as follows:

         --   Step 1: Multiply each performance unit by $780 to determine target
              award values

         --   Step 2: PFI's three-year TSR over the performance period will be
              compared on a relative basis to the three-year TSR of the peer
              group. For example, assume that PFI's TSR over the performance
              period ranked above median at the 60/th/ percentile of the peer
              group. The TSR performance factor will be 1.2

         --   Step 3: Multiply the target award values by the TSR performance
              factor to determine the performance adjusted award values. Using
              the above example, this value would be $780 per unit times 1.2, or
              $936 per unit

                                        5

<PAGE>

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%. Among the factors that will be taken into consideration
will be net income and other financial results over the performance period, the
level of under or over performance relative to the peer group, changes in market
share, customer and employee satisfaction, extraordinary or unusual items, legal
liabilities and strategic development factors. 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.

V.  Final Valuation and Payment

At the close of the performance period, the award values will be calculated and
presented to the Compensation Committee for review and possible adjustment. When
the final award value per unit is determined, Corporate Compensation will
compute the individual payment for each Participant based on the number of
Performance Units granted to the Participant.

The final 2002 awards are anticipated to be paid half in PFI shares and half in
cash (subject to the ultimate discretion of the Compensation Committee). Stock
price for determining the number of shares payable should be the price in
February 2005 when the Compensation Committee declares the units earned and
approves their final value.

Any 2002 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 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 unless such plan shall specifically provide for the
inclusion of such amounts in the computation of benefits or contribution
amounts.

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

                                        6

<PAGE>

    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 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
    Participant's estate or beneficiaries will receive a lump sum payment
    calculated by (a) first reducing the number of Performance Units by
    multiplying the such number by a fraction, the numerator of which is the
    number of full or partial 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), (b) multiplying such
    Performance Units by the greater of (i) the most recent estimation of the
    accrued value of such units as of the participant's death or (ii) the unit
    value for achievement of plan results and (c) making a lump sum payment of
    such amounts to the participant's estate as soon as practicable thereafter.

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

                                        7

<PAGE>

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

E.  Termination of Employment of Certain Participants After a Change of Control

    If, prior to the payment of the Performance Units, a Participant's
    employment is terminated after a "Change of Control" as defined under the
    Prudential Executive Change of Control Severance Program, the Compensation
    Committee shall award a partial payment to such Participant that 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 the most recent estimation of the accrued value as of the Participant's
    termination of employment.

F.  Involuntary Termination of Employment Other Than After a Change of Control

    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-E 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 the most recent
    estimation of the accrued value 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 with a "target" performance factor of 1.0, even if the actual TSR
    performance factor exceeds the "target" 1.0 factor.

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

                                        8

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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 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

Other than as set forth below, 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.

Notwithstanding the foregoing, if the Plan is terminated, modified or replaced
by the Compensation Committee, the Company or any successor in a manner that
materially adversely affects Participants of this Plan as a group in connection
with a "Change of Control" as defined under the Prudential Executive Change of
Control Program, payments of the full 2002 Performance Unit Award will be made
to Participants under the Program as of such date, using the most recent
estimation of the accrued value as of the date of Plan termination, modification
or replacement. If the Plan is continued by the Company or any successor after a
Change of Control or is replaced by the Company or any successor to the Company
in a manner that does not materially adversely affect Participants of this Plan
as a group, no immediate payment of the benefits described in the preceding
sentence will be made unless and until such Participant's employment is

                                        9

<PAGE>

terminated by the Company or any affiliate in accordance with the provisions of
the Plan or, if more favorable, any successor or replacement plan.

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

Except as may otherwise be provided for in Sections VI E. or IX of the Plan
(related to payments in the event of a Change of Control), 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.

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

                                       10

<PAGE>

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.

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

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<PAGE>

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.

                                       12

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