Securities Act File No. 33-_____
Investment Company Act File No. 811-08673
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. __ / /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. __ / /
(Check appropriate box or boxes)
DREYFUS INVESTMENT PORTFOLIOS
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6130
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
copy to:
Stuart H. Coleman, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
Approximate Date of Proposed Public Offering: As soon as practicable
after this Registration Statement is declared effective.
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Title of Securities Being Registered: Shares of Beneficial Interest, $.001
par value per share.
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The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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DREYFUS INVESTMENT PORTFOLIOS
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
FORM N-1A CAPTION PAGE
1 Cover Cover Page
2 Synopsis 2
3 Condensed Financial Information *
4 General Description of Registrant 3
5 Management of the Fund 7
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 14
7 Purchase of Securities Being Offered 10
8 Redemption or Repurchase 11
9 Pending Legal Proceedings *
Items in
Part B of
FORM N-1A
10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History *
13 Investment Objectives and Policies B-2
14 Management of the Fund B-12
15 Control Persons and Principal Holders
of Securities B-15
16 Investment Advisory and Other Services B-15
17 Brokerage Allocation B-21
18 Capital Stock and Other Securities B-23
19 Purchase, Redemption and Pricing of
Securities Being Offered B-16
20 Tax Status B-18
21 Underwriters *
22 Calculations of Performance Data B-22
23 Financial Statements B-33
Items in
Part C of
FORM N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under Common
Control with Registrant C-1
26 Number of Holders of Securities C-1
27 Indemnification C-1
28 Business and Other Connections of
Investment Adviser C-2
29 Principal Underwriters C-5
30 Location of Accounts and Records C-7
31 Management Services C-7
32 Undertakings C-7
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*Omitted since answer is negative or inapplicable.
<PAGE>
PROSPECTUS ___________, 1998
DREYFUS INVESTMENT PORTFOLIOS
Dreyfus Investment Portfolios (the "Fund") is an open-end, management
investment company, known as a mutual fund. SHARES ARE OFFERED ONLY TO VARIABLE
ANNUITY AND VARIABLE LIFE INSURANCE SEPARATE ACCOUNTS ESTABLISHED BY INSURANCE
COMPANIES TO FUND VARIABLE ANNUITY CONTRACTS AND VARIABLE LIFE INSURANCE
POLICIES AND TO QUALIFIED PENSION AND RETIREMENT PLANS. Individuals may not
purchase shares directly from the Fund. For offers to separate accounts, this
Prospectus should be read in conjunction with the prospectus of the separate
accounts of the specific insurance product which should precede or accompany
this Prospectus. The Fund permits investors to invest in two separate portfolios
(each, a "Portfolio"), each with a different investment objection:
o The CORE VALUE PORTFOLIO'S primary investment objective is to
provide long-term growth of capital; current income is a secondary investment
objective. This Portfolio invests primarily in equity securities, such as common
stocks and securities convertible into common stocks.
o The MIDCAP STOCK PORTFOLIO'S investment objective is to provide
investment results that are greater than the total return performance of
publicly-traded common stocks of medium-size domestic companies in the
aggregate, as represented by the Standard & Poor's MidCap 400 Index. This
Portfolio invests primarily in a portfolio of equity securities of medium-size
domestic issuers, while attempting to maintain volatility and diversification
similar to that of the Standard & Poor's MidCap 400 Index.
The Dreyfus Corporation serves as each Portfolio's investment adviser.
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This Prospectus sets forth concisely information about the Fund that
an investor should know before investing in a Portfolio. It should be read and
retained for future reference.
The Statement of Additional Information, dated _________, 1998, which
may be revised from time to time, provides a further discussion of certain areas
in this Prospectus and other matters which may be of interest to some investors.
It has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Securities and Exchange Commission
maintains a Web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. For a free copy of the Statement of Additional
Information, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call 1-800-554-4611. When telephoning, ask for Operator 144.
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MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. MUTUAL
FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO
TIME.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses...........................................
Description of the Fund..................................................
Management of the Fund...................................................
How to Buy Shares........................................................
How to Redeem Shares.....................................................
Dividends, Distributions and Taxes.......................................
Performance Information..................................................
General Information......................................................
Appendix.................................................................
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
CORE VALUE MIDCAP STOCK
PORTFOLIO PORTFOLIO
Management Fees................ ____% ____%
Other Expenses................. ____% ____%
Total Operating Expenses....... ____% ____%
EXAMPLE
AN INVESTOR WOULD PAY THE FOLLOWING EXPENSES ON A $1,000 INVESTMENT,
ASSUMING A 5% ANNUAL RETURN (CUMULATIVELY THROUGH THE END OF EACH TIME PERIOD):
CORE VALUE MIDCAP STOCK
PORTFOLIO PORTFOLIO
1 Year.......................... $ $
3 Years......................... $ $
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED REPRESENTATIVE OF
FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED.
MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH PORTFOLIO'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN
5%.
The purpose of the foregoing table is to assist investors in
understanding the costs and expenses borne by each Portfolio, the payment of
which will reduce investors' annual return. Other Expenses noted above are based
on estimated amounts for the current fiscal year. The information in the
foregoing table does not reflect deduction of account fees and charges to
separate accounts or related insurance policies that may be imposed by insurance
companies. For a further description of the various costs and expenses incurred
in the operation of the Fund, as well as expense reimbursement or waiver
arrangements, see "Management of the Fund."
DESCRIPTION OF THE FUND
GENERAL
Shares of the Portfolios are offered only to variable annuity and
variable life insurance separate accounts established by affiliated and
unaffiliated life insurance companies ("Participating Insurance Companies") to
fund variable annuity contracts ("VA contracts") and variable life insurance
policies ("VLI policies" and, together with VA contracts, "Policies"). The
Policies are described in the separate prospectuses and statements of additional
information issued by the Participating Insurance Companies over which the Fund
assumes no responsibility. Shares of the Portfolios also are offered to
qualified pension and retirement plans and accounts permitting accumulation of
assets on a tax-deferred basis ("Eligible Plans" or "Plans").
Differences in tax treatment or other considerations may cause the
interests of Policy owners and eligible Plan participants to conflict, although
the Fund currently does not foresee any disadvantages to Policy owners or
Eligible Plan participants arising therefrom. Nevertheless, the Fund's Board
intends to monitor events in order to identify any material conflicts which may
arise and to determine what action, if any, should be taken in response thereto.
Resolution of an irreconcilable conflict might result in the withdrawal of a
substantial amount of a Portfolio's assets which could adversely affect the
Portfolio's net asset value per share.
Individual Policy owners and Plan participants are not the
"shareholders" of the Fund. Rather, the Participating Insurance Companies and
their separate accounts and the Eligible Plans, respectively, are the
shareholders (the "shareholders").
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
Each Portfolio has a different investment objective which it pursues
through separate investment policies, as described herein. The differences in
objectives and policies between the Portfolios determine the types of portfolio
securities in which each Portfolio invests, and can be expected to affect the
degree of risk to which each Portfolio is subject and each Portfolio's yield or
return. Each Portfolio's investment objective cannot be changed without approval
by the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of such Portfolio's outstanding voting shares.
There can be no assurance that a Portfolio's investment objective will be
achieved. The types of portfolio securities in which each Portfolio may invest
are described in greater detail below and under "Appendix--Certain Portfolio
Securities."
CORE VALUE PORTFOLIO
The Core Value Portfolio is a diversified portfolio, the primary
investment objective of which is to provide long-term growth of capital; current
income is a secondary investment objective .
The Portfolio anticipates that at least 65% of the value of its total
assets (except when maintaining a temporary defensive position) will be invested
in equity securities, such as common stocks, preferred stocks and securities
convertible into common stocks, including Depositary Receipts, which would be
characterized as "value" companies according to criteria established by The
Dreyfus Corporation. In general, the Portfolio's investments are broadly
diversified over a number of industries and, as a matter of operating policy,
the Portfolio will not invest more than 25% of its total assets in any one
industry.
The Portfolio's investment approach is value-oriented, research-driven
and risk adverse. To manage the Portfolio, The Dreyfus Corporation classifies
issuers as "value" or "growth" companies. In general, The Dreyfus Corporation
believes that companies with relatively low price to book ratios, low price to
earnings ratios or higher than average dividend payments in relation to price
should be classified as value companies. Alternatively, companies which have
above average earnings or sales growth and retention of earnings and command
higher price to earnings ratios fit the classic growth description. In addition,
The Dreyfus Corporation intends to consider broader measures of value, including
operating return characteristics, overall financial health and positive changes
in business momentum. This value-oriented investment style is both quantitative
and fundamentally based, focusing first on stock selection then enhanced by
industry allocation guidelines.
Up to 20% of the Portfolio's total assets may be invested in foreign
securities, principally in foreign equity securities. The Portfolio may invest
up to 5% of its total net assets in fixed-income securities, including those of
companies that are close to entering, or already in, reorganization proceedings
which are rated below investment grade by Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Ratings Group ("S&P"), Fitch IBCA, Inc. ("Fitch")
or Duff & Phelps Credit Rating Co. ("Duff"). See "Investment Considerations and
Risks--Fixed-Income Securities" below.
While seeking desirable investments, the Portfolio may invest in money
market instruments (collectively, "Money Market Instruments") consisting of U.S.
Government securities, certificates of deposit, time deposits, bankers'
acceptances, short-term investment grade corporate bonds and other short-term
debt instruments, and repurchase agreements, as set forth under
"Appendix--Certain Portfolio Securities--Money Market Instruments." Under normal
market conditions, the Portfolio does not expect to have a substantial portion
of its assets invested in Money Market Instruments. However, when The Dreyfus
Corporation determines that adverse market conditions exist, the Portfolio may
adopt a temporary defensive posture and invest all of its assets in Money Market
Instruments.
The Portfolio's annual portfolio turnover rate is not expected to
exceed 150%. A turnover rate of 100% is equivalent to the Portfolio buying and
selling all of the securities in its portfolio once in the course of a year.
Higher portfolio turnover rates usually generate additional brokerage
commissions and expenses and the short-term gains realized from these
transactions are taxable to shareholders as ordinary income. The Portfolio may
engage in various investment techniques, such as options, futures and foreign
currency transactions, lending portfolio securities and leveraging. For a
discussion of the investment techniques and their related risks, see "Investment
Considerations and Risks" and "Appendix--Investment Techniques" below and
"Investment Objectives and Management Policies--Management Policies" in the
Statement of Additional Information.
MIDCAP STOCK PORTFOLIO
The MidCap Stock Portfolio is a diversified portfolio, the investment
objective of which is to provide investment results that are greater than the
total return performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's MidCap 400 Indexr's MidCap 400 Index" is a
trademark of The McGraw-Hill Companies, Inc. The Portfolio is not sponsored,
endorsed, sold or promoted by S&P or The McGraw-Hill Companies, Inc.n to offer
above-average growth potential. Medium-size issuers will include those U.S.
companies with market capitalizations (market price per share times the number
of shares outstanding) generally ranging in value from $200 million to $5
billion. The Portfolio also may invest in large and small capitalization
companies, including emerging and cyclical growth companies. Emerging and
cyclical growth companies are firms which, while they may not have a history of
stable long-term growth, are nonetheless expected to represent attractive
investments. The equity securities in which the Portfolio invests consist of
common stocks, preferred stocks and securities convertible into common stocks,
including those in the form of Depositary Receipts. The Portfolio is not an
index fund and its investments are not limited to securities of issuers included
in the S&P 400 Index.
The S&P 400 Index is composed of 400 selected common stocks of
medium-size domestic companies, which may include some Canadian issuers, with
market capitalizations ranging generally between $50 million and $10 billion.
The median market capitalization of the stocks in the S&P 400 Index is
approximately $2.7 billion. Standard & Poor's chooses the stocks to be included
in the S&P 400 Index on the basis of market size, liquidity and industry group
representation. The weightings of stocks in the S&P 400 Index are based on each
stock's relative total market capitalization. Because of this weighting, as of
October 31, 1997, approximately 32% of the S&P 400 Index was composed of the 50
largest companies. Of the companies, most are listed on the New York Stock
Exchange, others are quoted on The Nasdaq Stock Market and a few are listed on
the American Stock Exchange.
The Dreyfus Corporation utilizes computer techniques to track, and, if
possible, outperform the S&P 400 Index. To construct the Portfolio's investment
portfolio, The Dreyfus Corporation employs valuation models designed to identify
common stocks of companies that are undervalued and should be purchased and
retained by the Portfolio. Undervalued securities ordinarily are characterized
by a relatively low price to earnings ratio (using normalized earnings), a low
ratio of market price to book value, or underlying asset values that The Dreyfus
Corporation determines are not fully reflected in the current market price. Once
undervalued common stocks are identified, The Dreyfus Corporation's experienced
investment analysts construct an investment portfolio, using the valuation
models, that in the aggregate resembles the S&P 400 Index, but is weighted
toward the most attractive stocks.
The Portfolio also may invest in corporate obligations rated at least
Baa by Moody's or BBB by S&P, Fitch or Duff, or, if unrated, of comparable
quality as determined by The Dreyfus Corporation. Securities rated Baa by
Moody's or BBB by S&P, Fitch or Duff are considered by those rating agencies to
be investment grade obligations which lack outstanding investment
characteristics and may have speculative characteristics as well. See
"Investment Considerations and Risks--Fixed-Income Securities" below.
While seeking desirable investments, the Portfolio may invest in Money
Market Instruments. Under normal market conditions, the Portfolio does not
expect to have a substantial portion of its assets invested in Money Market
Instruments. However, when The Dreyfus Corporation determines that adverse
market conditions exist, the Portfolio may adopt a temporary defensive posture
and invest all of its assets in Money Market Instruments.
The Portfolio's annual portfolio turnover rate is not expected to
exceed 100%. A turnover rate of 100% is equivalent to the Portfolio buying and
selling all the securities in its portfolio once in the course of the year. In
an effort to increase returns, the Portfolio may engage in various investment
techniques, such as options and futures transactions, lending portfolio
securities and leveraging. For a discussion of the investment techniques and
their related risks, see "Investment Considerations and Risks" and
"Appendix--Investment Techniques" below and "Investment Objectives and
Management Policies--Management Policies" in the Statement of Additional
Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL--Since each Portfolio will pursue different types of investments,
the risks of investing will vary depending on the Portfolio
selected for investment. Before selecting a Portfolio in which to invest, the
investor should assess the risks associated with the types of investments made
by the Portfolio. The net asset value per share of each Portfolio should be
expected to fluctuate. Investors should consider each Portfolio as a supplement
to an overall investment program and should invest only if they are willing to
undertake the risks involved. See "Investment Objectives and Management
Policies" in the Statement of Additional Information for a further discussion
of certain risks.
EQUITY SECURITIES--Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such fluctuations
can be pronounced. Changes in the value of a Portfolio's investments will result
in changes in the value of its shares and thus the Portfolio's total return to
investors.
Each Portfolio may purchase securities of smaller capitalization
companies, the prices of which may be subject to more abrupt or erratic market
movements than larger, more established companies, because these securities
typically are traded in lower volume and the issuers typically are more subject
to changes in earnings and prospects.
FIXED-INCOME SECURITIES--Even though interest-bearing securities are investments
which promise a stable stream of income, the prices of such securities generally
are inversely affected by changes in interest rates and, therefore, are subject
to the risk of market price fluctuations. Certain securities that may be
purchased by each Portfolio, such as those with interest rates that fluctuate
directly or indirectly based on multiples of a stated index, are designed to be
highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and possibly loss of principal.
The values of fixed-income securities also may be affected by changes
in the credit rating or financial condition of the issuer. Certain debt
securities that may be purchased by each Portfolio, such as those rated Baa by
Moody's and BBB by S&P, Fitch and Duff, may be subject to such risk with respect
to the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated fixed-income securities. The Core Value Portfolio may
invest up to 5% of its net assets in higher yielding (and, therefore, higher
risk) debt securities such as those rated Ba by Moody's or BB by S&P, Fitch or
Duff or as low as the lowest rating assigned by Moody's, S&P, Fitch or Duff. The
retail secondary market for these securities may be less liquid than that of
higher rated securities; adverse conditions could make it difficult at times for
the Portfolio to sell certain securities or could result in lower prices than
those used in calculating the Portfolio's net asset value. Once the rating of a
portfolio security has been changed, the Fund will consider all circumstances
deemed relevant in determining whether to continue to hold the security. See
"Investment Objectives and Management Policies--Investment Considerations and
Risks--Lower Rated Securities" and "Appendix" in the Statement of Additional
Information.
FOREIGN SECURITIES--Foreign securities markets generally are not as developed or
efficient as those in the United States. Securities of some foreign issuers are
less liquid and more volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities markets are less than
in the United States and, at times, volatility of price can be greater than in
the United States.
Because evidences of ownership of such securities usually are held
outside the United States, the Portfolio will be subject to additional risks
which include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental restrictions
which might adversely affect or restrict the payment of principal and interest
on the foreign securities to investors located outside the country of the
issuer, whether from currency blockage or otherwise in developing countries.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations.
The percentage of a Portfolio's assets which may be invested in
foreign securities as noted above is not a fundamental policy and may be changed
at any time without shareholder approval.
USE OF DERIVATIVES--Each Portfolio may invest in derivatives ("Derivatives").
These are financial instruments which derive their performance, at least in
part, from the performance of an underlying asset, index or interest rate. The
Derivatives the Portfolios may use include options and futures. While
Derivatives can be used effectively in furtherance of the Portfolio's investment
objective, under certain market conditions, they can increase the volatility of
the Portfolio's net asset value, decrease the liquidity of the Portfolio's
investments and make more difficult the accurate pricing of the Portfolio's
investments. See "Appendix--Investment Techniques--Use of Derivatives" below,
and "Investment Objectives and Management Policies--Management
Policies--Derivatives" in the Statement of Additional Information.
STATE INSURANCE REGULATION--The Fund is intended to be a funding vehicle for VA
contracts and VLI policies to be offered by Participating Insurance Companies
and will seek to be offered in as many jurisdictions as possible. Certain states
have regulations concerning concentration of investments, purchase and sale of
futures contracts and short sales of securities, among other techniques. If
applied to the Fund, each Portfolio may be limited in its ability to engage in
such techniques and to manage its portfolio with the flexibility provided
herein. It is the Fund's intention that each Portfolio operate in material
compliance with current insurance laws and regulations, as applied, in each
jurisdiction in which the Portfolio is offered.
SIMULTANEOUS INVESTMENT--Investment decisions for each Portfolio are made
independently from those of the other Portfolio and investment companies managed
by The Dreyfus Corporation. However, if such other Portfolio or investment
companies desire to invest in, or dispose of, the same securities as the
Portfolio, available investments or opportunities for sales will be allocated
equitably to each. In some cases, this procedure may adversely affect the size
of the position obtained for or disposed of by a Portfolio or the price paid or
received by a Portfolio.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER--The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the Fund's investment
adviser. The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon").
As of March 31, 1998, The Dreyfus Corporation managed or administered
approximately $___ billion in assets for approximately 1.7 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the authority of the Fund's Board in accordance with Massachusetts
law. The primary portfolio managers of the Portfolios are as follows:
CORE VALUE PORTFOLIO--Investment decisions for the Portfolio are made by a
committee of portfolio managers of The Dreyfus Corporation, and no person is
primarily responsible for making recommendations to the committee. Members of
the committee also comprise the Equity Policy Group of The Boston Company Asset
Management, Inc., which is an indirect wholly-owned subsidiary of Mellon and,
thus, an affiliate of The Dreyfus Corporation.
MIDCAP STOCK PORTFOLIO--John O'Toole. He has been the Portfolio's primary
portfolio manager since the Portfolio's inception and has been employed by The
Dreyfus Corporation since October 1994. He also is a Senior Vice President and a
Portfolio Manager for Mellon Equity Associates, a wholly-owned subsidiary of
Mellon and, thus, an affiliate of The Dreyfus Corporation, and has been employed
by Mellon Bank, N.A. since 1979.
The Dreyfus Corporation also provides research services for the Fund
and for other funds advised by The Dreyfus Corporation through a professional
staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international markets.
Mellon is among the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned subsidiaries are
Mellon Bank, N.A., Mellon Bank (DE) National Association, Mellon Bank (MD), The
Boston Company, Inc., AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries, including The
Dreyfus Corporation, Mellon managed more than $___ billion in assets as of
December 31, 1997, including approximately $__ billion in proprietary mutual
fund assets. As of December 31, 1997, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or administration services,
for more than $___ trillion in assets including approximately $__ billion in
mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .__ of 1% of the
value of the Core Value Portfolio's average daily net assets, and .___ of 1% of
the value of the MidCap Stock Portfolio's average daily net assets.
In allocating brokerage transaction, The Dreyfus Corporation seeks to
obtain the best execution of orders at the most favorable net price. Subject to
this determination, The Dreyfus Corporation may consider, among other things,
the receipts of research services and/or the sale of shares of the Fund or other
funds managed, advised or administered by The Dreyfus Corporation as factors in
the selection of broker-dealers to execute portfolio transactions for the Fund.
Brokerage transactions for the Fund may be conducted through Dreyfus Investment
Services Corporation, an affiliate of The Dreyfus Corporation, in accordance
with procedures adopted by the Fund's Board. See "Portfolio Transactions" in the
Statement of Additional Information.
The Dreyfus Corporation, from time to time, may make payments from its
own assets to Participating Insurance Companies and Eligible Plans in connection
with the provision of certain administrative services to one or more Portfolios
and/or to purchasers of VA contracts or VLI policies or Plan participants.
EXPENSES--All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by The Dreyfus Corporation. The
expenses borne by the Fund include: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of The Dreyfus Corporation or its affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of maintaining the Fund's
existence, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders, costs of shareholders' reports
and meetings, and any extraordinary expenses. Expenses attributable to a
particular Portfolio are charged against the assets of that Portfolio; other
expenses of the Fund are allocated between the Portfolios on the basis
determined by the Board, including, but not limited to, proportionately in
relation to the net assets of each Portfolio.
From time to time, The Dreyfus Corporation may waive receipt of its
fees and/or voluntarily assume certain expenses of a Portfolio, which would have
the effect of lowering the expense ratio of that Portfolio and increasing yield
to investors. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive nor will the Fund reimburse The Dreyfus Corporation for
any amounts it may assume.
DISTRIBUTOR--The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at 60 State Street, Boston, Massachusetts 02109. The
Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN--Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671, Providence,
Rhode Island 02940-9671, is the Fund's Transfer and Dividend Disbursing Agent
(the "Transfer Agent"). Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258, is the Fund's Custodian.
HOW TO BUY SHARES
INDIVIDUALS MAY NOT PLACE PURCHASE ORDERS DIRECTLY WITH THE FUND.
INDIVIDUALS SHOULD CONSULT A PARTICIPATING INSURANCE COMPANY, THE ADMINISTRATOR
OF AN ELIGIBLE PLAN OR A FINANCIAL INTERMEDIARY FOR INFORMATION ON THE PURCHASE
OF PORTFOLIO SHARES. THE FUND DOES NOT ISSUE SHARE CERTIFICATES. Purchase orders
received by the Participating Insurance Company or Eligible Plan on a given
business day will be effected at the net asset value of the applicable Portfolio
determined on such business day if the orders are received by the Fund on the
next business day in accordance with applicable requirements. It is each
Participating Insurance Company's or Eligible Plan administrator's or trustee's
responsibility to transmit purchase orders in accordance with applicable
requirements.
Fund shares are sold on a continuous basis. Net asset value per share
is determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day that the New York
Stock Exchange is open for business. For purposes of determining net asset
value, options and futures will be valued 15 minutes after the close of trading
on the floor of the New York Stock Exchange. Net asset value per share is
computed by dividing the value of the net assets of each Portfolio (i.e., the
value of its assets less liabilities) by the total number of Portfolio shares
outstanding. Each Portfolio's investments are valued based on market value, or
where market quotations are not readily available, based on fair value as
determined in good faith by the Fund's Board. For further information regarding
the methods employed in valuing each Portfolio's investments, see "Determination
of Net Asset Value" in the Statement of Additional Information.
HOW TO REDEEM SHARES
Portfolio shares may be redeemed at any time by the separate accounts
of the Participating Insurance Companies or by Eligible Plans. INDIVIDUALS MAY
NOT PLACE REDEMPTION ORDERS DIRECTLY WITH THE FUND. Redemption requests received
by the Participating Insurance Company or Eligible Plan on a given business day
will be effected at the net asset value of the applicable Portfolio determined
on such business day if the requests are received by the Fund in proper form and
in accordance with applicable requirements on the next business day. It is each
Participating Insurance Company's or Eligible Plan administrator's or trustee's
responsibility to properly transmit redemption requests in accordance with
applicable requirements. The value of the shares redeemed may be more or less
than their original cost, depending on the Portfolio's then-current net asset
value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent or other entity authorized to
accept orders on behalf of the Fund of a redemption request in proper form,
except as provided by the rules of the Securities and Exchange Commission.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as amended (the "Code"), each
Portfolio of the Fund is treated as a separate entity for purposes of
qualification and taxation as a regulated investment company. Each Portfolio
declares and pays dividends from net investment income quarterly. Each Portfolio
will make distributions from net realized securities gains, if any, once a year,
but may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent with
the provisions of the 1940 Act. No Portfolio will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. Dividends are automatically reinvested in additional
shares at net asset value unless payment in cash is elected. Shares begin
earning dividends on the day the purchase order is effective. If all shares in
an account are redeemed at any time, all dividends to which the shareholder is
entitled will be paid along with the proceeds of the redemption. An omnibus
accountholder may indicate in a partial redemption request that a portion of any
accrued dividends to which such account is entitled belongs to an underlying
accountholder who has redeemed all shares in his or her account, and such
portion of the accrued dividends will be paid to the accountholder along with
the proceeds of the redemption. All expenses are accrued daily and deducted
before declaration of dividends to investors.
Section 817(h) of the Code and regulations thereunder set standards
for diversification of the investments underlying Policies in order for the
Policies to be treated as life insurance. These requirements, which are in
addition to diversification requirements applicable to the Portfolios under
Subchapter M of the Code, may affect the composition of a Portfolio's
investments. Since the shares of the Portfolios currently are sold to segregated
asset accounts underlying such Policies, each Portfolio intends to comply with
the diversification requirements as set forth in the regulations.
By meeting these and other requirements, the Participating Insurance
Companies, rather than the Policy owners, should be subject to tax on
distributions received with respect to Portfolio shares. The tax treatment on
distributions made to a Participating Insurance Company will depend on the
Participating Insurance Company's tax status.
Dividends and distributions made by the Portfolios to Eligible Plans
are not taxable to the Plans or to the participants thereunder. The Portfolios
will be managed without regard to tax ramifications.
Since the Fund's shareholders are the Participating Insurance
Companies, their separate accounts and Eligible Plans, no discussion is included
herein as to the Federal income tax consequences to Policy owners and Eligible
Plan participants. For information concerning the Federal income tax
consequences, Policy owners should consult the applicable prospectus of the
separate account of the Participating Insurance Company and Eligible Plan
participants should consult the Plan's administrator or trustee.
Management of the Fund expects that each Portfolio will qualify as a
"regulated investment company" under the Code so long as such qualification is
in the best interests of its shareholders. Qualification as a regulated
investment company relieves the Portfolio of any liability for Federal income
taxes to the extent its earnings are distributed in accordance with applicable
provisions of the Code. The Portfolio may be subject to a non-deductible 4%
excise tax, measured with respect to certain undistributed amounts of investment
income and capital gains. Participating Insurance Companies and Eligible Plans
should consult their tax advisers regarding specific questions as to Federal,
state or local taxes.
PERFORMANCE INFORMATION
Each Portfolio may calculate performance on an average annual total
return or total return basis. Average annual total return is calculated pursuant
to a standardized formula which assumes that an investment in the Portfolio was
purchased with an initial payment of $1,000 and that the investment was redeemed
at the end of a stated period of time, after giving effect to the reinvestment
of dividends and distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis, would result in
the redeemable value of the investment at the end of the period. Advertisements
of the Portfolios' performance will include the Portfolios' average annual total
return for one, five and ten year periods, or for shorter time periods depending
upon the length of time the Portfolio has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is expressed
as a percentage rate which is calculated by combining the income and principal
changes for a specified period and dividing by the net asset value per share at
the beginning of the period. Advertisements may include the percentage rate of
total return or may include the value of a hypothetical investment at the end of
the period, which assumes the application of the percentage rate of total
return.
In addition, from time to time, each Portfolio may advertise "yield"
and "actual distribution rate" quotations. A Portfolio's "yield" for any 30-day
period is computed by dividing the net investment income per share earned during
such period by the maximum public offering price per share on the last day of
the period, and then annualizing such 30-day yield in accordance with a formula
prescribed by the Securities and Exchange Commission which provides for
compounding on a semi-annual basis. A Portfolio's "actual distribution rate" is
computed in the same manner as yield except that actual income dividends
declared per share during the period in question is substituted for net
investment income per share.
Performance will vary from time to time and past results are not
necessarily representative of future results. Investors should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a basis
for comparison with other investments or other investment companies using a
different method of calculating performance. Performance information for either
Portfolio should not be compared with other funds that offer their shares
directly to the public since the figures provided do not reflect charges imposed
by Participating Insurance Companies under their VA contracts or VLI policies.
The effective yield and total return for a Portfolio should be distinguished
from the rate of return of a corresponding sub-account or investment division of
a separate account of a Participating Insurance Company, which rate will reflect
the deduction of additional charges, including mortality and expense risk
charges, and will therefore be lower. Policy owners should consult the
prospectus for their contract or policy.
Although the Fund is newly-organized and the Portfolios do not yet
have their own performance records, each Portfolio has the same investment
objectives and follows substantially the same investment policies as a
corresponding publicly offered open-end investment company advised by The
Dreyfus Corporation. These Dreyfus public funds have the same portfolio managers
as the corresponding Portfolios offered in this Prospectus. Set forth below is
total return and average annual total return information for the publicly
offered Dreyfus funds, which correspond to the Portfolios offered in this
Prospectus, calculated as described above, and for an appropriate securities
index. Investors should not consider this performance data as an indication of
the future performance of the Portfolios offered in this Prospectus. The
performance figures below reflect the deduction of the historical fees and
expenses paid by the Dreyfus public funds, and not those to be paid by the
Portfolios. The figures also do not reflect the deduction of charges or expenses
attributable to VA contracts or VLI policies. Policy owners should refer to the
applicable insurance company disclosure documents for information on such
charges and expenses. Additionally, although it is anticipated that each
Portfolio and its corresponding Dreyfus public fund will hold similar
securities, their investment results are expected to differ. In particular,
differences in asset size and in cash flow resulting from purchases and
redemptions of Portfolio shares may result in different security selections,
differences in the relative weightings of securities or differences in the price
paid for particular portfolio holdings. Historical performance information for
the corresponding Dreyfus public funds and for the securities indexes for
various periods ended December 31, 1997 is set forth below:
<PAGE>
<TABLE>
<CAPTION>
Name of Public Fund Total Return
and Index Period Ended Average Annual Total Return
December 31, 1997 Period Ended December 31, 1997
One Three Five Ten One Three Five Ten
Year Years Years Years Year Years Years Years
- ---------------------- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dreyfus Premier ____% ____% ____% ____% ____% ____% ____% ____%
Core Value Fund..................
[INDEX].......................... ____% ____% ____% ____% ____% ____% ____% ____%
Dreyfus Premier ____% ____% ____%* N/A ____% ____% ____%* N/A
MidCap Stock Fund................
S&P 400 Index.................... ____% ____% ____% N/A ____% ____% ____% N/A
- -----------------
*From April 6, 1994 (commencement of operations) through December 31, 1997.
</TABLE>
Calculations of the Portfolios' performance information may reflect
absorbed expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund." Comparative performance information may be used from
time to time in advertising a Portfolio's shares, including data from Lipper
Analytical Services, Inc., IBC's Money Fund Report(TM), Money Magazine, Bank
Rate Monitor(TM), Standard & Poor's 500 Composite Stock Price Index, S&P 400
Index, Russell 2500(R) Index, Morgan Stanley Capital International World Index,
the Dow Jones Industrial Average, Morningstar, Inc., Value Line Mutual Fund
Survey and other industry publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of Trust (the "Trust Agreement") and has not commenced operations as
of the date hereof. The Fund is authorized to issue an unlimited number of
shares of beneficial interest, par value $.001 per share. Each share has one
vote.
In accordance with current law, the Fund anticipates that a
Participating Insurance Company issuing a VA contract or VLI policy or an
Eligible Plan that participates in the Fund will request voting actions from
Policy holders or Plan participants and will vote shares in proportion to the
voting instructions received. For further information on voting rights, Policy
holders should refer to the prospectus for their policies and Plan participants
should consult the Plan's administrator or trustee.
The Fund is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for certain
matters under the 1940 Act and for other purposes. A shareholder of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters shareholders vote together as a group; as to others they vote separately
by portfolio.
To date, the Board has authorized the creation of two portfolios of
shares. All consideration received by the Fund for shares of one of the
Portfolios, and all assets in which such consideration is invested, will belong
to that Portfolio (subject only to the rights of creditors of the Fund) and will
be subject to the liabilities related thereto. The income attributable to, and
the expenses of, one Portfolio would be treated separately from those of the
other Portfolio. The Fund has the ability to create, from time to time, new
portfolios without shareholder approval.
Under Massachusetts law, shareholders, under certain circumstances,
could be held personally liable for the obligations of the Fund. However, the
Trust Agreement disclaims shareholder liability for acts or obligations of the
Fund and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee. The
Trust Agreement provides for indemnification from the Fund's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder's incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its operations
in such a way so as to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Fund. As described under "Management of the
Fund" in the Statement of Additional Information, the Fund ordinarily will not
hold shareholder meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose of voting to
remove Trustees.
The Transfer Agent maintains a record of each shareholder's ownership
and will send confirmations and statements of account. Shareholder inquiries may
be made by writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or by calling 516-338-3300.
Owners of VLI policies and VA contracts issued by Participating
Insurance Companies for which Portfolio shares are an investment vehicle will
receive from the Participating Insurance Companies unaudited semi-annual
financial statements and audited year-end financial statements certified by the
Fund's independent public auditors. Each report will show the investments owned
by the Portfolio and the market values thereof as determined by the Fund's Board
and will provide other information about the Portfolio and its operations.
<PAGE>
APPENDIX
INVESTMENT TECHNIQUES
LEVERAGE--(Both Portfolios) Leveraging will exaggerate the effect on net asset
value of any increase or decrease in the market value of the portfolio. Money
borrowed for leveraging will be limited to 33-1/3% of the value of each
Portfolio's total assets. These borrowings will be subject to interest costs
which may or may not be recovered by appreciation of the securities purchased;
in certain cases, interest costs may exceed the return received on the
securities purchased.
Each Portfolio may enter into reverse repurchase agreements with
banks, brokers or dealers. This form of borrowing involves the transfer by the
Portfolio of an underlying debt instrument in return for cash proceeds based on
a percentage of the value of the security. The Portfolio retains the right to
receive interest and principal payments on the security. At an agreed upon
future date, the Portfolio repurchases the security at principal plus accrued
interest. Except for these transactions, each Portfolio's borrowings generally
will be unsecured.
USE OF DERIVATIVES--(Both Portfolios) Each Portfolio may invest in the types of
Derivatives enumerated under "Description of the Fund--Investment Considerations
and Risks--Use of Derivatives." These instruments and certain related risks are
described more specifically under "Investment Objectives and Management
Policies--Management Policies--Derivatives" in the Statement of Additional
Information.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives could
have a large potential impact on the Portfolio's performance.
If a Portfolio invests in Derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Portfolio's return
or result in a loss. The Portfolio also could experience losses if its
Derivatives were poorly correlated with its other investments, or if the
Portfolio were unable to liquidate its position because of an illiquid secondary
market. The market for many Derivatives is, or suddenly can become, illiquid.
Changes in liquidity may result in significant, rapid and unpredictable changes
in the prices for Derivatives.
Although neither the Fund nor either Portfolio will be a commodity
pool, certain Derivatives subject the Portfolios to the rules of the Commodity
Futures Trading Commission which limit the extent to which a Portfolio can
invest in such Derivatives. Each Portfolio may invest in futures contracts and
options with respect thereto for hedging purposes without limit. However,
neither Portfolio may invest in such contracts and options for other purposes if
the sum of the amount of initial margin deposits and premiums paid for unexpired
options with respect to such contracts, other than for bona fide hedging
purposes, exceeds 5% of the liquidation value of the Portfolio's assets, after
taking into account unrealized profits and unrealized losses on such contracts
and options; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.
Each Portfolio may purchase call and put options and write (i.e.,
sell) covered call and put option contracts. When required by the Securities and
Exchange Commission, the Portfolio will set aside permissible liquid assets in a
segregated account to cover its obligations relating to its purchase of
Derivatives. To maintain this required cover, the Portfolio may have to sell
portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price.
LENDING PORTFOLIO SECURITIES--(Both Portfolios) Each Portfolio may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. In
connection with such loans, the Portfolio continues to be entitled to payments
in amounts equal to the dividends, interest or other distributions payable on
the loaned securities which affords the Portfolio an opportunity to earn
interest on the amount of the loan and at the same time to earn income on the
loaned securities' collateral. Loans of portfolio securities may not exceed
33-1/3% of the value of the Portfolio's total assets, and the Portfolio will
receive collateral consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. Such loans are
terminable by the Portfolio at any time upon specified notice. The Portfolio
might experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Portfolio.
FOREIGN CURRENCY TRANSACTIONS--(Core Value Portfolio) Foreign currency
transactions may be entered into for a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a security the
Portfolio has agreed to buy or sell; to hedge the U.S. dollar value of
securities the Portfolio already owns, particularly if it expects a decrease in
the value of the currency in which the foreign security is denominated; or to
gain exposure to the foreign currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the
Portfolio's purchase of foreign currencies for U.S. dollars or the maintenance
of short positions in foreign currencies, which would involve the Portfolio
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the value of
the currency sold relative to the currency the Fund contracted to receive in the
exchange. The Portfolio's success in these transactions will depend principally
on The Dreyfus Corporation's ability to predict accurately the future exchange
rates between foreign currencies and the U.S. dollar.
Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign governments or
central banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad.
FORWARD COMMITMENTS--(Both Portfolios) Each Portfolio may purchase securities on
a forward commitment or when-issued basis, which means that delivery and payment
take place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment or
when-issued security are fixed when the Portfolio enters into the commitment,
but the Portfolio does not make a payment until it receives delivery from the
counter party. The Portfolio will commit to purchase such securities only with
the intention of actually acquiring the securities, but the Portfolio may sell
these securities before the settlement date if it is deemed advisable. The
Portfolio will set aside in a segregated account permissible liquid assets at
least equal at all times to the amount of the commitments.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES--(Both Portfolios) Convertible securities are
fixed-income securities that may be converted at either a stated price or stated
rate into underlying shares of common stock. Convertible securities have
characteristics similar to both fixed-income and equity securities. Convertible
securities generally are subordinated to other similar but non-convertible
securities of the same issuer, although convertible bonds, as corporate debt
obligations, enjoy seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the same issuer.
Because of the subordination feature, however, convertible securities typically
have lower ratings than similar non-convertible securities.
WARRANTS--(Both Portfolios) A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of time. Each
Portfolio may invest up to 5% of its net assets in warrants, except that this
limitation does not apply to warrants purchased by the Portfolio that are sold
in units with, or attached to, other securities.
DEPOSITARY RECEIPTS--(Both Portfolios) Each Portfolio may invest in the
securities of foreign issuers in the form of American Depositary Receipts
("ADRs") and Global Depositary Receipts ("GDRs"). These securities may not
necessarily be denominated in the same currency as the securities into which
they may be converted. ADRs are receipts typically issued by a United States
bank or trust company which evidence ownership of underlying securities issued
by a foreign corporation. GDRs are receipts issued outside the United States
typically by non-United States banks and trust companies that evidence ownership
of either foreign or domestic securities. Generally, ADRs in registered form are
designed for use in the United States securities markets and GDRs in bearer form
are designed for use outside the United States.
MONEY MARKET INSTRUMENTS--(Both Portfolios) Each Portfolio may invest in the
following types of Money Market Instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury; others
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit of
the agency or instrumentality. These securities bear fixed, floating or variable
rates of interest. While the U.S. Government provides financial support to such
U.S. Government-sponsored agencies and instrumentalities, no assurance can be
given that it will always do so since it is not so obligated by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio buys,
and the seller agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a default or
insolvency of the other party to the agreement, including possible delays or
restrictions upon the Portfolio's ability to dispose of the underlying
securities. The Portfolio may enter into repurchase agreements with certain
banks or non-bank dealers.
BANK OBLIGATIONS. Each Portfolio may purchase certificates of deposit,
time deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Series may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Description of the Fund--Investment Considerations and
Risks--Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven days)
at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial paper
purchased by the Portfolios will consist only of direct obligations which, at
the time of their purchase, are (a) rated not lower than Prime-1 by Moody's, A-1
by S&P, F-1 by Fitch or Duff-1 by Duff, (b) issued by companies having an
outstanding unsecured debt issue currently rated at least A3 by Moody's or A- by
S&P, Fitch or Duff, or (c) if unrated, determined by The Dreyfus Corporation to
be of comparable quality to those rated obligations which may be purchased by
the Portfolio.
INVESTMENT COMPANIES--(Both Portfolios) Each Portfolio may invest in securities
issued by investment companies. Under the 1940 Act, the Portfolio's investment
in such securities, subject to certain exceptions, currently is limited to (i)
3% of the total voting stock of any one investment company, (ii) 5% of the
Portfolio's total assets with respect to any one investment company and (iii)
10% of the Portfolio's total assets in the aggregate. Investments in the
securities of other investment companies may involve duplication of advisory
fees and certain other expenses.
ILLIQUID SECURITIES--(Both Portfolios) Each Portfolio may invest up to 15% of
the value of its net assets in securities as to which a liquid trading market
does not exist, provided such investments are consistent with the Portfolio's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, the Portfolio is subject to a risk that should
the Portfolio desire to sell them when a ready buyer is not available at a price
the Portfolio deems representative of their value, the value of the Portfolio's
net assets could be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE>
DREYFUS INVESTMENT PORTFOLIOS
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
______________, 1998
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Core Value Portfolio and Dreyfus MidCap Stock Portfolio (collectively,
the "Portfolios"), each a separate series of Dreyfus Investment Portfolios (the
"Fund"), dated ____________, 1998, as it may be revised from time to time. To
obtain a copy of the Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call (516) 338-3300.
Shares of the Portfolios are offered only to variable annuity and
variable life insurance separate accounts established by insurance companies
("Participating Insurance Companies") to fund variable annuity contracts and
variable life insurance policies (collectively, "Policies") and qualified
pension and retirement plans and accounts permitting accumulation of assets on a
tax-deferred basis (collectively, "Eligible Plans") outside the separate account
context.
The Dreyfus Corporation (the "Manager") serves as each Portfolio's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Portfolios' shares.
TABLE OF CONTENTS
PAGE
Investment Objectives and Management Policies.......................B-2
Management of the Fund..............................................B-12
Management Agreement................................................B-15
Purchase of Shares..................................................B-16
Redemption of Shares................................................B-16
Determination of Net Asset Value....................................B-17
Dividends, Distributions and Taxes..................................B-18
Portfolio Transactions..............................................B-21
Performance Information.............................................B-22
Information About the Fund..........................................B-23
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors.................................B-23
Appendix............................................................B-25
Financial Statements and Report of Independent Auditors.............B-33
<PAGE>
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTIONS IN THE FUND'S PROSPECTUS ENTITLED "DESCRIPTION OF
THE FUND" AND "APPENDIX."
PORTFOLIO SECURITIES
DEPOSITARY RECEIPTS. (Both Portfolios) These securities may be
purchased through "sponsored" or "unsponsored" facilities. A sponsored facility
is established jointly by the issuer of the underlying security and a
depositary, whereas a depositary may establish an unsponsored facility without
participation by the issuer of the deposited security. Holders of unsponsored
depositary receipts generally bear all the costs of such facilities and the
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities.
REPURCHASE AGREEMENTS. (Both Portfolios) The Fund's custodian or
sub-custodian will have custody of, and will hold in a segregated account,
securities acquired by a Portfolio under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange Commission
to be loans by the Portfolio. In an attempt to reduce the risk of incurring a
loss on a repurchase agreement, each Portfolio will enter into repurchase
agreements only with domestic banks with total assets in excess of $1 billion,
or primary government securities dealers reporting to the Federal Reserve Bank
of New York, with respect to securities of the type in which the Portfolio may
invest, and will require that additional securities be deposited with it if the
value of the securities purchased should decrease below the resale price.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE Obligations. (Both
Portfolios) These instruments include variable amount master demand notes, which
are obligations that permit a Portfolio to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Portfolio, as
lender, and the borrower. These notes permit daily changes in the amounts
borrowed. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued interest,
at any time. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Portfolio's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Such obligations frequently are not rated by credit rating agencies, and
a Portfolio may invest in them only if at the time of an investment the borrower
meets the criteria set forth in the Fund's Prospectus for other commercial paper
issuers.
CONVERTIBLE SECURITIES. (Both Portfolios) Although to a lesser extent
than with fixed-income securities generally, the market value of convertible
securities tends to decline as interest rates increase and, conversely, tends to
increase as interest rates decline. In addition, because of the conversion
feature, the market value of convertible securities tends to vary with
fluctuations in the market value of the underlying common stock. A unique
feature of convertible securities is that as the market price of the underlying
common stock declines, convertible securities tend to trade increasingly on a
yield basis, and so may not experience market value declines to the same extent
as the underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock. While no securities
investments are without risk, investments in convertible securities generally
entail less risk than investments in common stock of the same issuer.
Convertible securities are investments that provide for a stable
stream of income with generally higher yields than common stocks. There can be
no assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases in
the market price of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices fluctuate. Convertible
securities, however, generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.
ILLIQUID SECURITIES. (Both Portfolios) When purchasing securities that
have not been registered under the Securities Act of 1933, as amended, and are
not readily marketable, a Portfolio will endeavor, to the extent practicable, to
obtain the right to registration at the expense of the issuer. Generally, there
will be a lapse of time between the Portfolio's decision to sell any such
security and the registration of the security permitting sale. During any such
period, the price of the securities will be subject to market fluctuations.
However, where a substantial market of qualified institutional buyers has
developed for certain unregistered securities purchased by the Portfolio
pursuant to Rule 144A under the Securities Act of 1933, as amended, the
Portfolio intends to treat such securities as liquid securities in accordance
with procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for specific restricted securities sold
pursuant to Rule 144A will develop, the Fund's Board has directed the Manager to
monitor carefully the relevant Portfolio's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a period of
time, qualified institutional buyers cease purchasing restricted securities
pursuant to Rule 144A, a Portfolio's investing in such securities may have the
effect of increasing the level of illiquidity in its investment portfolio during
such period.
MANAGEMENT POLICIES
LEVERAGE. (Both Portfolios) For borrowings for investment purposes,
the Investment Company Act of 1940, as amended (the "1940 Act"), requires the
Portfolio to maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the required coverage should decline as a result of market
fluctuations or other reasons, the Portfolio may be required to sell some of its
portfolio securities within three days to reduce the amount of its borrowings
and restore the 300% asset coverage, even though it may be disadvantageous from
an investment standpoint to sell securities at that time. The Portfolio also may
be required to maintain minimum average balances in connection with such
borrowing or pay a commitment or other fee to maintain a line of credit; either
of these requirements would increase the cost of borrowing over the stated
interest rate. To the extent a Portfolio enters into a reverse repurchase
agreement, the Portfolio will maintain in a segregated account permissible
liquid assets at least equal to the aggregate amount of its reverse repurchase
obligations, plus accrued interest, in certain cases, in accordance with
releases promulgated by the Securities and Exchange Commission. The Securities
and Exchange Commission views reverse repurchase transactions as collateralized
borrowings by a Portfolio.
LENDING PORTFOLIO SECURITIES. (Both Portfolios) In connection with its
securities lending transactions, a Portfolio may return to the borrower or a
third party which is unaffiliated with the Portfolio, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned: (1)
the Portfolio must receive at least 100% cash collateral from the borrower; (2)
the borrower must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the Portfolio must be
able to terminate the loan at any time; (4) the Portfolio must receive
reasonable interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Portfolio may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned securities may pass to
the borrower, the Fund's Board must terminate the loan and regain the right to
vote the securities if a material event adversely affecting the investment
occurs.
DERIVATIVES. (Both Portfolios) A Portfolio may invest in Derivatives
(as defined in the Fund's Prospectus) for a variety of reasons, including to
hedge certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Portfolio to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Portfolio to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Portfolio can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., variation margin requirements)
operated by the clearing agency in order to reduce overall credit risk. As a
result, unless the clearing agency defaults, there is relatively little
counterparty credit risk associated with Derivatives purchased on an exchange.
By contrast, no clearing agency guarantees over-the-counter Derivatives.
Therefore, each party to an over-the-counter Derivative bears the risk that the
counterparty will default. Accordingly, the Manager will consider the
creditworthiness of counterparties to over-the-counter Derivatives in the same
manner as it would review the credit quality of a security to be purchased by a
Portfolio. Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the Derivative to be interested in bidding for
it.
FUTURES TRANSACTIONS--IN GENERAL. A Portfolio may enter into futures contracts
in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or, if
permitted in the Fund's Prospectus, on exchanges located outside the United
States, such as the London International Financial Futures Exchange and the
Sydney Futures Exchange Limited. Foreign markets may offer advantages such as
trading opportunities or arbitrage possibilities not available in the United
States. Foreign markets, however, may have greater risk potential than domestic
markets. For example, some foreign exchanges are principal markets so that no
common clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits that a Portfolio might
realize in trading could be eliminated by adverse changes in the exchange rate,
or the Portfolio could incur losses as a result of those changes. Transactions
on foreign exchanges may include both commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to a Portfolio
which could adversely affect the value of the Portfolio's net assets. Although
each Portfolio intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified periods during the
trading day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of futures positions and potentially subjecting the Series to
substantial losses.
Successful use of futures by a Portfolio also is subject to the
ability of the Manager to predict correctly movements in the direction of the
relevant market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction being
hedged and the price movements of the futures contract. For example, if a
Portfolio uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Portfolio will lose part or all of the benefit
of the increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. Furthermore, if in such
circumstances the Portfolio has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. A Portfolio may have to
sell such securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Portfolio may be required to segregate permissible
liquid assets in connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity. The segregation of
such assets will have the effect of limiting the Portfolio's ability otherwise
to invest those assets.
SPECIFIC FUTURES TRANSACTIONS. Each Portfolio may purchase and sell stock index
futures contracts. A stock index future obligates the Portfolio to pay or
receive an amount of cash equal to a fixed dollar amount specified in the
futures contract multiplied by the difference between the settlement price of
the contract on the contract's last trading day and the value of the index based
on the stock prices of the securities that comprise it at the opening of trading
in such securities on
the next business day.
The Core Value Portfolio may purchase and sell currency futures. A
foreign currency future obligates the Portfolio to purchase or sell an amount of
a specific currency at a future date at a specific price.
Each Portfolio may purchase and sell interest rate futures contracts.
An interest rate future obligates the Portfolio to purchase or sell an amount of
a specific debt security at a future date at a specific price.
OPTIONS--IN GENERAL. Each Portfolio may purchase and write (i.e., sell) call or
put options with respect to specific securities. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell, the
underlying security or securities at the exercise price at any time during the
option period, or at a specific date. Conversely, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at any time during the
option period, or at a specific date.
A covered call option written by a Portfolio is a call option with
respect to which the Portfolio owns the underlying security or otherwise covers
the transaction by segregating cash or other securities. A put option written by
a Portfolio is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option are
placed in a segregated account to fulfill the obligation undertaken. The
principal reason for writing covered call and put options is to realize, through
the receipt of premiums, a greater return than would be realized on the
underlying securities alone. A Portfolio receives a premium from writing covered
call or put options which it retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Portfolio is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
SPECIFIC OPTIONS TRANSACTIONS. Each Portfolio may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
Each Portfolio may purchase and sell call and put options on foreign
currency. These options convey the right to buy or sell the underlying currency
at a price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
Each Portfolio may purchase cash-settled options on equity index swaps
in pursuit of its investment objective. Equity index swaps involve the exchange
by the Portfolio with another party of cash flows based upon the performance of
an index or a portion of an index of securities which usually includes
dividends. A cash-settled option on a swap gives the purchaser the right, but
not the obligation, in return for the premium paid, to receive an amount of cash
equal to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by a Portfolio of options will be subject to the
ability of the Manager to predict correctly movements in the prices of
individual stocks, the stock market generally, foreign currencies or interest
rates. To the extent such predictions are incorrect, a Portfolio may incur
losses.
FUTURE DEVELOPMENTS. (Both Portfolios) A Portfolio may take advantage
of opportunities in the area of options and futures contracts and options on
futures contracts and any other Derivatives which are not presently contemplated
for use by the Portfolio or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Portfolio's investment objective and legally permissible for the Portfolio.
Before entering into such transactions or making any such investment on behalf
of a Portfolio, the Fund will provide appropriate disclosure in its Prospectus
or Statement of Additional Information.
FORWARD COMMITMENTS. (Both Portfolios) Securities purchased on a
forward commitment or when-issued basis are subject to changes in value
(generally changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Securities purchased on a forward
commitment or when-issued basis may expose a Portfolio to risks because they may
experience such fluctuations prior to their actual delivery. Purchasing
securities on a when-issued basis can involve the additional risk that the yield
available in the market when the delivery takes place actually may be higher
than that obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when a Portfolio is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Portfolio's net assets and its net asset value per share.
INVESTMENT CONSIDERATIONS AND RISKS
LOWER RATED SECURITIES. (Core Value Portfolio) The Core Value
Portfolio is permitted to invest up to 5% of the value of its net assets in
securities rated Ba or lower by Moody's Investors Service, Inc. ("Moody's") or
BB or lower by Standard & Poor's Ratings Group ("S&P"), Fitch IBCA, Inc.
("Fitch") and Duff & Phelps Credit Rating Co. ("Duff") and as low as the lowest
rating assigned by Moody's, S&P, Fitch and Duff. Such securities, though higher
yielding, are characterized by risk. See "Appendix" for a general description of
Moody's, S&P, Fitch and Duff ratings. Although ratings may be useful in
evaluating the safety of interest and principal payments, they do not evaluate
the market value risk of these securities. The Core Value Portfolio will rely on
the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities. These securities generally are considered by S&P, Moody's,
Fitch and Duff to be, on balance, predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in the
higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of such
issuers generally is greater than is the case with higher rated securities and
will fluctuate over time. For example, during an economic downturn or a
sustained period of rising interest rates, highly leveraged issuers of these
securities may experience financial stress. During such periods, such issuers
may not have sufficient revenues to meet their interest payment obligations. The
issuer's ability to service its debt obligations also may be affected adversely
by specific corporate developments, or the issuer's inability to meet specific
projected business forecasts, or the unavailability of additional financing. The
risk of loss because of default by the issuer is significantly greater for the
holders of these securities because such securities generally are unsecured and
often are subordinated to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold only
to a limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is not as
liquid as the secondary market for higher rated securities. The lack of a liquid
secondary market may have an adverse impact on market price and yield and the
Portfolio's ability to dispose of particular issues when necessary to meet such
Portfolio's liquidity needs or in response to a specific economic event such as
a deterioration in the creditworthiness of the issuer. The lack of a liquid
security market for certain securities also may make it more difficult for the
Portfolio to obtain accurate market quotations for purposes of valuing its
portfolio and calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play a
greater role in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to economic
downturns. It is likely that any economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.
The Core Value Portfolio may acquire these securities during an
initial offering. Such securities may involve special risks because they are new
issues. The Fund has no arrangement with any persons concerning the acquisition
of such securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
INVESTMENT RESTRICTIONS
Each Portfolio has adopted investment restrictions numbered 1 through
10 as fundamental policies. These restrictions cannot be changed, as to a
Portfolio, without approval by the holders of a majority (as defined in the 1940
Act) of such Portfolio's outstanding voting shares. Investment restrictions
numbered 11 and 15 are not fundamental policies and may be changed, as to a
Portfolio, by vote of a majority of the Fund's Board members at any time.
Neither Portfolio may:
1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
2. Invest more than 5% of its assets in the obligations of any one
issuer, except that up to 25% of the value of the Portfolio's total assets may
be invested, and securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities may be purchased, without regard to any such
limitations.
3. Purchase the securities of any issuer if such purchase would cause
the Portfolio to hold more than 10% of the voting securities of such issuer.
This restriction applies only with respect to 75% of the Portfolio's total
assets.
4. Invest in commodities, except that a Portfolio may purchase and
sell options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but a Portfolio may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Portfolio's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.
7. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, a Portfolio may
lend its portfolio securities in an amount not to exceed 33-1/3% of the value of
its total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the Fund's
Board.
8. Act as an underwriter of securities of other issuers, except to the
extent a Portfolio may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 4, 6, 12 and 13 may be deemed to give rise to a senior
security.
10. Purchase securities on margin, but a Portfolio may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those relating to indices, and options on futures contracts
or indices.
11. Invest in the securities of a company for the purpose of
exercising management or control, but the Portfolio will vote the securities it
owns as a shareholder in accordance with its views.
12. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
13. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Prospectus and Statement of Additional Information.
14. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15% of the value of its net assets would be so
invested.
15. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
* * *
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
In addition, each Portfolio has adopted the following policies as
non-fundamental policies. Each Portfolio intends (i) to comply with the
diversification requirements prescribed in regulations under Section 817(h) of
the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) to comply
in all material respects with insurance laws and regulations that the Fund has
been advised are applicable to investments of separate accounts of Participating
Insurance Companies. As non-fundamental policies, these policies may be changed
by vote of a majority of the Board members at any time.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five years, are
shown below.
BOARD MEMBERS OF THE FUND
[TO BE PROVIDED]
There ordinarily will be no meetings of shareholders for the purpose
of electing Board members unless and until such time as less than a majority of
the Board members holding office have been elected by shareholders, at which
time the Board members then in office will call a shareholders' meeting for the
election of Board members. Under the 1940 Act, shareholders of record of not
less than two-thirds of the outstanding shares of the Fund may remove a Board
members through a declaration in writing or by vote cast in person or by proxy
at a meeting called for that purpose. The Board members are required to call a
meeting of shareholders for the purpose of voting upon the question of removal
of any such Board members when requested in writing to do so by the shareholders
of record of not less than 10% of the Fund's outstanding shares.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the Board
receives an additional 25% of such compensation. Emeritus Board members are
entitled to receive an annual retainer and a per meeting fee of one-half the
amount paid to them as Board members. The aggregate amount of compensation
estimated to be paid to each Board member by the Fund, and by all other funds in
the Dreyfus Family of Funds for which such person is a Board member (the number
of which is set forth in parenthesis next to each Board member's total
compensation) for the year ending December 31, 1998, is as follows:
Total Compensation
From Fund and Fund
Complex Paid to Board
Name of Board Member Aggregate Compensation Member
From Fund
OFFICERS OF THE FUND
MARIE E. CONNOLLY, PRESIDENT AND TREASURER. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by the Manager. She is 40 years old.
DOUGLAS C. CONROY, VICE PRESIDENT AND ASSISTANT SECRETARY. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From April
1993 to January 1995, he was a Senior Fund Accountant for Investors
Bank & Trust Company. From December 1991 to March 1993, he was employed
as a Fund Accountant at The Boston Company, Inc. He is 28 years old.
RICHARD W. INGRAM, VICE PRESIDENT AND ASSISTANT TREASURER. Executive Vice
President of the Distributor and Funds Distributor, Inc., and an
officer of other investment companies advised or administered by the
Manager. From March 1994 to November 1995, he was Vice President and
Division Manager for First Data Investor Services Group. From 1989 to
1994, he was Vice President, Assistant Treasurer and Tax
Director--Mutual Funds at The Boston Company, Inc. He is 42 years old.
MICHAEL S. PETRUCELLI, VICE PRESIDENT AND ASSISTANT TREASURER. Senior Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
December 1989 through November 1996, he was employed by GE Investments
where he held various financial, business development and compliance
positions. He also served as Treasurer of the GE Funds and as a
Director of GE Investment Services. He is 36 years old.
MARY A. NELSON, VICE PRESIDENT AND ASSISTANT TREASURER. Vice
President of the Distributor and Funds Distributor, Inc.,
and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July
1994, she was an Assistant Vice President and Client
Manager for The Boston Company, Inc. She is 33 years old.
JOSEPH F. TOWER, III, VICE PRESIDENT AND ASSISTANT TREASURER. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From July
1988 to August 1994, he was employed by The Boston Company, Inc. where
he held various management positions in the Corporate Finance and
Treasury areas. He is 35 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
MANAGEMENT AGREEMENT
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "MANAGEMENT OF
THE FUND."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") with the Fund dated __________, 1998. As to each
Portfolio, the Agreement is subject to annual approval by (i) the Fund's Board
or (ii) vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of such Portfolio, provided that in either event the
continuance also is approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. As to each Portfolio, the Agreement is terminable without penalty, on
60 days' notice, by the Fund's Board or by vote of the holders of a majority of
the shares of such Portfolio, or, upon not less than 90 days' notice, by the
Manager. The Agreement will terminate automatically, as to the relevant
Portfolio, in the event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash, Vice
Chairman-Distribution and a director; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; Mark N. Jacobs, Vice President, General
Counsel and Secretary; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Services; William V. Healey, Assistant Secretary; and
Mandell L. Berman, Burton C. Borgelt, Frank V. Cahouet and Richard F. Syron,
directors.
The Manager manages the investments of each Portfolio in accordance
with the stated policies of the Portfolio, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions, and provides the
Fund with portfolio managers who are authorized by the Fund's Board to execute
purchases and sales of securities. The portfolio managers who comprise the
committee responsible for making investment decisions for Dreyfus Core Value
Portfolio are _______________ and _______________. The portfolio managers of
Dreyfus MidCap Stock Portfolio are John O'Toole and _________________.
The Manager also maintains a research department with professional
portfolio managers and securities analysts who provide research services for the
Fund and for other funds advised by the Manager.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The expenses
borne by the Fund include: organizational costs, taxes, interest, loan
commitment fees, dividends and interest on securities sold short, brokerage fees
and commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of the
Manager or any of its affiliates, Securities and Exchange Commission fees, state
Blue Sky qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining the
Fund's existence, costs of independent pricing services, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders, and any extraordinary
expenses. Expenses attributable to a particular Portfolio are charged against
the assets of that Portfolio; other expenses of the Fund are allocated between
the Portfolios on the basis determined by the Fund's Board, including, but not
limited to, proportionately in relation to the net assets of each Portfolio.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a Portfolio's assets increases.
PURCHASE OF SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO BUY
SHARES."
THE DISTRIBUTOR. The Distributor serves as the Fund's distributor on a
best efforts basis pursuant to an agreement which is renewable annually. The
Distributor also acts as distributor for the other funds in the Dreyfus Family
of Funds and for certain other investment companies.
REDEMPTION OF SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO REDEEM
SHARES."
REDEMPTION COMMITMENT. The Fund has committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of a Portfolio's net
assets at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In the case of
requests for redemption in excess of such amount, the Fund's Board reserves the
right to make payments in whole or part in securities or other assets of the
Portfolio in case of an emergency or any time a cash distribution would impair
the liquidity of the Portfolio to the detriment of the existing shareholders. In
such event, the securities would be valued in the same manner as the Portfolio's
investments are valued. If the recipient sold such securities, brokerage charges
might be incurred.
SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b) when
trading in the markets the Fund ordinarily utilizes is restricted, or when an
emergency exists as determined by the Securities and Exchange Commission so that
disposal of the Fund's investments or determination of its net asset value is
not reasonably practicable, or (c) for such other periods as the Securities and
Exchange Commission by order may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO BUY
SHARES."
Each Portfolio's investment securities are valued at the last sale
price on the securities exchange or national securities market on which such
securities are primarily traded. Securities not listed on an exchange or
national securities market, or securities in which there were no transactions,
are valued at the average of the most recent bid and asked prices, except in the
case of open short positions where the asked price is used for valuation
purposes. Bid price is used when no asked price is available. Market quotations
for foreign securities in foreign currencies are translated into U.S. dollars at
the prevailing rates of exchange. Because of the need to obtain prices as of the
close of trading on various exchanges throughout the world, the calculation of
net asset value may not take place contemporaneously with the determination of
prices of many of the Portfolio's investment securities. Short-term investments
are carried at amortized cost, which approximates value. Any securities or other
assets for which recent market quotations are not readily available are valued
at fair value as determined in good faith by the Fund's Board. Expenses and
fees, including the management fee (reduced by the expense limitation, if any),
are accrued daily and taken into account for the purpose of determining the net
asset value of shares.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Fund's Board, are valued at fair value as determined in
good faith by the Fund's Board. The Fund's Board will review the method of
valuation on a current basis. In making their good faith valuation of restricted
securities, the Board members generally will take the following factors into
consideration: restricted securities which are, or are convertible into,
securities of the same class of securities for which a public market exists
usually will be valued at market value less the same percentage discount at
which purchased. This discount will be revised periodically by the Fund's Board
if the Board members believe that it no longer reflects the value of the
restricted securities. Restricted securities not of the same class as securities
for which a public market exists usually will be valued initially at cost. Any
subsequent adjustment from cost will be based upon considerations deemed
relevant by the Fund's Board.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "DIVIDENDS,
DISTRIBUTIONS AND TAXES."
It is expected that each Portfolio will qualify as a regulated
investment company under the Code. Each Portfolio intends to continue to so
qualify as long as such qualification is in the best interests of its
shareholders. As a regulated investment company, each Portfolio will pay no
Federal income tax on net investment income and net realized securities gains to
the extent that such income and gains are distributed to shareholders in
accordance with applicable provisions of the Code. To qualify as a regulated
investment company, the Portfolio must distribute at least 90% of its net income
(consisting of net investment income and net short-term capital gain) to its
shareholders, and meet certain asset diversification and other requirements. The
term "regulated investment company" does not imply the supervision of management
or investment practices or policies by any government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the aggregate net asset value of the shares
below the cost of the investment. Such a dividend or distribution would be a
return of investment in an economic sense, although taxable as stated in the
Prospectus. In addition, the Code provides that if a shareholder holds shares of
the Portfolio for six months or less and has received a capital gain
distribution with respect to such shares, any loss incurred on the sale of such
shares will be treated as long-term capital loss to the extent of the capital
gain distribution received.
A Portfolio may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a credit
or deduction on their Federal income tax returns for, and will be required to
treat as part of the amounts distributed to them, their pro rata portion of
qualified taxes paid or incurred by the Portfolio to foreign countries (which
taxes relate primarily to investment income). The Portfolio may make an election
under Section 853 of the Code, provided that more than 50% of the value of the
Portfolio's total assets at the close of the taxable year consists of securities
in foreign corporations, and the Portfolio satisfies the applicable distribution
provisions of the Code. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or loss
realized from the disposition of foreign currencies (including foreign currency
denominated bank deposits) and non-U.S. dollar denominated securities (including
debt instruments, certain financial futures or forward contracts and options)
may be treated as ordinary income or loss under Section 988 of the Code. In
addition, all or a portion of any gain realized from the sale or other
disposition of certain market discount bonds will be treated as ordinary income
under Section 1276 of the Code. Finally, all or a portion of the gain realized
from engaging in "conversion transactions" may be treated as ordinary income
under Section 1258 of the Code. "Conversion transactions" are defined to include
certain forward, futures, option and straddle transactions, transactions
marketed or sold to produce capital gains, or transactions described in Treasury
regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss realized by a
Portfolio from certain financial futures or forward contracts and options
transactions (other than those taxed under Section 988 of the Code) will be
treated as 60% long-term capital gain or loss and 40% short-term capital gain
or loss. Gain or loss will arise upon the exercise or lapse of such futures and
options as well as from closing transactions. In addition, any such contract or
option remaining unexercised at the end of the Fund's taxable year will be
treated as sold for their then fair market value, resulting in additional gain
or loss to the Fund characterized in the manner described above.
Offsetting positions held by a Portfolio involving certain futures or
forward contracts or options transactions may be considered, for tax purposes,
to constitute "straddles." Straddles are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of straddles
is governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, override or modify the provisions of Sections 988 and 1256 of the
Code. As such, all or a portion of any short- or long-term capital gain from
certain straddle transactions may be recharacterized as ordinary income.
If a Portfolio were treated as entering into straddles by reason of
its engaging in certain futures or forward contracts or options transactions,
such straddles could be characterized as "mixed straddles" if the futures or
forward contracts or options transactions comprising such straddles were
governed by Section 1256 of the Code. The Portfolio may make one or more
elections with respect to "mixed straddles." Depending upon which election is
made, if any, the results to the Portfolio may differ. If no election is made,
to the extent the straddle rules apply to positions established by the
Portfolio, losses realized by the Fund will be deferred to the extent of
unrealized gain in any offsetting positions. Moreover, as a result of the
straddle and conversion transaction rules, short-term capital loss on straddle
positions may be recharacterized as long-term capital loss, and long-term
capital gain on straddle positions may be treated as short-term capital gain or
ordinary income.
The Taxpayer Relief Act of 1997 included constructive sale provisions
that generally will apply if a Fund either (1) holds an appreciated financial
position with respect to stock, certain debt obligations, or partnership
interests ("appreciated financial position") and then enters into a short sale,
futures or forward contract or offsetting notional principal contract
(collectively, a "Contract") with respect to the same or substantially identical
property or (2) holds an appreciated financial position that is a Contract and
then acquires property that is the same as, or substantially identical to, the
underlying property. In each instance, with certain exceptions, the Fund
generally will be taxed as if the appreciated financial position were sold at
its fair market value on the date the Fund enters into the financial position or
acquires the property, respectively. Transactions that are identified hedging or
straddle transactions under other provisions of the Code can be subject to the
constructive sale provisions.
Investment by a Portfolio in securities issued or acquired at a
discount, or providing for deferred interest or for payment of interest in the
form of additional obligations could under special tax rules, affect the amount,
timing and character of distributions to shareholders by causing the Portfolio
to recognize income prior to the receipt of cash payments. For example, the
Portfolio could be required to accrue a portion of the discount (or deemed
discount) at which the securities were issued each year and to distribute such
income in order to maintain its qualification as a regulated investment
company. In such case, the Portfolio may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
Shareholders of the Fund will be variable annuity and variable life
insurance separate accounts established by insurance companies to fund Policies
and Eligible Plans. The Secretary of the Treasury may in the future issue
additional regulations or revenue rulings that will prescribe the circumstances
in which a Policy owner's control of the investments of a separate account may
cause the Policy owner, rather than the insurance company, to be treated as the
owner of assets of the separate account. Failure to comply with Section 817(h)
of the Code or any regulation thereunder, or with any regulations or revenue
rulings on Policy owner control, if promulgated, would cause earnings regarding
a Policy owner's interest in the separate account to be includable in the Policy
owner's gross income in the year earned.
The Fund will not report dividends paid to Eligible Plans to the
Internal Revenue Service ("IRS"). Generally, distributions from Eligible Plans,
except those representing returns of non-deductible contributions thereto, will
be taxable as ordinary income and, if made prior to the time the participant
reaches age 59-1/2, generally will be subject to an additional tax equal to 10%
of the taxable portion of the distribution. If the distribution from an Eligible
Plan (other than certain governmental or church plans) for any taxable year
following the year in which the participant reaches age 70-1/2 is less than the
"minimum required distribution" for that taxable year, an excise tax equal to
50% of the deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a Plan will be responsible for reporting distributions from
the Plan to the IRS. Participants in Eligible Plans will receive a disclosure
statement describing the consequences of a distribution from the Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to an Eligible Plan in excess of
the amounts permitted by law may be subject to an excise tax. For more
information concerning the Federal income tax consequences, Policy owners should
refer to the prospectus for their contracts or policies and Eligible Plan
participants should consult the Plan's administrator or trustee.
PORTFOLIO TRANSACTIONS
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and analysis
with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds or
accounts and, conversely, research services furnished to the Manager by brokers
in connection with other funds or accounts may be used in advising a Portfolio.
Although it is not possible to place a dollar value on these services, it is the
opinion of the Manager that the receipt and study of such services should not
reduce the overall research department expenses.
Brokers also will be selected because of their ability to handle
special executions such as are involved in large block trades or broad
distributions, provided the primary consideration is met. Large block trades
may, in certain cases, result from two or more funds in the Dreyfus Family of
Funds being engaged simultaneously in the purchase or sale of the same security.
Certain of the Portfolios' transactions in securities of foreign issuers may not
benefit from the negotiated commission rates available for transactions in
securities of domestic issuers. Higher portfolio turnover rates are likely to
result in comparatively greater brokerage expenses. The overall reasonableness
of brokerage commissions paid is evaluated based upon knowledge of available
information as to the general level of commissions paid by other institutional
investors for comparable services.
PERFORMANCE INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "PERFORMANCE
INFORMATION."
Performance figures for the Portfolios will not reflect the separate
charges applicable to the variable annuity contracts and variable life policies
offered by Participating Insurance Companies.
Current yield is computed pursuant to a formula which operates as
follows: The amount of the relevant Portfolio's expenses accrued for the 30-day
period (net of reimbursements) is subtracted from the amount of the dividends
and interest earned (computed in accordance with regulatory requirements) by
such Series during the period. That result is then divided by the product of:
(a) the average daily number of such Portfolio's shares outstanding during the
period that were entitled to receive dividends, and (b) the net asset value per
share on the last day of the period less any undistributed earned income per
share reasonably expected to be declared as a dividend shortly thereafter. The
quotient is then added to 1, and that sum is raised to the 6th power, after
which 1 is subtracted. The current yield is then arrived at by multiplying the
result by 2.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000 payment
made at the beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period) and
subtracting 1 from the result.
Total return is calculated by subtracting the amount of the relevant
Portfolio's net asset value per share at the beginning of a stated period from
the net asset value per share at the end of the period (after giving effect to
the reinvestment of dividends and distributions during the period), and dividing
the result by the net asset value per share at the beginning of the period.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic or financial conditions, developments
and/or events. From time to time advertising materials for the Fund also may
refer to Morningstar ratings and related analyses supporting the rating. From
time to time, advertising materials from the Fund may refer to, or include,
commentary by the Fund's portfolio managers relating to their investment
strategy, asset growth of the Portfolio, current or past business, political,
economic or financial conditions and other matters of general interest to
shareholders.
INFORMATION ABOUT THE FUND
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "GENERAL
INFORMATION."
Each Portfolio share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Shares have no preemptive, subscription or conversion rights and are freely
transferable.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of any investment
company, such as the Fund, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. However, the Rule exempts the selection of
independent accountants and the election of Board members from the separate
voting requirements of the rule.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund, the
Transfer Agent arranges for the maintenance of shareholder account records for
the Fund, the handling of certain communications between shareholders and the
Fund and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee computed on the basis
of the number of shareholder accounts it maintains for the Fund during the
month, and is reimbursed for certain out-of-pocket expenses.
Mellon Bank, N.A., the Manager's parent, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, serves as the Fund's Custodian. Under a custody
agreement with the Fund, Mellon Bank, N.A. holds each Portfolio's securities and
keeps all necessary accounts and records. For its custody services, Mellon Bank,
N.A. receives a monthly fee based on the market value of each Portfolio's assets
held in custody and receives certain securities transaction charges.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
<PAGE>
APPENDIX
Description of certain ratings:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned to a debt obligation.
Capacity to pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade bonds. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payment.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to bonds subordinated to senior
debt which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to bonds subordinated to senior debt
which is assigned an actual or implied CCC- rating.
D
Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus or a
minus sign, which is used to show relative standing within the major ratings
categories, except in the AAA (Prime Grade) category.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus sign (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca
Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a rating for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default in payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual default of interest and/or
principal payments. Such bonds are extremely speculative and should be valued on
the basis of their ultimate recovery value in liquidation or reorganization of
the obligor. DDD represents the highest potential for recovery on these bonds
and D represents the lowest potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. Considerable
variability in risk exists during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial protection
factors fluctuate according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are narrow
and risk can be substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
DD
Defaulted debt obligations. Issuer has failed to meet scheduled
principal and/or interest payments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor.
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITORS
[TO BE PROVIDED]
<PAGE>
DREYFUS INVESTMENT PORTFOLIOS
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements included in the Statement of Additional
Information:
(1) Statements of Assets and Liabilities as of _______, 1998*
(2) Reports of Ernst & Young LLP, Independent Auditors, dated
______________, 1998*
(b) Exhibits:
(1) Agreement and Declaration of Trust
(2) By-Laws
(5) Form of Management Agreement
(6) Form of Distribution Agreement
(8) Form of Custody Agreement
(10) Opinion, including consent, of Stroock & Stroock & Lavan LLP*
(11) Consent of Independent Auditors*
(16) Schedules of Computation of Performance Data*
(17) Financial Data Schedule*
Other Exhibit: Assistant Secretary's Certificate*
- ----------------
* To be filed by Amendment.
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Number of Record
Title Of Class Holders
Beneficial Interests, par value
$.001 per share
Dreyfus Core Value Portfolio -0-
Dreyfus Midcap Stock Portfolio -0-
ITEM 27. INDEMNIFICATION
Reference is made to Article EIGHTH of the Registrant's Agreement and
Declaration of Trust filed as Exhibit 1 hereto. The application of these
provisions is limited by Article 10 of the Registrant's By-Laws filed as Exhibit
2 hereto and by the following undertaking set forth in the rules promulgated by
the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Board members, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a Board member, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such Board member, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in such Act and will be
governed by the final adjudication of such issue.
Reference also is made to the form of Distribution Agreement filed as
Exhibit 6 hereto.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The Dreyfus Corporation ("Dreyfus") and its subsidiary companies
comprise a financial service organization whose business consists primarily of
providing investment management services as the investment adviser and manager
for investment companies registered under the Investment Company Act of 1940 and
as an investment adviser to institutional and individual accounts. Dreyfus also
serves as sub investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
serves primarily as a registered broker-dealer of shares of investment companies
sponsored by Dreyfus and of other investment companies for which Dreyfus acts as
investment adviser, sub-investment adviser or administrator. Dreyfus Management,
Inc., another wholly-owned subsidiary, provides investment management services
to various pension plans, institutions and individuals.
OFFICERS AND DIRECTORS OF DREYFUS
Name and Position
WITH DREYFUS OTHER BUSINESSES
MANDELL L. BERMAN Real estate consultant and private
Director investor
29100 Northwestern Highway--Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees
of Skillman Foundation;
Member of the Board of Vintners
International
BURTON C. BORGELT Chairman Emeritus of the Board and Past
Director Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation;***
Mellon Bank, N.A.;***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation;***
Mellon Bank, N.A.;***
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company;****
Vice Chairman of the Board:
Mellon Bank Corporation;***
Mellon Bank, N.A.;***
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman
President, Chief Mellon Bank Corporation;***
Executive Officer, Chief The Boston Company;****
Operating Officer and Deputy Director:
a Director Mellon Trust;***
Chief Executive Officer:
The Boston Company Asset Management,
Inc.;****
President:
Boston Safe Deposit and Trust
Company****
STEPHEN E. CANTER Director:
Vice Chairman, Chief The Dreyfus Trust Company;++
Investment Officer and Former Chairman and Chief Executive
a Director Officer:
Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman--Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.;**
Director:
Dreyfus America Fund;+++
The Dreyfus Consumer Credit
Corporation;*
The Dreyfus Trust Company;++
Dreyfus Service Corporation;*
World Balanced Fund;++++
President:
The Boston Company;****
Laurel Capital Advisors;***
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.;***
Boston Safe Deposit and Trust
Company****
WILLIAM T. SANDALLS, JR. Director: Dreyfus Partnership
Senior Vice President and Management, Inc.;*
Chief Financial Officer Seven Six Seven Agency, Inc.;*
President and Director:
Lion Management, Inc.;*
Executive Vice President and Director:
Dreyfus Service Organization, Inc.;*
Vice President, Chief Financial Officer
and Director:
Dreyfus Acquisition Corporation;*
Dreyfus American Fund;+++
World Balanced Fund;++++
Vice President and Director:
The Dreyfus Consumer Credit
Corporation;*
The Truepenny Corporation;*
Treasurer, Financial Officer and
Director:
The Dreyfus Trust Company;++
Treasurer and Director:
Dreyfus Management, Inc.;*
Dreyfus Personal Management, Inc.;*
Dreyfus Service Corporation;*
Major Trading Corporation;*
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.;*
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit
Corporation;*
Dreyfus Management, Inc.;*
Assistant Secretary:
Dreyfus Service Organization, Inc.;**
Major Trading Corporation;*
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Dreyfus Transfer, Inc.
Fund Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
- -------------------
* The address of the business so indicated is 200 Park Avenue,
New York, New York 10166.
** The address of the business so indicated is 131 Second
Street, Lewes, Delaware 19958.
*** The address of the business so indicated is One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston
Place, Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route 'd'
Esch, L-1470, Luxembourg.
++++ The address of the business so indicated is 69, Route 'd'
Esch, L-1470, Luxembourg.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Other investment companies for which Registrant's prin cipal
underwriter (exclusive distributor) acts as principal
underwriter or exclusive distributor:
1. Comstock Partners Funds, Inc.
2. Dreyfus A Bonds Plus, Inc.
3. Dreyfus Appreciation Fund, Inc.
4. Dreyfus Asset Allocation Fund, Inc.
5. Dreyfus Balanced Fund, Inc.
6. Dreyfus BASIC GNMA Fund
7. Dreyfus BASIC Money Market Fund, Inc.
8. Dreyfus BASIC Municipal Fund, Inc.
9. Dreyfus BASIC U.S. Government Money Market Fund
10. Dreyfus California Intermediate Municipal Bond Fund
11. Dreyfus California Tax Exempt Bond Fund, Inc.
12. Dreyfus California Tax Exempt Money Market Fund
13. Dreyfus Cash Management
14. Dreyfus Cash Management Plus, Inc.
15. Dreyfus Connecticut Intermediate Municipal Bond Fund
16. Dreyfus Connecticut Municipal Money Market Fund, Inc.
17. Dreyfus Florida Intermediate Municipal Bond Fund
18. Dreyfus Florida Municipal Money Market Fund
19. The Dreyfus Fund Incorporated
20. Dreyfus Global Bond Fund, Inc.
21. Dreyfus Global Growth Fund
22. Dreyfus GNMA Fund, Inc.
23. Dreyfus Government Cash Management
24. Dreyfus Growth and Income Fund, Inc.
25. Dreyfus Growth and Value Funds, Inc.
26. Dreyfus Growth Opportunity Fund, Inc.
27. Dreyfus Income Funds
28. Dreyfus Institutional Money Market Fund
29. Dreyfus Institutional Short Term Treasury Fund
30. Dreyfus Insured Municipal Bond Fund, Inc.
31. Dreyfus Intermediate Municipal Bond Fund, Inc.
32. Dreyfus International Funds, Inc.
33. Dreyfus Investment Grade Bond Funds, Inc.
34. The Dreyfus/Laurel Funds, Inc.
35. The Dreyfus/Laurel Funds Trust
36. The Dreyfus/Laurel Tax-Free Municipal Funds
37. Dreyfus Lifetime Portfolios, Inc.
38. Dreyfus Liquid Assets, Inc.
39. Dreyfus Massachusetts Intermediate Municipal Bond Fund
40. Dreyfus Massachusetts Municipal Money Market Fund
41. Dreyfus Massachusetts Tax Exempt Bond Fund
42. Dreyfus MidCap Index Fund
43. Dreyfus Money Market Instruments, Inc.
44. Dreyfus Municipal Bond Fund, Inc.
45. Dreyfus Municipal Cash Management Plus
46. Dreyfus Municipal Money Market Fund, Inc.
47. Dreyfus New Jersey Intermediate Municipal Bond Fund
48. Dreyfus New Jersey Municipal Bond Fund, Inc.
49. Dreyfus New Jersey Municipal Money Market Fund, Inc.
50. Dreyfus New Leaders Fund, Inc.
51. Dreyfus New York Insured Tax Exempt Bond Fund
52. Dreyfus New York Municipal Cash Management
53. Dreyfus New York Tax Exempt Bond Fund, Inc.
54. Dreyfus New York Tax Exempt Intermediate Bond Fund
55. Dreyfus New York Tax Exempt Money Market Fund
56. Dreyfus 100% U.S. Treasury Intermediate Term Fund
57. Dreyfus 100% U.S. Treasury Long Term Fund
58. Dreyfus 100% U.S. Treasury Money Market Fund
59. Dreyfus 100% U.S. Treasury Short Term Fund
60. Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61. Dreyfus Pennsylvania Municipal Money Market Fund
62. Dreyfus S&P 500 Index Fund
63. Dreyfus Short-Intermediate Government Fund
64. Dreyfus Short-Intermediate Municipal Bond Fund
65. The Dreyfus Socially Responsible Growth Fund, Inc.
66. Dreyfus Stock Index Fund
67. Dreyfus Tax Exempt Cash Management
68. The Dreyfus Third Century Fund, Inc.
69. Dreyfus Treasury Cash Management
70. Dreyfus Treasury Prime Cash Management
71. Dreyfus Variable Investment Fund
72. Dreyfus Worldwide Dollar Money Market Fund, Inc.
73. General California Municipal Bond Fund, Inc.
74. General California Municipal Money Market Fund
75. General Government Securities Money Market Fund, Inc.
76. General Money Market Fund, Inc.
77. General Municipal Bond Fund, Inc.
78. General Municipal Money Market Fund, Inc.
79. General New York Municipal Bond Fund, Inc.
80. General New York Municipal Money Market Fund
81. Dreyfus Premier California Municipal Bond Fund
82. Dreyfus Premier Equity Funds, Inc.
83. Dreyfus Premier Global Investing, Inc.
84. Dreyfus Premier GNMA Fund
85. Dreyfus Premier Worldwide Growth Fund, Inc.
86. Dreyfus Premier Insured Municipal Bond Fund
87. Dreyfus Premier Municipal Bond Fund
88. Dreyfus Premier New York Municipal Bond Fund
89. Dreyfus Premier State Municipal Bond Fund
90. Dreyfus Premier Value Fund
(b)
Positions and offices with Positions and
Name and principal Premier Mutual offices with
Business Address Fund Services, Inc. Registrant
- ------------------ -------------------------- -------------
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Treasurer
Compliance Officer
Joseph F. Tower, III+ Senior Vice President, Vice President
Treasurer and Chief and Assistant
Financial Officer Treasurer
Richard W. Ingram Senior Vice President Vice President
and Assistant
Treasurer
Roy M. Moura + First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
- ----------------
+ Principal business address is 60 State Street, Boston,
Massachusetts 02109.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer Inc.
P.O. Box 9671
Providence, Rhode Island 02903-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
ITEM 31. MANAGEMENT SERVICES
Not Applicable
ITEM 32. UNDERTAKINGS
Registrant hereby undertakes
(1) to file a post-effective amendment, using financial statements
which need not be certified, within four to six months from the
effective date of Registrant's 1933 Act Registration Statement.
(2) to call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
(3) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 27th day of
February, 1998.
DREYFUS INVESTMENT PORTFOLIOS
(Registrant)
By:/S/MARIE E. CONNOLLY
Marie E. Connolly, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/S/MARIE E. CONNOLLY President (Principal February 27, 1998
Marie E. Connolly Executive Officer), Treasurer
and Board Member
/S/JOHN F. TOWER, III Assistant Treasurer February 27, 1998
John F. Tower, III (Principal Financial
and Accounting Officer)
<PAGE>
DREYFUS VARIABLE INSURANCE PORTFOLIOS
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
--------------------------------------
EXHIBITS
--------------------------------------
<PAGE>
INDEX TO EXHIBITS
PAGE
(1) Agreement and Declaration of Trust.........................
(2) By-Laws....................................................
(5) Form of Management Agreement...............................
(6) Form of Distribution Agreement.............................
(8) Form of Custody Agreement..................................
<PAGE>
EXHIBIT (1)
DREYFUS INVESTMENT PORTFOLIOS
(formerly, SSL-1993-7)
Amended and Restated Agreement and Declaration of Trust
THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST, made
this 27th day of February, 1998 hereby amends and restates in its entirety the
Agreement and Declaration of Trust made at Boston, Massachusetts, dated May 14,
1993 by the Trustee hereunder (hereinafter with any additional and successor
trustees referred to as the "Trustees") and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
W I T N E S S E T H :
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets, which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders from
time to time of Shares, whether or not certificated, in this Trust as
hereinafter set forth.
ARTICLE I
Name and Definitions
SECTION 1. NAME. This Trust shall be known as "Dreyfus Investment
Portfolios."
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The term "Commission" shall have the meaning provided in the 1940
Act;
(b) The "Trust" refers to the Massachusetts business trust established
by this Agreement and Declaration of Trust, as amended from time to time;
(c) "Shareholder" means a record owner of Shares of the Trust;
(d) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided from
time to time or, if more than one series or class of Shares is authorized by the
Trustees, the equal proportionate transferable units into which each series or
class of Shares shall be divided from time to time, and includes a fraction of a
Share as well as a whole Share;
(e) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The term "Manager" is defined in Article IV, Section 5;
(g) The term "Person" shall mean an individual or any corporation,
partnership, joint venture, trust or other enterprise;
(h) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(i) "By-Laws" shall mean the By-Laws of the Trust, as amended from
time to time;
(j) The term "series" or "series of Shares" refers to the one or more
separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Shares of the Trust representing
the beneficial interest of Shareholders in such respective portfolios; and
(k) The term "class" or "class of Shares" refers to the division of
Shares representing any series into two or more classes as provided in Article
III, Section 1 hereof.
ARTICLE II
Purposes of Trust
This Trust is formed for the following purpose or purposes:
(a) to conduct, operate and carry on the business of an investment
company;
(b) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, write options on, exchange,
distribute or otherwise dispose of and deal in and with securities of every
nature, kind, character, type and form, including, without limitation of the
generality of the foregoing, all types of stocks, shares, futures contracts,
bonds, debentures, notes, bills and other negotiable or non-negotiable
instruments, obligations, evidences of interest, certificates of interest,
certificates of participation, certificates, interests, evidences of ownership,
guarantees, warrants, options or evidences of indebtedness issued or created by
or guaranteed as to principal and interest by any state or local government or
any agency or instrumentality thereof, by the United States Government or any
agency, instrumentality, territory, district or possession thereof, by any
foreign government or any agency, instrumentality, territory, district or
possession thereof, by any corporation organized under the laws of any state,
the United States or any territory or possession thereof or under the laws of
any foreign country, bank certificates of deposit, bank time deposits, bankers'
acceptances and commercial paper; to pay for the same in cash or by the issue of
stock, including treasury stock, bonds or notes of the Trust or otherwise; and
to exercise any and all rights, powers and privileges of ownership or interest
in respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more persons, firms,
associations or corporations to exercise any of said rights, powers and
privileges in respect of any said instruments;
(c) to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the assets of the
Trust;
(d) to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in, Shares including
Shares in fractional denominations, and to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or other
assets of the appropriate series or class of Shares, whether capital or surplus
or otherwise, to the full extent now or hereafter permitted by the laws of The
Commonwealth of Massachusetts;
(e) to conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within and
without The Commonwealth of Massachusetts, in any and all States of the United
States of America, in the District of Columbia, and in any other parts of the
world; and
(f) to do all and everything necessary, suitable, convenient, or
proper for the conduct, promotion, and attainment of any of the businesses and
purposes herein specified or which at any time may be incidental thereto or may
appear conducive to or expedient for the accomplishment of any of such
businesses and purposes and which might be engaged in or carried on by a Trust
organized under the Massachusetts General Laws, and to have and exercise all of
the powers conferred by the laws of The Commonwealth of Massachusetts upon a
Massachusetts business trust.
The foregoing provisions of this Article II shall be construed both as
purposes and powers and each as an independent purpose and power.
ARTICLE III
Beneficial Interest
SECTION 1. SHARES OF BENEFICIAL INTEREST. The Shares of the Trust
shall be issued in one or more series as the Trustees may, without Shareholder
approval, authorize. Each series shall be preferred over all other series in
respect of the assets allocated to that series and shall represent a separate
investment portfolio of the Trust. The beneficial interest in each series at all
times shall be divided into Shares, with or without par value as the Trustees
may from time to time determine, each of which shall, except as provided in the
following sentence, represent an equal proportionate interest in the series with
each other Share of the same series, none having priority or preference over
another. The Trustees may, without Shareholder approval, divide Shares of any
series into two or more classes, Shares of each such class having such
preferences and special or relative rights and privileges (including conversion
rights, if any) as the Trustees may determine. The number of Shares authorized
shall be unlimited, and the Shares so authorized may be represented in part by
fractional shares. From time to time, the Trustees may divide or combine the
Shares of any series or class into a greater or lesser number without thereby
changing the proportionate beneficial interests in the series or class.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares will be
recorded in the books of the Trust or a transfer agent. The record books of the
Trust or any transfer agent, as the case may be, shall be conclusive as to who
are the holders of Shares of each series and class and as to the number of
Shares of each series and class held from time to time by each. No certificates
certifying the ownership of Shares need be issued except as the Trustees may
otherwise determine from time to time.
SECTION 3. ISSUANCE OF SHARES. The Trustees are authorized, from time
to time, to issue or authorize the issuance of Shares at not less than the par
value thereof, if any, and to fix the price or the minimum price or the
consideration (in cash and/or such other property, real or personal, tangible or
intangible, as from time to time they may determine) or minimum consideration
for such Shares. Anything herein to the contrary notwithstanding, the Trustees
may issue Shares pro rata to the Shareholders of a series at any time as a stock
dividend, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes of
Shares of that series, and any stock dividend to the Shareholders of a
particular class of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of them.
All consideration received by the Trust for the issue or sale of
Shares of each series, together with all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall belong irrevocably to the
series of Shares with respect to which the same were received by the Trust for
all purposes, subject only to the rights of creditors, and shall be so handled
upon the books of account of the Trust and are herein referred to as "assets of"
such series.
Shares may be issued in fractional denominations to the same extent as
whole Shares, and Shares in fractional denominations shall be Shares having
proportionately to the respective fractions represented thereby all the rights
of whole Shares, including, without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the Trust or of a particular series of Shares.
SECTION 4. NO PREEMPTIVE RIGHTS; DERIVATIVE SUITS. Shareholders shall
have no preemptive or other right to subscribe for any additional Shares or
other securities issued by the Trust. No action may be brought by a Shareholder
on behalf of the Trust or a series unless a prior demand regarding such matter
has been made on the Trustees and the Shareholders of the Trust or such series.
SECTION 5. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the same nor entitle the representative
of any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right to
call for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders partners. Neither the Trust nor
the Trustees, nor any officer, employee or agent of the Trust shall have any
power to bind any Shareholder or Trustee personally or to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder at any time personally may agree to pay by way of
subscription for any Shares or otherwise. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust shall include a recitation
limiting the obligation represented thereby to the Trust and its assets or the
assets of a particular series (but the omission of such a recitation shall not
operate to bind any Shareholder or Trustee personally).
ARTICLE IV
Trustees
SECTION 1. ELECTION. A Trustee may be elected either by the Trustees
or the Shareholders. The Trustees named herein shall serve until the first
meeting of the Shareholders or until the election and qualification of their
successors. Prior to the first meeting of Shareholders the initial Trustees
hereunder may elect additional Trustees to serve until such meeting and until
their successors are elected and qualified. The Trustees also at any time may
elect Trustees to fill vacancies in the number of Trustees. The number of
Trustees shall be fixed from time to time by the Trustees and, at or after the
commencement of the business of the Trust, shall be not less than three. Each
Trustee, whether referred to hereinafter or hereafter becoming a Trustee, shall
serve as a Trustee during the lifetime of this Trust, until such Trustee dies,
resigns, retires, or is removed, or, if sooner, until the next meeting of
Shareholders called for the purpose of electing Trustees and the election and
qualification of his successor. Subject to Section 16(a) of the 1940 Act, the
Trustees may elect their own successors and, pursuant to this Section, may
appoint Trustees to fill vacancies.
SECTION 2. POWERS. The Trustees shall have all powers necessary or
desirable to carry out the purposes of the Trust, including, without limitation,
the powers referred to in Article II hereof. Without limiting the generality of
the foregoing, the Trustees may adopt By-Laws not inconsistent with this
Declaration of Trust providing for the conduct of the business of the Trust and
may amend and repeal them to the extent that they do not reserve that right to
the Shareholders; they may fill vacancies in their number, including vacancies
resulting from increases in their own number, and may elect and remove such
officers and employ, appoint and terminate such employees or agents as they
consider appropriate; they may appoint from their own number and terminate any
one or more committees; they may employ one or more custodians of the assets of
the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent and a Shareholder servicing
agent, or both, provide for the distribution of Shares through a principal
underwriter or otherwise, set record dates, and in general delegate such
authority as they consider desirable (including, without limitation, the
authority to purchase and sell securities and to invest funds, to determine the
net income of the Trust for any period, the value of the total assets of the
Trust and the net asset value of each Share, and to execute such deeds,
agreements or other instruments either in the name of the Trust or the names of
the Trustees or as their attorney or attorneys or otherwise as the Trustees from
time to time may deem expedient) to any officer of the Trust, committee of the
Trustees, any such employee, agent, custodian or underwriter or to any Manager.
Without limiting the generality of the foregoing, the Trustees shall
have full power and authority:
(a) To invest and reinvest cash and to hold cash uninvested;
(b) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(c) To hold any security or property in a form not indicating any
trust whether in bearer, unregistered or other negotiable form or in the name of
the Trust or a custodian, subcustodian or other depository or a nominee or
nominees or otherwise;
(d) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or concern, and to pay calls or subscriptions
with respect to any security held in the Trust;
(e) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(f) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including, but not limited
to, claims for taxes;
(g) Subject to the provisions of Article III, Section 3, to allocate
assets, liabilities, income and expenses of the Trust to a particular series of
Shares or to apportion the same among two or more series, provided that any
liabilities or expenses incurred by a particular series of Shares shall be
payable solely out of the assets of that series; and to the extent necessary or
appropriate to give effect to the preferences and special or relative rights and
privileges of any classes of Shares, to allocate assets, liabilities, income and
expenses of a series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of that series;
(h) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(i) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or Managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or Manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability; and
(j) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.
Further, without limiting the generality of the foregoing, the
Trustees shall have full power and authority to incur and pay out of the
principal or income of the Trust such expenses and liabilities as may be deemed
by the Trustees to be necessary or proper for the purposes of the Trust;
PROVIDED, HOWEVER, that all expenses and liabilities incurred by or arising in
connection with a particular series of Shares, as determined by the Trustees,
shall be payable solely out of the assets of that series.
Any determination made in good faith and, so far as accounting matters
are involved, in accordance with generally accepted accounting principles by or
pursuant to the authority granted by the Trustees, as to the amount of the
assets, debts, obligations or liabilities of the Trust or a particular series or
class of Shares; the amount of any reserves or charges set up and the propriety
thereof; the time of or purpose for creating such reserves or charges; the use,
alteration or cancellation of any reserves or charges (whether or not any debt,
obligation or liability for which such reserves or charges shall have been
created shall have been paid or discharged or shall be then or thereafter
required to be paid or discharged); the price or closing bid or asked price of
any investment owned or held by the Trust or a particular series; the market
value of any investment or fair value of any other asset of the Trust or a
particular series; the number of Shares outstanding; the estimated expense to
the Trust or a particular series in connection with purchases of its Shares; the
ability to liquidate investments in an orderly fashion; and the extent to which
it is practicable to deliver a cross-section of the portfolio of the Trust or a
particular series in payment for any such Shares, or as to any other matters
relating to the issue, sale, purchase and/or other acquisition or disposition of
investments or Shares of the Trust or a particular series, shall be final and
conclusive, and shall be binding upon the Trust or such series and its
Shareholders, past, present and future, and Shares are issued and sold on the
condition and understanding that any and all such determinations shall be
binding as aforesaid.
SECTION 3. MEETINGS. At any meeting of the Trustees, a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
When a quorum is present at any meeting, a majority of the Trustees
present may take any action, except when a larger vote is required by this
Declaration of Trust, the By-Laws or the 1940 Act.
Any action required or permitted to be taken at any meeting of the
Trustees or of any committee thereof may be taken without a meeting, if a
written consent to such action is signed by a majority of the Trustees or
members of any such committee then in office, as the case may be, and such
written consent is filed with the minutes of proceedings of the Trustees or any
such committee.
The Trustees or any committee designated by the Trustees may
participate in a meeting of the Trustees or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
SECTION 4. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of each series of Shares of the Trust at all times shall be considered as
vested in the Trustees.
SECTION 5. INVESTMENT ADVICE AND MANAGEMENT Services. The Trustees
shall not in any way be bound or limited by any present or future law or custom
in regard to investments by trustees. The Trustees from time to time may enter
into a written contract or contracts with any person or persons (herein called
the "Manager"), including any firm, corporation, trust or association in which
any Trustee or Shareholder may be interested, to act as investment advisers
and/or managers of the Trust and to provide such investment advice and/or
management as the Trustees from time to time may consider necessary for the
proper management of the assets of the Trust, including, without limitation,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's investments. Any
such contract shall be subject to the requirements of the 1940 Act with respect
to its continuance in effect, its termination and the method of authorization
and approval of such contract, or any amendment thereto or renewal thereof.
Any Trustee or any organization with which any Trustee may be
associated also may act as broker for the Trust in making purchases and sales of
securities for or to the Trust for its investment portfolio, and may charge and
receive from the Trust the usual and customary commission for such service. Any
organization with which a Trustee may be associated in acting as broker for the
Trust shall be responsible only for the proper execution of transactions in
accordance with the instructions of the Trust and shall be subject to no further
liability of any sort whatever.
The Manager, or any affiliate thereof, also may be a distributor for
the sale of Shares by separate contract or may be a person controlled by or
affiliated with any Trustee or any distributor or a person in which any Trustee
or any distributor is interested financially, subject only to applicable
provisions of law. Nothing herein contained shall operate to prevent any
Manager, who also acts as such a distributor, from also receiving compensation
for services rendered as such distributor.
SECTION 6. REMOVAL AND RESIGNATION OF TRUSTEES. The Trustees or the
Shareholders (by vote of 66-2/3% of the outstanding Shares entitled to vote
thereon) may remove at any time any Trustee with or without cause, and any
Trustee may resign at any time as Trustee, without penalty by written notice to
the Trust.
ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV, Section 1, of
this Declaration of Trust; PROVIDED, HOWEVER, that no meeting of Shareholders is
required to be called for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees have been elected by the
Shareholders, (ii) for the removal of Trustees as provided in Article IV,
Section 6, (iii) with respect to any Manager as provided in Article IV, Section
5, (iv) with respect to any amendment of this Declaration of Trust as provided
in Article IX, Section 8, (v) with respect to the termination of the Trust or a
series of Shares as provided in Article IX, Section 5, and (vi) with respect to
such additional matters relating to the Trust as may be required by law, by this
Declaration of Trust, or the By-Laws of the Trust or any registration of the
Trust with the Commission or any state, or as the Trustees may consider
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote (except that in the election of Trustees said vote
may be cast for as many persons as there are Trustees to be elected), and each
fractional Share shall be entitled to a proportionate fractional vote.
Notwithstanding any other provision of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted in the aggregate as a single class without regard to series
or classes of Shares, except (i) when required by the 1940 Act or when the
Trustees shall have determined that the matter affects one or more series or
classes differently Shares shall be voted by individual series or class and (ii)
when the Trustees have determined that the matter affects only the interests of
one or more series or classes then only Shareholders of such series or classes
shall be entitled to vote thereon. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them, unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. Whenever no Shares of any series or
class are issued and outstanding, the Trustees may exercise with respect to such
series or class all rights of Shareholders and may take any action required by
law, this Declaration of Trust or any By-Laws of the Trust to be taken by
Shareholders.
SECTION 2. MEETINGS. Meetings of the Shareholders may be called by the
Trustees or such other person or persons as may be specified in the By-Laws and
shall be called by the Trustees upon the written request of Shareholders owning
at least thirty percent (30%) of the outstanding Shares entitled to vote.
Shareholders shall be entitled to at least ten days' prior notice of any
meeting.
SECTION 3. QUORUM AND REQUIRED VOTE. Thirty percent (30%) of the
outstanding Shares shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that holders of any series or class
shall vote as a series or class, then thirty percent (30%) of the aggregate
number of Shares of that series or class entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series or class. Any
lesser number, however, shall be sufficient for adjournment and any adjourned
session or sessions may be held within 90 days after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration of Trust or the By-Laws of
the Trust and subject to any applicable requirements of law, a majority of the
Shares voted shall decide any question and a plurality shall elect a Trustee,
provided that where any provision of law or of this Declaration of Trust permits
or requires that the holders of any series or class shall vote as a series or
class, then a majority of the Shares of that series or class voted on the matter
(or a plurality with respect to the election of a Trustee) shall decide that
matter insofar as that series or class is concerned.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action required or permitted
to be taken at any meeting may be taken without a meeting if a consent in
writing, setting forth such action, is signed by a majority of Shareholders
entitled to vote on the subject matter thereof (or such larger proportion
thereof as shall be required by any express provision of this Declaration of
Trust) and such consent is filed with the records of the Trust.
SECTION 5. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Distributions and Redemptions
SECTION 1. DISTRIBUTIONS. The Trustees shall distribute periodically
to the Shareholders of each series of Shares an amount approximately equal to
the net income of that series, determined by the Trustees or as they may
authorize and as herein provided. Distributions of income may be made in one or
more payments, which shall be in Shares, cash or otherwise, and on a date or
dates and as of a record date or dates determined by the Trustees. At any time
and from time to time in their discretion, the Trustees also may cause to be
distributed to the Shareholders of any one or more series as of a record date or
dates determined by the Trustees, in Shares, cash or otherwise, all or part of
any gains realized on the sale or disposition of the assets of the series or all
or part of any other principal of the Trust attributable to the series. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares of the series held by the several Shareholders on the record
date for such distribution, except to the extent otherwise required or permitted
by the preferences and special or relative rights and privileges of any classes
of Shares of that series, and any distribution to the Shareholders of a
particular class of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of them. No
distribution need be made on Shares purchased pursuant to orders received, or
for which payment is made, after such time or times as the Trustees may
determine.
SECTION 2. DETERMINATION OF NET INCOME. In determining the net income
of each series or class of Shares for any period, there shall be deducted from
income for that period (a) such portion of all charges, taxes, expenses and
liabilities due or accrued as the Trustees shall consider properly chargeable
and fairly applicable to income for that period or any earlier period and (b)
whatever reasonable reserves the Trustees shall consider advisable for possible
future charges, taxes, expenses and liabilities which the Trustees shall
consider properly chargeable and fairly applicable to income for that period or
any earlier period. The net income of each series or class for any period may be
adjusted for amounts included on account of net income in the net asset value of
Shares issued or redeemed or repurchased during that period. In determining the
net income of a series or class for a period ending on a date other than the end
of its fiscal year, income may be estimated as the Trustees shall deem fair.
Gains on the sale or disposition of assets shall not be treated as income, and
losses shall not be charged against income unless appropriate under applicable
accounting principles, except in the exercise of the discretionary powers of the
Trustees. Any amount contributed to the Trust which is received as income
pursuant to a decree of any court of competent jurisdiction shall be applied as
required by the said decree.
SECTION 3. REDEMPTIONS. Any Shareholder shall be entitled to require
the Trust to redeem and the Trust shall be obligated to redeem at the option of
such Shareholder all or any part of the Shares owned by said Shareholder, at the
redemption price, pursuant to the method, upon the terms and subject to the
conditions hereinafter set forth:
(a) Certificates for Shares, if issued, shall be presented for
redemption in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose, and these shall be presented with a written request
that the Trust redeem all or any part of the Shares represented thereby.
(b) The redemption price per Share shall be the net asset value per
Share when next determined by the Trust at such time or times as the Trustees
shall designate, following the time of presentation of certificates for Shares,
if issued, and an appropriate request for redemption, or such other time as the
Trustees may designate in accordance with any provision of the 1940 Act, or any
rule or regulation made or adopted by any securities association registered
under the Securities Exchange Act of 1934, as amended, as determined by the
Trustees, less any applicable charge or fee imposed from time to time as
determined by the Trustees.
(c) Net asset value of each series or class of Shares (for the purpose
of issuance of Shares as well as redemptions thereof) shall be determined by
dividing:
(i) the total value of the assets of such series or class
determined as provided in paragraph (d) below less, to the extent
determined by or pursuant to the direction of the Trustees in
accordance with generally accepted accounting principles, all debts,
obligations and liabilities of such series or class (which debts,
obligations and liabilities shall include, without limitation of the
generality of the foregoing, any and all debts, obligations,
liabilities, or claims, of any and every kind and nature, fixed,
accrued and otherwise, including the estimated accrued expenses of
management and supervision, administration and distribution and any
reserves or charges for any or all of the foregoing, whether for
taxes, expenses, or otherwise, and the price of Shares redeemed but
not paid for) but excluding the Trust's liability upon its Shares and
its surplus, by
(ii) the total number of Shares of such series or class
outstanding.
The Trustees are empowered, in their absolute discretion, to establish
other methods for determining such net asset value whenever such other methods
are deemed by them to be necessary to enable the Trust to comply with applicable
law, or are deemed by them to be desirable, provided they are not inconsistent
with any provision of the 1940 Act.
(d) In determining for the purposes of this Declaration of Trust the
total value of the assets of each series or class of Shares at any time,
investments and any other assets of such series or class shall be valued in such
manner as may be determined from time to time by or pursuant to the order of the
Trustees.
(e) Payment of the redemption price by the Trust may be made either in
cash or in securities or other assets at the time owned by the Trust or partly
in cash and partly in securities or other assets at the time owned by the Trust.
The value of any part of such payment to be made in securities or other assets
of the Trust shall be the value employed in determining the redemption price.
Payment of the redemption price shall be made on or before the seventh day
following the day on which the Shares are properly presented for redemption
hereunder, except that delivery of any securities included in any such payment
shall be made as promptly as any necessary transfers on the books of the issuers
whose securities are to be delivered may be made and, except as postponement of
the date of payment may be permissible under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may deduct from the
payment made for any Shares redeemed a liquidating charge not in excess of an
amount determined by the Trustees from time to time.
(f) The right of any holder of Shares redeemed by the Trust as
provided in this Article VI to receive dividends or distributions thereon and
all other rights of such Shareholder with respect to such Shares shall terminate
at the time as of which the redemption price of such Shares is determined,
except the right of such Shareholder to receive (i) the redemption price of such
Shares from the Trust in accordance with the provisions hereof, and (ii) any
dividend or distribution to which such Shareholder previously had become
entitled as the record holder of such Shares on the record date for such
dividend or distribution.
(g) Redemption of Shares by the Trust is conditional upon the Trust
having funds or other assets legally available therefor.
(h) The Trust, either directly or through an agent, may repurchase its
Shares, out of funds legally available therefor, upon such terms and conditions
and for such consideration as the Trustees shall deem advisable, by agreement
with the owner at a price not exceeding the net asset value per Share as
determined by or pursuant to the order of the Trustees at such time or times as
the Trustees shall designate, less any applicable charge, if and as fixed by the
Trustees from time to time, and to take all other steps deemed necessary or
advisable in connection therewith.
(i) Shares purchased or redeemed by the Trust shall be cancelled or
held by the Trust for reissue, as the Trustees from time to time may determine.
(j) The obligations set forth in this Article VI may be suspended or
postponed, (1) for any period (i) during which the New York Stock Exchange is
closed other than for customary weekend and holiday closings, or (ii) during
which trading on the New York Stock Exchange is restricted, (2) for any period
during which an emergency exists as a result of which (i) the disposal by the
Trust of investments owned by it is not reasonably practicable, or (ii) it is
not reasonably practicable for the Trust fairly to determine the value of its
net assets, or (3) for such other periods as the Commission or any successor
governmental authority by order may permit.
Notwithstanding any other provision of this Section 3 of Article VI,
if certificates representing such Shares have been issued, the redemption or
repurchase price need not be paid by the Trust until such certificates are
presented in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees, regardless of
whether or not such presentation has been made.
SECTION 4. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust shall
have the right at its option and at any time to redeem Shares of any Shareholder
at the net asset value thereof as determined in accordance with Section 3 of
Article VI of this Declaration of Trust: (i) if at such time such Shareholder
owns fewer Shares than, or Shares having an aggregate net asset value of less
than, an amount determined from time to time by the Trustees; or (ii) to the
extent that such Shareholder owns Shares of a particular series or class of
Shares equal to or in excess of a percentage of the outstanding Shares of that
series or class determined from time to time by the Trustees; or (iii) to the
extent that such Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number of outstanding
Shares of the Trust or the aggregate net asset value of the Trust determined
from time to time by the Trustees.
SECTION 5. DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES. No
dividend or distribution (including, without limitation, any distribution paid
upon termination of the Trust or of any series) with respect to, nor any
redemption or repurchase of, the Shares of any series shall be effected by the
Trust other than from the assets of such series.
ARTICLE VII
Compensation and Limitation of
Liability of Trustees
SECTION 1. COMPENSATION. The Trustees shall be entitled to reasonable
compensation from the Trust and may fix the amount of their compensation.
SECTION 2. LIMITATION OF LIABILITY. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee or Manager of the Trust, nor shall any Trustee be responsible
for the act or omission of any other Trustee, but nothing herein contained shall
protect any Trustee against any liability to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate, share, or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust,
shall be deemed conclusively to have been executed or done only in their or his
or her capacity as Trustees or Trustee, and such Trustees or Trustee shall not
be personally liable thereon.
ARTICLE VIII
Indemnification
SECTION 1. INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
AGENTS. Each person who is or was a Trustee, officer, employee or agent of the
Trust or who serves or has served at the Trust's request as a director, officer
or trustee of another entity in which the Trust has or had any interest as a
shareholder, creditor or otherwise shall be entitled to indemnification out of
the assets of the Trust to the extent provided in, and subject to the provisions
of, the By-Laws, provided that no indemnification shall be granted by the Trust
in contravention of the 1940 Act.
SECTION 2. MERGED CORPORATIONS. For the purposes of this Article VIII
references to "the Trust" include any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents as well as the resulting
or surviving entity; so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the
request of such a constituent corporation as a trustee, director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving entity as he or she
would have with respect to such a constituent corporation if its separate
existence had continued.
SECTION 3. SHAREHOLDERS. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or her being or
having been a Shareholder and not because of his or her acts or omissions or for
some other reason, the Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the assets of the particular series of Shares of which he or she
is or was a Shareholder to be held harmless from and indemnified against all
losses and expenses arising from such liability. Upon request, the Trust shall
cause its counsel to assume the defense of any claim which, if successful, would
result in an obligation of the Trust to indemnify the Shareholder as aforesaid.
ARTICLE IX
Status of the Trust and Other General Provisions
SECTION 1. TRUST NOT A PARTNERSHIP. It is hereby expressly declared
that a trust and not a partnership is created hereby. Neither the Trust nor the
Trustees, nor any officer, employee or agent of the Trust shall have any power
to bind personally either the Trust's Trustees or officers or any Share-
holders. All persons extending credit to, contracting with or having any claim
against the Trust or a particular series of Shares shall look only to the assets
of the Trust or the assets of that particular series for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor. Nothing in this Declaration of
Trust shall protect any Trustee against any liability to which such Trustee
otherwise would be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder
under the circumstances then prevailing, shall be binding upon everyone
interested. A Trustee shall be liable for his or her own willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall not be liable
for errors of judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and subject to the provisions of Section 1 of this Article
IX shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
SECTION 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees pursuant hereto
or to see to the application of any payments made or property transferred to the
Trust or upon its order.
SECTION 4. TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
All persons extending credit to, contracting with or having any claim against
the Trust or a particular series of Shares shall look only to the assets of the
Trust or the assets of that particular series of Shares for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.
SECTION 5. TERMINATION OF TRUST. Unless terminated as provided herein,
the Trust shall continue without limitation of time. The Trust may be terminated
at any time by vote of Shareholders holding at least a majority of the Shares of
each series entitled to vote or by the Trustees by written notice to the
Shareholders. Any series of Shares may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares of such series entitled
to vote or by the Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated as may be determined by the
Trustees, the Trust shall reduce, in accordance with such procedures as the
Trustees consider appropriate, the remaining assets to distributable form in
cash or shares or other securities, or any combination thereof, and distribute
the proceeds to the Shareholders of the series involved, ratably according to
the number of Shares of such series held by the several Shareholders of such
series on the date of termination, except to the extent otherwise required or
permitted by the preferences and special or relative rights and privileges of
any classes of Shares of that series, provided that any distribution to the
Shareholders of a particular class of Shares shall be made to such Shareholders
pro rata in proportion to the number of Shares of such class held by each of
them.
SECTION 6. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this instrument and of each amendment hereto and of each Declaration of
Trust supplemental hereto shall be kept at the office of the Trust where it may
be inspected by any Shareholder. A copy of this instrument and of each such
amendment and supplemental Declaration of Trust shall be filed by the Trust with
the Secretary of State of The Commonwealth of Massachusetts and the Boston City
Clerk, as well as any other governmental office where such filing may from time
to time be required. Anyone dealing with the Trust may rely on a certificate by
an officer of the Trust as to whether or not any such amendments or supplemental
Declarations of Trust have been made and as to matters in connection with the
Trust hereunder; and, with the same effect as if it were the original, may rely
on a copy certified by an officer of the Trust to be a copy of this instrument
or of any such amendment or supplemental Declaration of Trust. In this
instrument or in any such amendment or supplemental Declaration of Trust,
references to this instrument, and all expressions like "herein," "hereof," and
"hereunder," shall be deemed to refer to this instrument as amended or affected
by any such amendment or supplemental Declaration of Trust. Headings are placed
herein for convenience of reference only and in case of any conflict, the text
of this instrument, rather than the headings, shall control. This instrument may
be executed in any number of counterparts each of which shall be deemed an
original.
SECTION 7. APPLICABLE LAW. The Trust set forth in this instrument is
made in The Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
SECTION 8. AMENDMENTS. This Declaration of Trust may be amended at any
time by an instrument in writing signed by a majority of the then Trustees when
authorized so to do by a vote of Shareholders holding a majority of the Shares
outstanding and entitled to vote, except that an amendment which shall affect
the holders of one or more series or class of Shares but not the holders of all
outstanding series or classes of Shares shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote of the series or
classes affected and no vote of Shareholders of a series or class not affected
shall be required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision contained herein shall
not require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned Trustee has hereunto set her hand
and seal for herself and her assigns as of the day and year first above written.
Marie E. Connolly, Trustee
Address: 200 Park Avenue
New York, NY 10166
ADDRESS OF TRUST:
200 Park Avenue
New York, NY 10166
ADDRESS OF RESIDENT AGENT:
CT Corporation System
2 Oliver Street
Boston, MA 02109
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 27th day of February 1998, before me personally came the
above-named Trustee of the Fund, to me known, and known to me to be the person
described in and who executed the foregoing instrument, and who duly
acknowledged to me that she had executed the same.
Notary Public
EXHIBIT (2)
BY-LAWS
OF
DREYFUS INVESTMENT PORTFOLIOS
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1. AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time to time in
effect (the "Declaration of Trust"), of the above-captioned Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2. PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust
shall be located in New York, New York. Its resident agent in Massachusetts
shall be CT Corporation System, 2 Oliver Street, Boston, Massachusetts 02109, or
such other person as the Trustees from time to time may select.
ARTICLE 2
Meetings of Trustees
2.1. REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees from
time to time may determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2. SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3. NOTICE OF SPECIAL MEETINGS. It shall be sufficient notice to a
Trustee of a special meeting to send notice by mail at least forty-eight hours
or by telegram at least twenty-four hours before the meeting addressed to the
Trustee at his or her usual or last known business or residence address or to
give notice to him or her in person or by telephone at least twenty-four hours
before the meeting. Notice of a meeting need not be given to any Trustee if a
written waiver of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
2.4. NOTICE OF CERTAIN ACTIONS BY CONSENT. If in accordance with the
provisions of the Declaration of Trust any action is taken by the Trustees by a
written consent of less than all of the Trustees, then prompt notice of any such
action shall be furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall not be impaired by
any delay or failure to furnish such notice.
ARTICLE 3
Officers
3.1. ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and such other officers, if any, as the
Trustees from time to time may in their discretion elect. The Trust also may
have such agents as the Trustees from time to time may in their discretion
appoint. An officer may be but need not be a Trustee or shareholder. Any two or
more offices may be held by the same person.
3.2. ELECTION. The President, the Treasurer and the Secretary shall be
elected by the Trustees upon the occurrence of any vacancy in any such office.
Other officers, if any, may be elected or appointed by the Trustees at any time.
Vacancies in any such other office may be filled at any time.
3.3. TENURE. The President, Treasurer and Secretary shall hold office
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
3.4. POWERS. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as commonly are incident
to the office occupied by him or her as if the Trust were organized as a
Massachusetts business corporation or such other duties and powers as the
Trustees may from time to time designate.
3.5. PRESIDENT. Unless the Trustees otherwise provide, the President
shall preside at all meetings of the shareholders and of the Trustees. Unless
the Trustees otherwise provide, the President shall be the chief executive
officer.
3.6. TREASURER. The Treasurer shall be the chief financial and
accounting officer of the Trust, and, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, shall be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7. SECRETARY. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a temporary Secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8. RESIGNATIONS AND REMOVALS. Any Trustee or officer may resign at
any time by written instrument signed by him or her and delivered to the
President or Secretary or to a meeting of the Trustees. Such resignation shall
be effective upon receipt unless specified to be effective at some other time.
The Trustees may remove any officer elected by them with or without cause.
Except to the extent expressly provided in a written agreement with the Trust,
no Trustee or officer resigning and no officer removed shall have any right to
any compensation for any period following his or her resignation or removal, or
any right to damages on account of such removal.
ARTICLE 4
Committees
4.1. APPOINTMENT. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees otherwise may
determine, any such committee may make rules for conduct of its business.
4.2. QUORUM; VOTING. A majority of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a Committee may be taken at a meeting by a vote of a majority of
the members present (a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the time and in the
manner required by the Declaration of Trust or any applicable law. Officers and
Committees shall render such additional reports as they may deem desirable or as
may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
The fiscal year of the Trust shall be fixed, and shall be subject to
change, by the Board of Trustees.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced die with the word
"Massachusetts," together with the name of the Trust and the year of its
organization cut or engraved thereon but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and in its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases may authorize
the execution thereof in some other manner, all deeds, leases, contracts, notes
and other obligations made by the Trustees shall be signed by the President, any
Vice President, or by the Treasurer and need not bear the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1. SALE OF SHARES. Except as otherwise determined by the Trustees,
the Trust will issue and sell for cash or securities from time to time, full and
fractional shares of its shares of beneficial interest, such shares to be issued
and sold at a price of not less than net asset value per share, as from time to
time determined in accordance with the Declaration of Trust and these By-Laws
and, in the case of fractional shares, at a proportionate reduction in such
price. In the case of shares sold for securities, such securities shall be
valued in accordance with the provisions for determining value of assets of the
Trust as stated in the Declaration of Trust and these By-Laws. The officers of
the Trust are severally authorized to take all such actions as may be necessary
or desirable to carry out this Section 9.1.
9.2. SHARE CERTIFICATES. In lieu of issuing certificates for shares,
the Trustees or the transfer agent either may issue receipts therefor or may
keep accounts upon the books of the Trust for the record holders of such shares,
who shall in either case, for all purposes hereunder, be deemed to be the
holders of certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
The Trustees at any time may authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him or her, in such form as shall be
prescribed from time to time by the Trustees. Such certificate shall be signed
by the President or Vice President and by the Treasurer or Assistant Treasurer.
Such signatures may be facsimile if the certificate is signed by a transfer
agent, or by a registrar, other than a Trustee, officer or employee of the
Trust. In case any officer who has signed or whose facsimile signature has been
placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he or she were such officer at the time of its issue.
9.3. LOSS OF CERTIFICATES. The Trust, or if any transfer agent is
appointed for the Trust, the transfer agent with the approval of any two
officers of the Trust, is authorized to issue and countersign replacement
certificates for the shares of the Trust which have been lost, stolen or
destroyed subject to the deposit of a bond or other indemnity in such form and
with such security, if any, as the Trustees may require.
9.4. DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees at any
time may discontinue the issuance of share certificates and by written notice to
each shareholder, may require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Indemnification
10.1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the merits
in any such action, suit or other proceeding not to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and except that no Covered Person shall be indemnified
against any liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from time to
time by the Trust in advance of the final disposition or any such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article, PROVIDED
THAT (a) such Covered Person shall provide security for his or her undertaking,
(b) the Trust shall be insured against losses arising by reason of such Covered
Person's failure to fulfill his or her undertaking, or (c) a majority of the
Trustees who are disinterested persons and who are not Interested Persons (as
that term is defined in the Investment Company Act of 1940) (provided that a
majority of such Trustees then in office act on the matter), or independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts (but not a full trial-type inquiry), that there is
reason to believe such Covered Person ultimately will be entitled to
indemnification.
10.2. COMPROMISE PAYMENT. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication in a decision on the merits by a court, or by any other body before
which the proceeding was brought, that such Covered Person either (a) did not
act in good faith in the reasonable belief that such Covered Person's action was
in the best interests of the Trust or (b) is liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office, indemnification shall be provided if (a) approved as in the
best interest of the Trust, after notice that it involves such indemnification,
by at least a majority of the Trustees who are disinterested persons and are not
Interested Persons (provided that a majority of such Trustees then in office act
on the matter), upon a determination, based upon a review of readily available
facts (but not a full trial-type inquiry) that such Covered Person acted in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust and is not liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office, or (b)
there has been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (but not a full trial-type
inquiry) to the effect that such Covered Person appears to have acted in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust and that such indemnification would not protect such
Covered Person against any liability to the Trust to which such Covered Person
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in accordance
with this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that such Covered Person's action was in the best
interests of the Trust or to have been liable to the Trust or its shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.
10.3 INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
any such Covered Person may be entitled. As used in this Article 10, the term
"Covered Person" shall include such person's heirs, executors and
administrators, and a "disinterested person" is a person against whom none of
the actions, suits or other proceedings in question or another action, suit, or
other proceeding on the same or similar grounds is then or has been pending.
Nothing contained in this Article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of such person.
10.4. LIMITATION. Notwithstanding any provisions in the Declaration of
Trust and these By-Laws pertaining to indemnification, all such provisions are
limited by the following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
In the event that a claim for indemnification is asserted by
a Trustee, officer or controlling person of the Trust in
connection with the registered securities of the Trust, the Trust
will not make such indemnification unless (i) the Trust has
submitted, before a court or other body, the question of whether
the person to be indemnified was liable by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard
of duties, and has obtained a final decision on the merits that
such person was not liable by reason of such conduct or (ii) in
the absence of such decision, the Trust shall have obtained a
reasonable determination, based upon a review of the facts, that
such person was not liable by virtue of such conduct, by (a) the
vote of a majority of Trustees who are neither interested persons
as such term is defined in the Investment Company Act of 1940,
nor parties to the proceeding or (b) an independent legal counsel
in a written opinion.
The Trust will not advance attorneys' fees or other expenses
incurred by the person to be indemnified unless the Trust shall
have (i) received an undertaking by or on behalf of such person
to repay the advance unless it is ultimately determined that such
person is entitled to indemnification and one of the following
conditions shall have occurred: (x) such person shall provide
security for his undertaking, (y) the Trust shall be insured
against losses arising by reason of any lawful advances or (z) a
majority of the disinterested, non-party Trustees of the Trust,
or an independent legal counsel in a written opinion, shall have
determined that based on a review of readily available facts
there is reason to believe that such person ultimately will be
found entitled to indemnification.
ARTICLE 11
Shareholders
11.1. MEETINGS. A meeting of the shareholders shall be called by the
Secretary whenever ordered by the Trustees, or requested in writing by the
holder or holders of at least 10% of the outstanding shares entitled to vote at
such meeting. If the meeting is a meeting of the shareholders of one or more
series or class of shares, but not a meeting of all shareholders of the Trust,
then only the shareholders of such one or more series or classes shall be
entitled to notice of and to vote at the meeting. If the Secretary, when so
ordered or requested, refuses or neglects for more than five days to call such
meeting, the Trustees, or the shareholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
11.2. ACCESS TO SHAREHOLDER LIST. Shareholders of record may apply to
the Trustees for assistance in communicating with other shareholders for the
purpose of calling a meeting in order to vote upon the question of removal of a
Trustee. When ten or more shareholders of record who have been such for at least
six months preceding the date of application and who hold in the aggregate
shares having a net asset value of at least $25,000 or at least 1% of the
outstanding shares, whichever is less, so apply, the Trustees shall within five
business days either:
(i) afford to such applicants access to a list of names and addresses
of all shareholders as recorded on the books of the Trust; or
(ii) inform such applicants of the approximate number of shareholders
of record and the approximate cost of mailing material to them and, within a
reasonable time thereafter, mail materials submitted by the applicants to all
such shareholders of record. The Trustees shall not be obligated to mail
materials which they believe to be misleading or in violation of applicable law.
11.3. RECORD DATES. For the purpose of determining the shareholders of
any series or class who are entitled to vote or act at any meeting or any
adjournment thereof, or who are entitled to receive payment of any dividend or
of any other distribution, the Trustees from time to time may fix a time, which
shall be not more than 90 days before the date of any meeting of shareholders or
the date of payment of any dividend or of any other distribution, as the record
date for determining the shareholders of such series or class having the right
to notice of and to vote at such meeting and any adjournment thereof or the
right to receive such dividend or distribution, and in such case only
shareholders of record on such record date shall have such right notwithstanding
any transfer of shares on the books of the Trust after the record date; or
without fixing such record date the Trustees may for any such purposes close the
register or transfer books for all or part of such period.
11.4. PLACE OF MEETINGS. All meetings of the shareholders shall be
held at the principal office of the Trust or at such other place within the
United States as shall be designated by the Trustees or the President of the
Trust.
11.5. NOTICE OF MEETINGS. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes of the meeting,
shall be given at least ten days before the meeting to each shareholder entitled
to vote thereat by leaving such notice with him or at his residence or usual
place of business or by mailing it, postage prepaid, and addressed to such
shareholder at his address as it appears in the records of the Trust. Such
notice shall be given by the Secretary or an Assistant Secretary or by an
officer designated by the Trustees. No notice of any meeting of shareholders
need be given to a shareholder if a written waiver of notice, executed before or
after the meeting by such shareholder or his attorney thereunto duly authorized,
is filed with the records of the meeting.
11.6. BALLOTS. No ballot shall be required for any election unless
requested by a shareholder present or represented at the meeting and entitled to
vote in the election.
11.7. PROXIES. Shareholders entitled to vote may vote either in person
or by proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the Secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting. The placing of a
shareholder's name on a proxy pursuant to telephonic or electronically
transmitted instructions obtained pursuant to procedures reasonably designed to
verify that such instructions have been authorized by such shareholder shall
constitute execution of such proxy by or on behalf of such shareholder.
ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in part, by a
majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such a majority.
Dated: February 27, 1998
EXHIBIT (5)
FORM OF
MANAGEMENT AGREEMENT
DREYFUS INVESTMENT PORTFOLIOS
200 Park Avenue
New York, New York 10166
______________, 1998
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Ladies and Gentlemen:
The above-named investment company (the "Fund") consisting of the
series named on Schedule 1 hereto, as such Schedule may be revised from time to
time (each, a "Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting
the same in investments of the type and in accordance with the limitations
specified in its charter documents and in its Prospectus and Statement of
Additional Information as from time to time in effect, copies of which have been
or will be submitted to you, and in such manner and to such extent as from time
to time may be approved by the Fund's Board. The Fund desires to employ you to
act as the Fund's investment adviser.
In this connection it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe to
be particularly fitted to assist you in the performance of this Agreement. Such
person or persons may be officers or employees who are employed by both you and
the Fund. The compensation of such person or persons shall be paid by you and no
obligation may be incurred on the Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's Board, you will
provide investment management of each Series' portfolio in accordance with such
Series' investment objectives and policies as stated in the Fund's Prospectus
and Statement of Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment research and will
supervise each Series' investments and conduct a continuous program of
investment, evaluation and, if appropriate, sale and reinvestment of such
Series' assets. You will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or contemplate purchasing, as
the Fund may reasonably request. The Fund wishes to be informed of important
developments materially affecting any Series' portfolio and shall expect you, on
your own initiative, to furnish to the Fund from time to time such information
as you may believe appropriate for this purpose.
In addition, you will supply office facilities (which may be in your
own offices), data processing services, clerical, accounting and bookkeeping
services, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; prepare reports to
each Series' stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities; calculate the
net asset value of each Series' shares; and generally assist in all aspects of
the Fund's operations. You shall have the right, at your expense, to engage
other entities to assist you in performing some or all of the obligations set
forth in this paragraph, provided each such entity enters into an agreement with
you in form and substance reasonably satisfactory to the Fund. You agree to be
liable for the acts or omissions of each such entity to the same extent as if
you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the services to be
provided to the Fund hereunder and the Fund agrees as an inducement to your
undertaking the same that you shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by one or more Series,
provided that nothing herein shall be deemed to protect or purport to protect
you against any liability to the Fund or a Series or to its security holders to
which you would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to this Agreement, the
Fund will pay you on the first business day of each month a fee at the rate set
forth opposite each Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described in the Fund's
then-current Prospectus and Statement of Additional Information. The fee for the
period from the date of the commencement of the public sale of a Series' shares
to the end of the month during which such sale shall have been commenced shall
be pro-rated according to the proportion which such period bears to the full
monthly period, and upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of each
Series' net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of each Series' net assets.
You will bear all expenses in connection with the performance of your
services under this Agreement. All other expenses to be incurred in the
operation of the Fund will be borne by the Fund, except to the extent
specifically assumed by you. The expenses to be borne by the Fund include,
without limitation, the following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not your
officers, directors or employees or holders of 5% or more of your outstanding
voting securities, Securities and Exchange Commission fees and state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing services,
costs of maintaining the Fund's existence, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and any extraordinary
expenses.
The Fund understands that you now act, and that from time to time
hereafter you may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and the Fund has no objection
to your so acting, provided that when the purchase or sale of securities of the
same issuer is suitable for the investment objectives of two or more companies
or accounts managed by you which have available funds for investment, the
available securities will be allocated in a manner believed by you to be
equitable to each company or account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by one or more Series
or the size of the position obtainable for or disposed of by one or more Series.
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict your right or the right of any of your affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, except for a loss resulting from willful misfeasance, bad
faith or gross negligence on your part in the performance of your duties or from
reckless disregard by you of your obligations and duties under this Agreement.
Any person, even though also your officer, director, partner, employee or agent,
who may be or become an officer, Board member, employee or agent of the Fund,
shall be deemed, when rendering services to the Fund or acting on any business
of the Fund, to be rendering such services to or acting solely for the Fund and
not as your officer, director, partner, employee or agent or one under your
control or direction even though paid by you.
As to each Series, this Agreement shall continue until the date set
forth opposite such Series' name on Schedule 1 hereto (the "Reapproval Date")
and thereafter shall continue automatically for successive annual periods ending
on the day of each year set forth opposite the Series' name on Schedule 1 hereto
(the "Reapproval Day"), provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940) of such Series' outstanding voting
securities, provided that in either event its continuance also is approved by a
majority of the Fund's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. As to each Series,
this Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series' shares or, upon not
less than 90 days' notice, by you. This Agreement also will terminate
automatically, as to the relevant Series, in the event of its assignment (as
defined in said Act).
The Fund recognizes that from time to time your directors, officers
and employees may serve as directors, trustees, partners, officers and employees
of other corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other entities may include
the name "Dreyfus" as part of their name, and that your corporation or its
affiliates may enter into investment advisory or other agreements with such
other entities. If you cease to act as the Fund's investment adviser, the Fund
agrees that, at your request, the Fund will take all necessary action to change
the name of the Fund to a name not including "Dreyfus" in any form or
combination of words.
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall only be binding upon the assets and property
of the Fund or the affected Series, as the case may be, and shall not be binding
upon any Board member, officer or shareholder of the Fund individually.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS INVESTMENT
PORTFOLIOS
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
<PAGE>
SCHEDULE 1
Annual Fee as
a Percentage
of Average
Daily Net
NAME OF SERIES ASSETS REAPPROVAL DATE REAPPROVAL DAY
Dreyfus Core Value
Portfolio
Dreyfus MidCap Stock
Portfolio
EXHIBIT (6)
FORM OF
DISTRIBUTION AGREEMENT
DREYFUS INVESTMENT PORTFOLIOS
200 Park Avenue
New York, New York 10166
___________, 1998
Premier Mutual Fund Services, Inc.
60 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements
hereinafter contained, the above-named investment company (the "Fund") has
agreed that you shall be, for the period of this agreement, the distributor of
(a) shares of each Series of the Fund set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes of this
agreement the term "Shares" shall mean the authorized shares of the relevant
Series, if any, and otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares covered by,
and in accordance with, the registration statement and prospectus then in effect
under the Securities Act of 1933, as amended, and will transmit promptly any
orders received by you for purchase or redemption of Shares to the Transfer and
Dividend Disbursing Agent for the Fund of which the Fund has notified you in
writing.
1.2 You agree to use your best efforts to solicit orders for the sale
of Shares. It is contemplated that you will enter into sales or servicing
agreements with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended, by the Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by abnormal circumstances of any kind, the
Fund's officers may decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such orders and to
make such sales and the Fund shall advise you promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Fund hereunder, and all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders; provided, however,
that nothing contained herein shall be deemed to require the Fund to pay any of
the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which may be
reasonably necessary in the discretion of the Fund's officers in connection with
the qualification of Shares for sale in such states as you may designate to the
Fund and the Fund may approve, and the Fund agrees to pay all expenses which may
be incurred in connection with such qualification. You shall pay all expenses
connected with your own qualification as a dealer under state or Federal laws
and, except as otherwise specifically provided in this agreement, all other
expenses incurred by you in connection with the sale of Shares as contemplated
in this agreement.
1.7 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect to the Fund or
any relevant Series and the Shares as you may reasonably request, all of which
shall be signed by one or more of the Fund's duly authorized officers; and the
Fund warrants that the statements contained in any such information, when so
signed by the Fund's officers, shall be true and correct. The Fund also shall
furnish you upon request with: (a) semi-annual reports and annual audited
reports of the Fund's books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings statements prepared by
the Fund, (c) a monthly itemized list of the securities in the Fund's or, if
applicable, each Series' portfolio, (d) monthly balance sheets as soon as
practicable after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition as you may
reasonably request.
1.8 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares have been carefully prepared in
conformity with the requirements of said Acts and rules and regulations of the
Securities and Exchange Commission thereunder. As used in this agreement the
terms "registration statement" and "prospectus" shall mean any registration
statement and prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and Exchange
Commission and any amendments and supplements thereto which at any time shall
have been filed with said Commission. The Fund represents and warrants to you
that any registration statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of said Commission; that
all statements of fact contained in any such registration statement and
prospectus will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus when
such registration statement becomes effective will include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The Fund may
but shall not be obligated to propose from time to time such amendment or
amendments to any registration statement and such supplement or supplements to
any prospectus as, in the light of future developments, may, in the opinion of
the Fund's counsel, be necessary or advisable. If the Fund shall not propose
such amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from you to do so, you may,
at your option, terminate this agreement or decline to make offers of the Fund's
securities until such amendments are made. The Fund shall not file any amendment
to any registration statement or supplement to any prospectus without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Fund may deem advisable, such right
being in all respects absolute and unconditional.
1.9 The Fund authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale of Shares. The
Fund agrees to indemnify, defend and hold you, your several officers and
directors, and any person who controls you within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which you, your officers and directors,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based upon any
untrue statement, or alleged untrue statement, of a material fact contained in
any registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Fund's
agreement to indemnify you, your officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of any untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement or prospectus in reliance
upon and in conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's agreement to
indemnify you, your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being notified of any action
brought against you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed to the Fund at
its address set forth above within ten days after the summons or other first
legal process shall have been served. The failure so to notify the Fund of any
such action shall not relieve the Fund from any liability which the Fund may
have to the person against whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, or alleged omission, otherwise
than on account of the Fund's indemnity agreement contained in this paragraph
1.9. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Fund and approved
by you. In the event the Fund elects to assume the defense of any such suit and
retain counsel of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
any of them; but in case the Fund does not elect to assume the defense of any
such suit, or in case you do not approve of counsel chosen by the Fund, the Fund
will reimburse you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by you or them. The Fund's indemnification agreement
contained in this paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of you, your officers and directors, or
any controlling person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to your benefit, to the benefit of
your several officers and directors, and their respective estates, and to the
benefit of any controlling persons and their successors. The Fund agrees
promptly to notify you of the commencement of any litigation or proceedings
against the Fund or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Fund, its officers or Board members, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or otherwise,
but only to the extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting from such claims
or demands, shall arise out of or be based upon any untrue, or alleged untrue,
statement of a material fact contained in information furnished in writing by
you to the Fund specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such information not
misleading. Your agreement to indemnify the Fund, its officers and Board
members, and any such controlling person, as aforesaid, is expressly conditioned
upon your being notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification to be given by
letter or telegram addressed to you at your address set forth above within ten
days after the summons or other first legal process shall have been served. You
shall have the right to control the defense of such action, with counsel of your
own choosing, satisfactory to the Fund, if such action is based solely upon such
alleged misstatement or omission on your part, and in any other event the Fund,
its officers or Board members, or such controlling person shall each have the
right to participate in the defense or preparation of the defense of any such
action. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to the Fund, its officers or Board
members, or to such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph 1.10. This agreement of
indemnity will inure exclusively to the Fund's benefit, to the benefit of the
Fund's officers and Board members, and their respective estates, and to the
benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any litigation or
proceedings against you or any of your officers or directors in connection with
the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the Fund under any of
the provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as a current prospectus as
required by Section 10 of said Act, as amended, is not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Fund's obligation to repurchase any Shares from any shareholder
in accordance with the provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in writing:
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectus then in effect
or for additional information;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the
registration statement or prospectus then in effect or the initiation
of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any
statement of a material fact made in the registration statement or
prospectus then in effect or which requires the making of a change in
such registration statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus
which may from time to time be filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you shall be
offered for sale at a price per share (the "offering price") approximately equal
to (a) their net asset value (determined in the manner set forth in the Fund's
charter documents) plus (b) a sales charge, if any and except to those persons
set forth in the then-current prospectus, which shall be the percentage of the
offering price of such Shares as set forth in the Fund's then-current
prospectus. The offering price, if not an exact multiple of one cent, shall be
adjusted to the nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred sales charge as
set forth in the Fund's then-current prospectus. You shall be entitled to
receive any sales charge or contingent deferred sales charge in respect of the
Shares. Any payments to dealers shall be governed by a separate agreement
between you and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the "Reapproval Date")
set forth on Exhibit A hereto (and, if the Fund has Series, a separate
Reapproval Date shall be specified on Exhibit A for each Series), and thereafter
shall continue automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A hereto, provided such
continuance is specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may be, provided that
in either event its continuance also is approved by a majority of the Board
members who are not "interested persons" (as defined in said Act) of any party
to this agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This agreement is terminable without penalty, on 60
days' notice, by vote of holders of a majority of the Fund's or, as to any
relevant Series, such Series' outstanding voting securities or by the Fund's
Board as to the Fund or the relevant Series, as the case may be. This agreement
is terminable by you, upon 270 days' notice, effective on or after the fifth
anniversary of the date hereof. This agreement also will terminate
automatically, as to the Fund or relevant Series, as the case may be, in the
event of its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares, you shall not perform
any services for any entity other than investment companies advised or
administered by The Dreyfus Corporation. The Fund acknowledges that the persons
employed by you to assist in the performance of your duties under this agreement
may not devote their full time to such service and nothing contained in this
agreement shall be deemed to limit or restrict your or any of your affiliates
right to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this agreement shall only be binding upon the assets and property
of the Fund and shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding agreement between us.
Very truly yours,
DREYFUS INVESTMENT
PORTFOLIOS
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:_______________________________
<PAGE>
EXHIBIT A
NAME OF SERIES REAPPROVAL DATE REAPPROVAL DAY
Dreyfus Core Value Portfolio
Dreyfus MidCap
Stock Portfolio
EXHIBIT (8)
FORM OF
CUSTODY AGREEMENT
AGREEMENT dated as of _________________, 1998 between DREYFUS INVESTMENT
PORTFOLIOS (the "Fund"), an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts, having its principal office and place
of business at 200 Park Avenue, New York, New York 10166, and MELLON BANK, N.A.
(the "Custodian"), a national banking association, having its principal place of
business at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, with respect
to the Fund's series named on Schedule 1 hereto, as such Schedule may be revised
from time to time (each, a "Series").
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set forth,
the Fund and the Custodian agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement or in any Schedules to this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
(a) "Affiliated Person" shall have the meaning of the term within Section
2(a)(3) of the 1940 Act.
(b) "Authorized Person" shall mean those persons duly authorized by the
Fund's Board to give Oral Instructions and Written Instructions on behalf
of the Fund and listed in the certification annexed hereto as Appendix A or
such other certification as may be received by the Custodian from time to
time.
(c) "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency Securities, its successor or
successors and its nominee or nominees, in which the Custodian is hereby
specifically authorized and instructed on a continuous and on-going basis
to deposit all Securities eligible for deposit therein, and to utilize the
Book-Entry System to the extent possible in connection with its performance
hereunder.
(d) "Business Day" shall mean each day on which the Fund is required to
determine its net asset value, and any other day on which the Securities
and Exchange Commission may require the Fund to be open for business.
(e) "Certificate" shall mean any notice, instruction or other instrument in
writing, authorized or required by this Agreement to be given to the
Custodian, which is actually received by the Custodian and signed on behalf
of the Fund by any two Authorized Persons or any two officers of the Fund.
(f) "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in which the Custodian
is hereby specifically authorized and instructed on a continuous and
on-going basis to deposit all Securities eligible for deposit therein, and
to utilize the Depository to the extent possible in connection with its
performance hereunder. The term "Depository" shall further mean and include
any other person to be named in a Certificate authorized to act as a
depository under the 1940 Act, its successor or successors and its nominee
or nominees.
(g) "Money Market Security" shall be deemed to include, without limitation,
debt obligations issued or guaranteed as to interest and principal by the
government of the United States or agencies or instrumentalities thereof
("U.S. government securities"), commercial paper, bank certificates of
deposit, bankers' acceptances and short-term corporate obligations, where
the purchase or sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale, and repurchase and
reverse repurchase agreements with respect to any of the foregoing types of
securities and bank time deposits.
(h) "Oral Instructions" shall mean verbal instructions actually received by
the Custodian from a person reasonably believed by the Custodian to be an
Authorized Person.
(i) "Prospectus" shall mean the Fund's current prospectus and statement of
additional information relating to the registration of the Fund's Shares
under the Securities Act of 1933, as amended.
(j) "Shares" shall mean all or any part of each class of shares of
beneficial interest of the Fund, allocated to a particular Series, listed
in the Certificate annexed hereto as Appendix B, as it may be amended from
time to time, which from time to time are authorized and/or issued by the
Fund.
(k) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities, commodities interests and investments from time to time owned
by the Fund.
(l) "Transfer Agent" shall mean the person which performs the transfer
agent, dividend disbursing agent and shareholder servicing agent functions
for the Fund.
(m) "Written Instructions" shall mean a written communication actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person by any system, including, without
limitation, electronic transmissions, facsimile and telex, whereby the
receiver of such communication is able to verify by codes or otherwise with
a reasonable degree of certainty the authenticity of the sender of such
communication.
(n) The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
2. APPOINTMENT OF CUSTODIAN.
(a) The Fund hereby constitutes and appoints the Custodian as custodian of
all the Securities and monies at the time owned by or in the possession of
the Fund during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.
3. COMPENSATION.
(a) The Fund will compensate the Custodian for its services rendered under
this Agreement in accordance with the fees set forth in the Fee Schedule
annexed hereto as Schedule A and incorporated herein. Such Fee Schedule
does not include out-of-pocket disbursements of the Custodian for which the
Custodian shall be entitled to bill separately. Out-of-pocket disbursements
shall consist of the items specified in the Schedule of Out-of-pocket
charges annexed hereto as Schedule B and incorporated herein, which
schedule may be modified by the Custodian upon not less than thirty days
prior written notice to the Fund.
(b) Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Schedule A of this Agreement a revised Fee Schedule, dated
and signed by an Authorized Officer or authorized representative of each
party hereto.
(c) The Custodian will bill the Fund as soon as practicable after the end
of each calendar month, and said billings will be detailed in accordance
with Schedule A, as amended from time to time. The Fund will promptly pay
to the Custodian the amount of such billing. The Custodian may charge
against any monies held on behalf of the Fund pursuant to this Agreement
such compensation and disbursements incurred by the Custodian in the
performance of its duties pursuant to this Agreement. The Custodian shall
also be entitled to charge against any money held on behalf of the Fund
pursuant to this Agreement the amount of any loss, damage, liability or
expense incurred with respect to the Fund, including counsel fees, for
which it shall be entitled to reimbursement under the provisions of this
Agreement.
4. CUSTODY OF CASH AND SECURITIES.
(a) RECEIPT AND HOLDING OF ASSETS. The Fund will deliver or cause to be
delivered to the Custodian or its permitted Sub-Custodians all Securities
and monies owned by the Series at any time during the period of this
Agreement and shall specify the Series to which the same are to be
specifically allocated. The Custodian will not be responsible for such
Securities and monies until actually received by it. The Fund shall
instruct the Custodian from time to time in its sole discretion, by means
of Written Instructions, or, in connection with the purchase or sale of
Money Market Securities, by means of Oral Instructions confirmed in writing
in accordance with Section 11(h) hereof or Written Instructions, as to the
manner in which and in what amounts Securities and monies are to be
deposited on behalf of the Series in the Book-Entry System or the
Depository. Securities and monies of such Series deposited in the
Book-Entry System or the Depository will be represented in accounts which
include only assets held by the Custodian for customers, including but not
limited to accounts for which the Custodian acts in a fiduciary or
representative capacity.
(b) ACCOUNTS AND DISBURSEMENTS. The Custodian shall establish and maintain
a separate account for the Fund with respect to each Series and shall
credit to the separate account all monies received by it for the account of
the Fund with respect to such Series and shall disburse the same only:
1. In payment for Securities purchased for the Series, as provided in
Section 5 hereof;
2. In payment of dividends or distributions with respect to the
Shares, as provided in Section 7 hereof;
3. In payment of original issue or other taxes with respect to the
Shares, as provided in Section 8 hereof;
4. In payment for Shares which have been redeemed by the Fund, as
provided in Section 8 hereof;
5. Pursuant to a Certificate setting forth the name and address of the
person to whom the payment is to be made, the Series account from
which payment is to be made, the amount to be paid and the purpose for
which payment is to be made, provided that in the event of
disbursements pursuant to this paragraph 5 of Section 4(b), the Fund
shall indemnify and hold the Custodian harmless from any claims or
losses arising out of such disbursements in reliance on such
Certificate; or
6. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as provided in
Sections 3 and 11(i).
(c) CONFIRMATION AND STATEMENTS. Promptly after the close of business on
each day, the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of each Series during said
day. Where securities purchased by a Series are in a fungible bulk of
securities registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of the Depository or the
Book-Entry System, the Custodian shall by book-entry or otherwise identify
the quantity of those securities belonging to such Series. At least
monthly, the Custodian shall furnish the Fund with a detailed statement of
the Securities and monies held for each Series under this Agreement.
(d) REGISTRATION OF SECURITIES AND PHYSICAL SEPARATION. All Securities held
for a Series which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by the
Custodian in that form; all other Securities held for a Series may be
registered in the name of such Series, in the name of the Custodian, in the
name of any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or their nominee
or nominees. The Fund reserves the right to instruct the Custodian as to
the method of registration and safekeeping of the Securities. The Fund
agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the Book-Entry System
or the Depository, any Securities which it may hold for the account of a
Series and which may from time to time be registered in the name of such
Series. The Custodian shall hold all such Securities specifically allocated
to a Series which are not held in the Book-Entry System or the Depository
in a separate account for the Fund in the name of such Series physically
segregated at all times from those of any other person or persons.
(e) SEGREGATED ACCOUNTS. Upon receipt of a Certificate, the Custodian will
establish segregated accounts on behalf of each Series to hold liquid or
other assets as it shall be directed by a Certificate and shall increase or
decrease the assets in such segregated accounts only as it shall be
directed by subsequent Certificate.
(f) COLLECTION OF INCOME AND OTHER MATTERS AFFECTING SECURITIES. Unless
otherwise instructed to the contrary by a Certificate, the Custodian by
itself, or through the use of the Book-Entry System or the Depository with
respect to Securities therein deposited, shall with respect to all
Securities held for each Series in accordance with this Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, retired or
otherwise become payable. Notwithstanding the foregoing, the Custodian
only shall have such responsibility to the Fund for Securities which
are called if either (i) the Custodian received a written notice of
such call; or (ii) notice of such call appears in one or more of the
publications listed in Appendix C annexed hereto, which may be amended
at any time by the Custodian upon five (5) Business Days prior
notification to the Fund;
3. Surrender Securities in temporary form for definitive Securities;
4. Execute any necessary declarations or certificates of ownership
under the Federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect; and
5. Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of each
Series all rights and similar Securities issued with respect to any
Securities held by the Custodian hereunder for the Series.
(g) DELIVERY OF SECURITIES AND EVIDENCE OF AUTHORITY. Upon receipt of a
Certificate, the Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
1. Execute and deliver or cause to be executed and delivered to such
persons as may be designated in such Certificate, proxies, consents,
authorizations, and any other instruments whereby the authority of the
Fund as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for the Series
in exchange for other Securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the exercise
of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for the Series
to any protective committee, reorganization committee or other person
in connection with the reorganization, refinancing, merger,
consolidation or recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this Agreement in
the separate account for the Series such certificates of deposit,
interim receipts or other instruments or documents as may be issued to
it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the assets
specifically allocated to the separate account of the Series and take
such other steps as shall be stated in a Certificate to be for the
purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund;
5. Deliver Securities upon the receipt of payment in connection with
any repurchase agreement related to such Securities entered into by
the Fund;
6. Deliver Securities owned by the Series to the issuer thereof or its
agent when such Securities are called or otherwise become payable.
Notwithstanding the foregoing, the Custodian shall have no
responsibility for monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds which are owned by the
Series and held by the Custodian or its nominees. Nor shall the
Custodian have any responsibility or liability to the Fund for any
loss by the Series for any missed payments or other defaults resulting
therefrom; unless the Custodian received timely notification from the
Fund specifying the time, place and manner for the presentment of any
such put bond owned by the Series and held by the Custodian or its
nominee. The Custodian shall not be responsible and assumes no
liability to the Fund for the accuracy or completeness of any
notification the Custodian may furnish to the Fund with respect to put
bonds;
7. Deliver Securities for delivery in connection with any loans of
Securities made by the Series but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the
Fund which may be in the form of cash or U.S. government securities or
a letter of credit;
8. Deliver Securities for delivery as security in connection with any
borrowings by the Series requiring a pledge of Fund assets, but only
against receipt of amounts borrowed;
9. Deliver Securities upon receipt of a Certificate from the Fund for
delivery to the Transfer Agent or to the holders of Shares in
connection with distributions in kind, as may be described from time
to time in the Fund's Prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption;
10. Deliver Securities as collateral in connection with short sales by
the Series of common stock for which the Series owns the stock or owns
preferred stocks or debt securities convertible or exchangeable,
without payment or further consideration, into shares of the common
stock sold short;
11. Deliver Securities for any purpose expressly permitted by and in
accordance with procedures described in the Fund's Prospectus; and
12. Deliver Securities for any other proper business purpose, but only
upon receipt of, in addition to Written Instructions, a certified copy
of a resolution of the Fund's Board signed by an Authorized Person and
certified by the Secretary of the Fund, specifying the Securities to
be delivered, setting forth the purpose for which such delivery is to
be made, declaring such purpose to be a proper business purpose, and
naming the person or persons to whom delivery of such Securities shall
be made.
(h) ENDORSEMENT AND COLLECTION OF CHECKS, ETC. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders for
the payment of money received by the Custodian for the account of the
Series.
5. PURCHASE AND SALE OF INVESTMENTS.
(a) Promptly after each purchase of Securities by the Fund, the Fund shall
deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Certificate; and (ii) with respect
to each purchase of Money Market Securities, either a Written Instruction
or Oral Instruction, in either case specifying with respect to each
purchase: (1) the Series to which the Securities purchased are to be
specifically allocated; (2) the name of the issuer and the title of the
Securities; (3) the number of shares or the principal amount purchased and
accrued interest, if any; (4) the date of purchase and settlement; (5) the
purchase price per unit; (6) the total amount payable upon such purchase;
(7) the name of the person from whom or the broker through whom the
purchase was made, if any; and (8) whether or not such purchase is to be
settled through the Book-Entry System or the Depository. The Custodian
shall receive the Securities purchased by or for such Series and upon
receipt of Securities shall pay out of the monies held for the account of
such Series the total amount payable upon such purchase, provided that the
same conforms to the total amount payable as set forth in such Certificate,
Written or Oral Instruction.
(b) Promptly after each sale of Securities by the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities which
are not Money Market Securities, a Certificate, and (ii) with respect to
each sale of Money Market Securities, either Written Instruction or Oral
Instructions, in either case specifying with respect to such sale: (1) the
Series to which such Securities sold were specifically allocated; (2) the
name of the issuer and the title of the Securities; (3) the number of
shares or principal amount sold, and accrued interest, if any; (4) the date
of sale; (5) the sale price per unit; (6) the total amount payable to such
Series upon such sale; (7) the name of the broker through whom or the
person to whom the sale was made; and (8) whether or not such sale is to be
settled through the Book-Entry System or the Depository. The Custodian
shall deliver or cause to be delivered the Securities to the broker or
other person designated by the Fund upon receipt of the total amount
payable to such Series upon such sale, provided that the same conforms to
the total amount payable to the Series as set forth in such Certificate,
Written or Oral Instruction. Subject to the foregoing, the Custodian may
accept payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
6. LENDING OF SECURITIES.
If the Fund is permitted by the terms of its organization documents
and as disclosed in its Prospectus to lend securities, within 24 hours
after each loan of Securities, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each such loan: (a) the Series to
which the Securities to be loaned are specifically allocated; (b) the name
of the issuer and the title of the Securities; (c) the number of shares or
the principal amount loaned; (d) the date of loan and delivery; (e) the
total amount to be delivered to the Custodian, and specifically allocated
against the loan of the Securities, including the amount of cash collateral
and the premium, if any, separately identified; and (f) the name of the
broker, dealer or financial institution to which the loan was made.
Promptly after each termination of a loan of Securities, the Fund
shall deliver to the Custodian a Certificate specifying with respect to
each such loan termination and return of Securities: (a) the Series to
which the Securities to be returned are specifically allocated; (b) the
name of the issuer and the title of the Securities to be returned; (c) the
number of shares or the principal amount to be returned; (d) the date of
termination; (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting
credits as described in said Certificate); and (f) the name of the broker,
dealer or financial institution from which the Securities will be returned.
The Custodian shall receive all Securities returned from the broker, dealer
or financial institution to which such Securities were loaned and upon
receipt thereof shall pay the total amount payable upon such return of
Securities as set forth in the Certificate. Securities returned to the
Custodian shall be held as they were prior to such loan.
7. PAYMENT OF DIVIDENDS OR DISTRIBUTIONS.
(a) For each Series, the Fund shall furnish to the Custodian a Certificate
specifying the date of payment of any dividend or distribution, and the
total amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such Certificate, the Custodian
shall pay out of the monies held for the account of the Series the total
amount payable to the Transfer Agent of the Fund.
8. SALE AND REDEMPTION OF SHARES.
(a) Whenever the Fund shall sell any Shares, or whenever any Shares are
redeemed, the Fund shall deliver or cause to be delivered to the Custodian
a Written Instruction from the Transfer Agent duly specifying:
1. The net amount of money to be received by the Custodian, where the
sale of such Shares exceeds redemption; and
2. The net amount of money to be paid for such Shares, where
redemptions exceed purchases.
The Custodian understands and agrees that Written Instructions may be
furnished subsequent to the purchase of Shares and that the information
contained therein will be derived from the sales of Shares as reported to
the Fund by the Transfer Agent.
(b) Upon receipt of money from the Transfer Agent, the Custodian shall
credit such money to the separate account of the Series.
(c) Upon issuance of any Shares in accordance with the foregoing provisions
of this Section 8, the Custodian shall pay all original issue or other
taxes required to be paid for the account of the Series in connection with
such issuance upon the receipt of a Written Instruction specifying the
amount to be paid.
(d) Upon receipt from the Transfer Agent of Written Instructions setting
forth the net amount of money to be paid for Shares received by the
Transfer Agent for redemption, the Custodian shall make payment to the
Transfer Agent of such net amount out of the monies held for the account of
the Series.
9. INDEBTEDNESS.
(a) The Fund will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Fund borrows money for investment
or for temporary administrative or emergency purposes using Securities as
collateral for such borrowings, a notice or undertaking in the form
currently employed by any such bank setting forth the amount which such
bank will loan to the Fund against delivery of a stated amount of
collateral. The Fund shall promptly deliver to the Custodian a Certificate
stating with respect to each such borrowing: (1) the Series to which the
borrowing relates; (2) the name of the bank; (3) the amount and terms of
the borrowing, which may be set forth by incorporating by reference an
attached promissory note, duly endorsed by the Fund, or other loan
agreement; (4) the time and date, if known, on which the loan is to be
entered into (the "borrowing date"); (5) the date on which the loan becomes
due and payable; (6) the total amount payable to the Fund for the account
of such Series on the borrowing date; (7) the market value of Securities to
be delivered as collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal amount of any
particular Securities; and (8) a statement that such loan is in conformance
with the 1940 Act and the Fund's Prospectus.
(b) Upon receipt of the Certificate referred to in subparagraph (a) above,
the Custodian shall deliver on the borrowing date the specified collateral
and the executed promissory note, if any, against delivery by the lending
bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such collateral in
its possession, but such collateral shall be subject to all rights therein
given the lending bank by virtue of any promissory note or loan agreement.
The Custodian shall deliver as additional collateral in the manner directed
by the Fund from time to time such Securities as may be specified in the
Certificate to collateralize further any transaction described in this
Section 9. The Fund shall cause all Securities released from collateral
status to be returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may be tendered to
it. In the event that the Fund fails to specify in the Certificate all of
the information required by this Section 9, the Custodian shall not be
under any obligation to deliver any Securities. Collateral returned to the
Custodian shall be held hereunder as it was prior to being used as
collateral.
10. PERSONS HAVING ACCESS TO ASSETS OF THE FUND.
(a) No Board member or agent of the Fund, and no officer, director,
employee or agent of the Fund's investment adviser, of any sub-investment
adviser of the Fund, or of the Fund's administrator, shall have physical
access to the assets of the Fund held by the Custodian or be authorized or
permitted to withdraw any investments of the Fund, nor shall the Custodian
deliver any assets of the Fund to any such person. No officer, director,
employee or agent of the Custodian who holds any similar position with the
Fund's investment adviser, with any sub-investment adviser of the Fund or
with the Fund's administrator shall have access to the assets of the Fund.
(b) Nothing in this Section 10 shall prohibit any duly authorized officer,
employee or agent of the Fund, or any duly authorized officer, director,
employee or agent of the investment adviser, of any sub-investment adviser
of the Fund or of the Fund's administrator, from giving Oral Instructions
or Written Instructions to the Custodian or executing a Certificate so long
as it does not result in delivery of or access to assets of the Fund
prohibited by Section 10(a).
11. CONCERNING THE CUSTODIAN.
(a) STANDARD OF CONDUCT. Notwithstanding any other provision of this
Agreement, neither the Custodian nor its nominee shall be liable for any
loss or damage, including counsel fees, resulting from its action or
omission to act or otherwise, except for any such loss or damage arising
out of the negligence, misfeasance or willful misconduct of the Custodian
or any of its employees, Sub-Custodians or agents. The Custodian may, with
respect to questions of law, apply for and obtain the advice and opinion of
counsel to the Fund or of its own counsel, at the expense of the Fund, and
shall be fully protected with respect to anything done or omitted by it in
good faith in conformity with such advice or opinion. The Custodian shall
not be liable to the Fund for any loss or damage resulting from the use of
the Book-Entry System or the Depository, except to the extent such loss or
damage arises by reason of any negligence, misfeasance or willful
misconduct on the part of the Custodian or any of its employees or agents.
(b) LIMIT OF DUTIES. Without limiting the generality of the foregoing, the
Custodian shall be under no duty or obligation to inquire into, and shall
not be liable for:
1. The validity of the issue of any Securities purchased by the Fund,
the legality of the purchase thereof, or the propriety of the amount
paid therefor;
2. The legality of the sale of any Securities by the Fund or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or the sufficiency
of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor;
5. The legality of the declaration or payment of any distribution of
the Fund; or
6. The legality of any borrowing for temporary or emergency
administrative purposes.
(c) NO LIABILITY UNTIL RECEIPT. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not represented by
any check, draft, or other instrument for the payment of money, received by
it on behalf of the Fund until the Custodian actually receives and collects
such money directly or by the final crediting of the account representing
the Fund's interest in the Book-Entry System or the Depository.
(d) AMOUNTS DUE FROM TRANSFER AGENT. The Custodian shall not be under any
duty or obligation to take action to effect collection of any amount due to
the Fund from the Transfer Agent nor to take any action to effect payment
or distribution by the Transfer Agent of any amount paid by the Custodian
to the Transfer Agent in accordance with this Agreement.
(e) COLLECTION WHERE PAYMENT REFUSED. The Custodian shall not be under any
duty or obligation to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and until (a)
it shall be directed to take such action by a Certificate and (b) it shall
be assured to its satisfaction of reimbursement of its costs and expenses
in connection with any such action.
(f) APPOINTMENT OF AGENTS AND SUB-CUSTODIANS. The Custodian may appoint one
or more banking institutions, including but not limited to banking
institutions located in foreign countries, to act as Depository or
Depositories or as Sub-Custodian or as Sub-Custodians of Securities and
monies at any time owned by the Fund. The Custodian shall use reasonable
care in selecting a Depository and/or Sub-Custodian located in a country
other than the United States ("Foreign Sub-Custodian"), which selection
shall be in accordance with the requirements of Rule 17f-5 under the 1940
Act, and shall oversee the maintenance of any Securities or monies of the
Fund by any Foreign Sub-Custodian. In addition, the Custodian shall hold
the Fund harmless from, and indemnify the Fund against, any loss, action,
claim, demand, expense and proceeding, including counsel fees, that occurs
as a result of the failure of any Foreign Sub-Custodian or Depository to
exercise reasonable care with respect to the safekeeping of Securities and
monies of the Fund. Notwithstanding the generality of the foregoing,
however, the Custodian shall not be liable for any losses resulting from
the general risk of investing or holding Securities and monies in a
particular country, including, but not limited to, losses resulting from
nationalization, expropriation, devaluation, revaluation, confiscation,
seizure, cancellation, destruction or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency restrictions,
exchange controls, taxes, levies or other charges affecting the Fund's
property; or acts of war, terrorism, insurrection or revolution; or any
other similar act or event beyond the Custodian's control.
(g) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund are such as may properly be held by
the Fund under the provisions of its organization documents and the
Prospectus.
(h) RELIANCE ON CERTIFICATES AND INSTRUCTIONS. The Custodian shall be
entitled to rely upon any Certificate, notice or other instrument in
writing received by the Custodian and reasonably believed by the Custodian
to be genuine and to be signed by an officer or Authorized Person of the
Fund. The Custodian shall be entitled to rely upon any Written Instructions
or Oral Instructions actually received by the Custodian pursuant to the
applicable Sections of this Agreement and reasonably believed by the
Custodian to be genuine and to be given by an Authorized Person. The Fund
agrees to forward to the Custodian Written Instructions from an Authorized
Person confirming such Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business on the same day that
such Oral Instructions are given to the Custodian. The Fund agrees that the
fact that such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or enforceability
of the transactions hereby authorized by the Fund. The Fund agrees that the
Custodian shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions
provided such instructions reasonably appear to have been received from a
duly Authorized Person.
(i) OVERDRAFT FACILITY AND SECURITY FOR PAYMENT. In the event that the
Custodian is directed by Written Instruction (or Oral Instructions
confirmed in writing in accordance with Section 11(h) hereof) to make any
payment or transfer of monies on behalf of a Series for which there would
be, at the close of business on the date of such payment or transfer,
insufficient monies held by the Custodian on behalf of such Series, the
Custodian may, in its sole discretion, provide an overdraft (an
"Overdraft") to the Fund in an amount sufficient to allow the completion of
such payment or transfer. Any Overdraft provided hereunder: (a) shall be
payable on the next Business Day, unless otherwise agreed by the Fund and
the Custodian; and (b) shall accrue interest from the date of the Overdraft
to the date of payment in full by the Fund at a rate agreed upon in
writing, from time to time, by the Custodian and the Fund. The Custodian
and the Fund acknowledge that the purpose of such Overdraft is to
temporarily finance the purchase of Securities for prompt delivery in
accordance with the terms hereof, to meet unanticipated or unusual
redemption, to allow the settlement of foreign exchange contracts or to
meet other emergency expenses not reasonably foreseeable by the Fund. The
Custodian shall promptly notify the Fund in writing (an "Overdraft Notice")
of any Overdraft by facsimile transmission or in such other manner as the
Fund and the Custodian may agree in writing. To secure payment of any
Overdraft, the Fund hereby grants to the Custodian a continuing security
interest in and right of setoff against the Securities and cash in the
Series' account from time to time in the full amount of such Overdraft.
Should the Fund fail to pay promptly any amounts owed hereunder, the
Custodian shall be entitled to use available cash in the Series' account
and to liquidate Securities in the account as is necessary to meet the
Fund's obligations under the Overdraft. In any such case, and without
limiting the foregoing, the Custodian shall be entitled to take such other
actions(s) or exercise such other options, powers and rights as the
Custodian now or hereafter has as a secured creditor under the Pennsylvania
Uniform Commercial Code or any other applicable law.
(j) INSPECTION OF BOOKS AND RECORDS. The books and records of the Custodian
shall be open to inspection and audit at reasonable times by officers and
auditors employed by the Fund and by the appropriate employees of the
Securities and Exchange Commission.
The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry
System or the Depository and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
12. TERM AND TERMINATION.
(a) This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect thereafter until such
time as this Agreement may be terminated in accordance with the provisions
hereof.
(b) Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of receipt
of such notice. In the event such notice is given by the Fund, it shall be
accompanied by a certified vote of the Fund's Board, electing to terminate
this Agreement and designating a successor custodian or custodians, which
shall be a person qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian, the Fund shall, on
or before the termination date, deliver to the Custodian a certified vote
of the Fund's Board, designating a successor custodian or custodians. In
the absence of such designation by the Fund, the Custodian may designate a
successor custodian, which shall be a person qualified to so act under the
1940 Act. If the Fund fails to designate a successor custodian, the Fund
shall upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all Securities (other
than Securities held in the Book-Entry System which cannot be delivered to
the Fund) and monies then owned by the Fund, be deemed to be its own
custodian and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be
delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 12, this Agreement shall terminate to the extent specified in such
notice, and the Custodian shall upon receipt of a notice of acceptance by
the successor custodian on that date deliver directly to the successor
custodian all Securities and monies then held by the Custodian on behalf of
the Fund, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
13. LIMITATION OF LIABILITY.
The Fund and the Custodian agree that the obligations of the Fund
under this Agreement shall not be binding upon any of the Board members,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund, individually, but are binding only upon the
assets and property of the Fund. The execution and delivery of this
Agreement have been authorized by the Fund's Board members, and signed by
an authorized officer of the Fund, acting as such, and neither such
authorization by such Board members nor such execution and delivery by such
officer shall be deemed to have been made by any of them or any shareholder
of the Fund individually or to impose any liability on any of them or any
shareholder of the Fund personally, but shall bind only the assets and
property of the Fund.
14. MISCELLANEOUS.
(a) Annexed hereto as Appendix A is a certification signed by the Secretary
of the Fund setting forth the names and the signatures of the present
Authorized Persons. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event that any such present Authorized
Person ceases to be such an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until such new
certification shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the present Authorized Persons as set forth in the last
delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the Secretary
of the Fund setting forth the names and the signatures of the present
officers of the Fund. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event any such present officer ceases
to be an officer of the Fund or in the event that other or additional
officers are elected or appointed. Until such new certification shall be
received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signature of an officer as set forth
in the last delivered certification.
(c) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at
One Mellon Bank Center, Pittsburgh, Pennsylvania 15258 or at such other
place as the Custodian may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund, shall be sufficiently given if
addressed to the Fund and mailed or delivered to it at its offices at 200
Park Avenue, New York, New York 10166 or at such other place as the Fund
may from time to time designate in writing.
(e) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, (i) authorized, or ratified and approved by a vote of the Fund's
Board, including a majority of the Board members who are not "interested
persons" of the Fund (as defined in the 1940 Act), or (ii) authorized, or
ratified and approved by such other procedures as may be permitted or
required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent
of the Fund authorized or approved by a vote of the Fund's Board. Nothing
in this Agreement shall give or be construed to give or confer upon any
third party any rights hereunder.
(g) The Fund represents that copies of its organization documents are on
file with the Secretary of the Commonwealth of Massachusetts.
(h) This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania.
(i) The captions of the Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(j) This agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective representatives duly authorized as of the day
and year first above written.
DREYFUS INVESTMENT PORTFOLIOS
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
<PAGE>
SCHEDULE 1
NAME OF SERIES
Dreyfus Core Value Portfolio
Dreyfus MidCap Stock Portfolio
<PAGE>
CUSTODIAN ACCOUNT FOR PORTFOLIO SECURITIES TRANSACTIONS
APPENDIX A
___________________, Secretary of the Fund, does hereby certify that:
The following individuals have been duly authorized as Authorized
Persons to give Oral Instructions and Written Instructions on behalf of the Fund
and Series indicated and the specimen signatures set forth opposite their
respective names are their true and correct signatures:
NAME SIGNATURE SERIES
Dreyfus Core Value Portfolio
Dreyfus MidCap Stock Portfolio
______________________, Secretary
Dated: _________________
<PAGE>
APPENDIX A
AUTHORIZED SIGNATORIES: CASH ACCOUNT
<TABLE>
<CAPTION>
GROUP I Group II
<S> <C>
Paul R. Casti, Jr., Thomas Durante, Jean Paul R. Casti, Jr., Christopher Condron,
Farley, Gregory Gruber, Paul Molloy, Jeffrey N. Nachman, Joseph Connolly,
Jeffrey N. Nachman, James Windels, Brian Gregory Gruber, Thomas Durante, James
Ward, Phyllis Meiner, Robert Robol, Laura Windels, Paul Molloy, William T. Sandalls, Jr.
Sanderson and Mike Stalzer and Jean Farley
</TABLE>
1. Fees payable to Mellon Bank, N.A. or Boston Safe Deposit and Trust Company
pursuant to written agreement with the Fund for services rendered in its
capacity as Custodian or agent of the Fund, or to Dreyfus Transfer, Inc. in
its capacity as Transfer Agent or agent of the Fund:
Two (2) signatures required, one of which must be from Group II,
except that no individual shall be authorized to sign more than
once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either Group I or
Group II, or both such Groups, except that no individual shall be
authorized to sign more than once.
3. Other expenses of the Fund, over $5,000 but not over $25,000:
Two (2) signatures required, one of which must be from Group II,
except that no individual shall be authorized to sign more than
once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or Group II,
including any one of the following: Paul R. Casti, Jr.,
Christopher Condron, James Windels, Jeffrey N. Nachman, Joseph
Connolly or William T. Sandalls, Jr., except that no individual
shall be authorized to sign more than once.
CUSTODIAN ACCOUNT FOR PORTFOLIO SECURITIES TRANSACTIONS
Two (2) signatures required from any of the following:
Joseph Connolly, Paul R. Casti, Jr., Thomas Durante, Jean Farley,
Gregory Gruber, Paul Molloy, Jeffrey N. Nachman, James Windels,
Mary Kate Macchia, Robert Salviolo, Kathy Jimenez, and Mike
Stalzer.
<PAGE>
APPENDIX B
DREYFUS INVESTMENT PORTFOLIOS
I, ____________________, Vice President and Assistant Secretary of the Fund, do
hereby certify that the only series of shares of the Fund issued and/or
authorized by the Fund as of the date of this Custody Agreement are shares of
beneficial interest, $.001 par value, as follows: Dreyfus Core Value Portfolio
Dreyfus MidCap Stock Portfolio
______________________, Vice President
and Assistant Secretary
Dated:
<PAGE>
APPENDIX C
The following are designated publications for purposes of paragraph 2
of Section 4 (f):
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE>
SCHEDULE A
I. ASSET BASED CHARGES
A. U.S. SECURITIES (NET ASSET VALUE)
First $1 Billion 0.70 Basis Points
Next $1 Billion 0.50 Basis Points
Excess 0.25 Basis Points
B. INTERNATIONAL SECURITIES (MARKET VALUE)
Foreign Assets in all funds will be totaled by country and charged a
basis point fee by category.
Euroclear 5.00 Basis Points
Category I 8.00 Basis Points
Category II 14.00 Basis Points
Category III 16.00 Basis Points
Category IV 45.00 Basis Points
(A complete listing of countries is on page 2 of this fee schedule)
II. TRANSACTION CHARGES
A. DOMESTIC
U.S. Buy/Sell transaction (DTC, PTC, Fed) $_____
Physical U.S. Buy/Sell transaction $20
B. INTERNATIONAL
Euroclear $ 25
Category I $ 35
Category II $ 60
Category III $ 80
Category IV $100
C. OTHER TRANSACTIONS
Futures Transaction $ 8
Paydown Transaction $ 5
Margin Variation Wire $ 10
F/X not executed at BSDT $ 20
Options Round Trip $ 20
Wire Transfer $ 5
III. OUT-OF-POCKET EXPENSES
The Custodian will pass through to the client any out-of-pocket expenses
including, but not limited to, postage, courier expense, registration
fees, stamp duties telex charges, custom reporting or custom
programming, internal/external tax, legal or consulting costs, proxy
voting expenses, etc.
The Custodian reserves the right to amend its fees if the service
requirements change in a way that materially affects our
responsibilities or costs. Support of other derivative investment
strategies or special processing requirements (e.g., external cash
sweep, third party securities lending etc.) may result in additional
fees.
<PAGE>
IV. COUNTRY BY COUNTRY CATEGORIES:
CATEGORY I CATEGORY II CATEGORY III CATEGORY IV
Australia Argentina Austria Bangladesh
Belgium Denmark Indonesia Brazil
Canada Finland Israel Colombia
France Hong Kong South Korea China
Germany Malaysia Philippines Czech Republic
Ireland Mexico Singapore Greece
Italy Norway Thailand India
Japan Spain Jordan
Netherlands Luxembourg
New Zealand Pakistan
South Africa Peru
Sweden Poland
Switzerland Portugal
United Kingdom Sri Lanka
Cedel Taiwan
Turkey
Uruguay
Venezuela
<PAGE>
SCHEDULE B
The Fund will pay to the Custodian as soon as possible after the end
of each month all out-of-pocket expenses reasonably incurred in connection with
the assets of the Fund.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
