DREYFUS CORP, 10-K, 1994-03-30

DREYFUS CORP
10-K, 1994-03-30
INVESTMENT ADVICE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the Fiscal Year Ended December 31, 1993

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from _______________ to ______________.

Commission File Number 1-5240
- --------------------------------------------------------------------------

THE DREYFUS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)

New York 13-5673135
- -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

200 Park Avenue, New York, N.Y. 10166
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 922-6000
-----------------------
Securities registered pursuant to Section 12 (b) of the Act:

Title of each class Name of each exchange on which registered
------------------- -----------------------------------------

Common Stock (par value $.10) The New York Stock Exchange, Inc.
- ------------------------------ --------------------------------
The Pacific Stock Exchange, Inc.
-------------------------------

Securities registered pursuant to Section 12 (g) of the Act - None
----
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.[X]
State the aggregate market value of the voting stock held by nonaffiliates
(excludes directors, officers, and principal shareholders filing Schedule
13D and 13G's) of the registrant as of January 31, 1994.

Common Stock (par value $.10)- $1,460,428,000
----------------------------------------------

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of February 28, 1994.

Common Stock (par value $.10)-36,556,828 shares
------------------------------------------------

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual stockholders' report for the year ended December
31, 1993 are incorporated by reference in Part II.

-2-

PART I

ITEM 1. BUSINESS
- ------ --------

General
- -------

The Dreyfus Corporation ("Corporation") is one of the nation's oldest
and largest mutual fund management companies. Based upon assets under
management at December 31, 1993, the Corporation is the sixth largest
mutual fund organization in the United States, the second largest manager
of tax-exempt bond funds, the third largest manager of tax-exempt money
market funds, and the third largest manager of taxable money market funds.
As of December 31, 1993, the Corporation managed, advised or administered
assets totalling $77.6 billion. As of December 31, 1993, the Corporation
managed or administered 136 different mutual fund portfolios, including
money market funds (taxable and tax-exempt), tax-exempt bond funds, equity
funds and taxable fixed income funds, with approximately 1.9 million
shareholder accounts.

The Corporation serves primarily as a manager of mutual funds,
providing both investment advisory and administrative services. The
Corporation provides investment advisory services to the Dreyfus family of
funds pursuant to agreements with each of those funds, in accordance with
which the Corporation manages each fund's portfolio of investments, by
making investment decisions and formulating and executing the fund's
investment strategy, subject to supervision by the fund's board of
directors and in accordance with the fund's fundamental investment
objectives and policies. Administrative services generally consist of
internal accounting and legal services, including preparing and
distributing communications to shareholders, preparing government filings
and tax returns, certain bookkeeping and accounting functions and other
related services. The Corporation's wholly-owned subsidiary, Dreyfus
Service Corporation ("Service Corporation"), markets, sells and
distributes shares of the Dreyfus family of funds. Service Corporation is
a registered broker-dealer under the Securities Exchange Act of 1934 and
is a member of the National Association of Securities Dealers, Inc.
Another wholly-owned subsidiary, Dreyfus Management, Inc., provides
investment advisory and administrative services to various pension plans,
institutions and individuals (such accounts and certain accounts of the
trust company described below are collectively referred to herein as
"separately advised accounts"). The Corporation and Dreyfus Management,
Inc. are each registered under the Investment Advisers Act of 1940.

The Corporation also owns a Federal savings bank, a New York trust
company, a real estate investment advisory company and an insurance
company. For the year ended December 31, 1993, the Corporation generated
over 84% of its and its subsidiaries' total revenues.

On December 5, 1993, the Corporation entered into an Agreement and
Plan of Merger providing for the merger of the Corporation with a
subsidiary of Mellon Bank Corporation ("Mellon"). Under the terms of the
agreement, the Corporation's stockholders will be entitled to receive
.88017 shares of Mellon common stock for each share of the Corporation's
common stock, in a tax-free exchange. Following the merger, it is planned
that the Corporation will be a direct subsidiary of Mellon Bank, N.A., a
direct subsidiary of Mellon. Closing of the merger is subject to a number
of contingencies, including the receipt of certain regulatory approvals,
the approvals of the stockholders of the Corporation and of Mellon, and
approvals of the boards of directors and shareholders of mutual funds
advised or administered by the Corporation. The merger is expected to
occur in mid-1994, but could occur later in 1994.
-3-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

Mutual Funds and Other Assets Under Management
- ----------------------------------------------

At December 31, 1993, the Corporation managed, advised or
administered 23 taxable money market fund portfolios, 43 tax-exempt bond
fund portfolios, 36 equity fund portfolios, 19 tax-exempt money market
fund portfolios, and 15 fixed income fund portfolios. Some funds offer
more than one investment portfolio and, with respect to some portfolios,
the Corporation shared advisory or administrative responsibilities with
other parties.

The Corporation's taxable money market fund portfolios seek to
provide high current income, to the extent consistent with the
preservation of capital, through investment in short-term corporate debt,
bank deposits and government obligations. The tax-exempt funds include a
broad variety of portfolios for investors seeking tax-exempt income. The
Corporation's tax-free bond fund portfolios include state-specific funds
targeted toward investors in Arizona, California, Connecticut, Florida,
Georgia, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New
York, North Carolina, Ohio, Pennsylvania, Texas and Virginia. The
Corporation's tax-exempt money market fund portfolios invest in short-term
municipal obligations to provide income free of federal (and for some
funds, state and local) income taxes. The equity fund portfolios seek to
provide capital growth primarily through investment in U.S. or foreign
common stocks or to provide both income and capital appreciation through
investment in a varying combination of equity and debt instruments. The
objective of the fixed-income fund portfolios is to produce income through
investment in corporate debt, U.S. or foreign government obligations or
combinations thereof.

The following table sets forth certain information with respect to
the net assets managed, advised or administered by the Corporation by fund
category, at the dates shown (in billions):

At December 31,
---------------------------------
1993 1992
------------ ----------

Taxable money market funds. . . . . . . . $31.2 $38.0
Tax-exempt bond funds . . . . . . . . . . 21.3 17.9
Equity funds. . . . . . . . . . . . . . . 8.3 7.0
Tax-exempt money market funds . . . . . . 7.6 7.6
Fixed income funds. . . . . . . . . . . . 4.8 3.9
Funds jointly advised/administered. . . . 3.2 3.8
Separately advised accounts . . . . . . . 1.2 1.3
----------- -----------

Total $77.6 $79.5
=========== ===========

Mutual Fund Developments in 1993
- --------------------------------

During 1993, the Corporation continued to introduce funds which offer
the public a range of investment options with greater diversity.

During the first quarter of 1993, Dreyfus Strategic Investing and
funds in the Premier Family of Funds began offering multiple classes of
shares. The multiple classes consist of Class A shares, which are sold
with a sales charge imposed at the time of purchase, and Class B shares,
which are subject to a contingent deferred sales charge imposed on
redemptions made within a specified period and operate pursuant to a
distribution plan adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"). These funds offer
alternative classes of shares

-4-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

so that an investor may choose the method of purchase deemed most
desirable given the amount of the purchase, the length of time the
investor expects to hold the shares and other relevant circumstances.

Also during the first quarter of 1993, First Prairie U.S. Government
Income Fund commenced operations. Its objective is to provide as high a
level of current income as is consistent with the preservation of capital.
The Corporation provides administrative services for the fund and Service
Corporation serves as the fund's distributor. The First National Bank of
Chicago is the fund's investment adviser.

During the second quarter of 1993, the Registration Statement for
Dreyfus International Equity Fund, Inc. was declared effective and the
fund commenced operations. The fund's objective is capital growth. The
Corporation serves as the fund's investment adviser and Service
Corporation as its distributor; M&G Investment Management Limited is the
fund's sub-investment adviser.

Also during the second quarter, the Capital Appreciation Portfolio of
Dreyfus Variable Investment Fund commenced operations. The Capital
Appreciation Portfolio's primary goal is to provide long-term capital
growth consistent with the preservation of capital; current income is a
secondary goal. The fund, which consists of six separate portfolios, was
designed as a funding vehicle for variable annuity contracts and variable
life insurance policies offered by the separate accounts of various life
insurance companies.

Pursuant to stockholder vote, on May 7, 1993, Dreyfus Index Fund
merged into Peoples Index Fund, Inc. and on September 17, 1993, The
Dreyfus Convertible Securities Fund, Inc. merged into Dreyfus Growth and
Income Fund, Inc. in a tax-free exchange.

During the third quarter of 1993, the Registration Statement for
Dreyfus Asset Allocation Fund, Inc. was declared effective and the fund
commenced operations. The fund's objective is to maximize total return,
consisting of capital appreciation and current income.

Premier Growth Fund, Inc. ("Premier Growth") and Premier California
Insured Municipal Bond Fund ("Premier California Insured"), the latest
additions to the Premier Family of Funds, commenced operations during the
third quarter of 1993. Premier Growth's primary goal is to provide long-
term capital growth consistent with the preservation of capital; current
income is a secondary goal. Premier California Insured seeks to maximize
current income exempt from Federal and State of California personal income
taxes to the extent consistent with the preservation of capital.

Pursuant to stockholder vote, on September 24, 1993, all of the
assets and liabilities of McDonald Money Market Fund, Inc. and McDonald
U.S. Government Money Market Fund, Inc., for which the Corporation had
served as sub-investment adviser and administrator, were transferred into
Gradison-McDonald U.S. Government Reserves which the Corporation does not
advise or administer. Additionally, McDonald Tax Exempt Money Market
Fund, Inc., for which the Corporation had served as sub-investment adviser
and administrator, was liquidated on September 27, 1993.

During the fourth quarter of 1993, Dreyfus Pennsylvania Intermediate
Municipal Bond Fund commenced operations. The goal of this fund is to
provide as high a level of current income exempt from Federal and
Pennsylvania income taxes as is consistent with the preservation of
capital.
-5-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

During the fourth quarter, Dreyfus Institutional Short Term Treasury
Fund commenced operations. Its objective is to provide investors with a
high level of current income with minimum fluctuation of principal value.
Also during the fourth quarter, Dreyfus Florida Municipal Money Market
Fund commenced operations.

In the fourth quarter, The Dreyfus Socially Responsible Growth Fund,
Inc. commenced operations. The fund's primary goal is to provide capital
growth; current income is a secondary goal. The fund is intended to be a
funding vehicle for variable annuity contracts and variable life insurance
policies to be offered by the separate accounts of various life insurance
companies.

During the fourth quarter, Dreyfus Global Investing (A Premier Fund)
began operating under the name Premier Global Investing.

The Corporation is continuing to consider the development of
additional funds to serve the diverse investment interests of various
segments of the public.

Marketing
- ------------

The Corporation has achieved its position in the marketplace by
concentrating substantial resources in sales and investor support
activities and uses a variety of distribution channels to market shares in
its funds. The Corporation markets load and no-load mutual fund
products to its retail customers directly and through institutional
clients such as banks, securities dealers and financial institutions. The
Corporation also markets mutual fund products directly to those
institutions for their own accounts and the accounts of their customers.
Finally, the Corporation markets its funds to and through various employee
benefit plans.

The Corporation's largest marketing channel is its retail services
division which engages in direct marketing, primarily of no-load funds, to
retail customers through mail and media advertising. At December 31,
1993, the Corporation operated 16 Financial Centers that conduct sales and
customer service activities in 12 major cities across the United States.
All direct sales to the Corporation's customers, including those
originated by mail and media advertising and those originated through the
Financial Centers, are made through Service Corporation.

The Corporation also has developed, through its Institutional
Services Division, a number of arrangements to market products to the
customer bases of other institutions and has sales or servicing agreements
in place with over 1,700 broker-dealer firms and more than 300 banks and
bank-affiliated broker-dealers. The Corporation's Institutional Services
Division provides training support, legal information, marketing expertise
and other services to these institutions to support their sales efforts.
These banks and broker-dealers also market and sell investment products
that compete with Dreyfus' products, including, in some cases, products
sponsored by those institutions themselves. Sales representatives at
these banks and broker-dealers may be offered compensation incentives to
sell their own firm's investment products, or may choose to recommend to
their customers investment products offered by firms other than the
Corporation. In addition, the Corporation has arrangements with a number
of banks jointly to manage, administer or distribute funds advised by
those banks.

The Dreyfus Group Retirement Plans Division markets the Corporation's
funds to various employee benefit plans, and provides related services
such as processing group defined contribution plan transactions and
providing client enrollment and servicing functions.

-6-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

Fee Revenues
- ------------

The majority of the Corporation's revenues are derived from
management, investment advisory and administrative fees (collectively,
"fee revenues"). The Corporation had total net revenues for the fiscal
years ended December 31, 1993 and December 31, 1992 of $386 million and
$342.4 million, respectively, of which $297.5 million (77.1% of revenues)
and $273.6 million (79.9% of revenues), respectively, represented fee
revenues. Fee revenues from each fund are based on a percentage of the
value of the average net assets of that fund. The fee rate varies
according to the type of fund and the services provided.

The following table sets forth certain information with respect to
the Corporation's fee revenues for the periods shown:
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------------------------------

1993 1992 1991 1990 1989
---- ---- ---- ---- ----

(in thousands)

<S> <C> <C> <C> <C> <C>
Management, investment
advisory and
administrative fees,
net of fees waived* . . $306,367 $280,304 $225,617 $198,323 $190,297

Less: Fund expense
reimbursements. . 8,895 6,701 5,404 21,880 9,856
-------- -------- -------- -------- --------

Management, investment
advisory and
administrative
fees (net). . . . . . . $297,472 $273,603 $220,213 $176,443 $180,441
======== ======== ======== ======== ========
*Amount of
fees waived . . . . . . $ 48,115 $ 66,452 $ 87,222 $ 60,196 $ 19,663
======== ======== ======== ======== ========
Management, investment
advisory and
administrative
fees, by fund
category (net):

Taxable money market
funds . . . . . . . . . $105,219 $111,961 $ 81,890 $ 51,296 $ 54,503

Tax-exempt bond funds. . 100,781 79,482 63,223 51,822 51,709

Equity funds . . . . . . 44,257 36,992 33,228 30,960 32,177

Tax-exempt money market
funds . . . . . . . . . 18,799 19,000 17,065 19,458 19,988

Fixed income funds . . . 19,678 15,757 13,166 11,096 11,442

Funds jointly
advised/administered. . 4,131 4,945 5,800 5,777 4,217

Separately advised
accounts. . . . . . . . 4,607 5,466 5,841 6,034 6,405
-------- -------- -------- -------- --------

Total $297,472 $273,603 $220,213 $176,443 $180,441
======== ======== ======== ======== ========
</TABLE>

(Years prior to 1993 have been reclassified to conform to the current
year's presentation.)

-7-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

The increase in management, investment advisory and administrative
fees during 1993, as shown in the preceding table, was principally due to
a reduction of management fees waived and reflects a change in the mix of
the average net assets under management during the year. Although the
average net assets of sponsored taxable money market funds declined during
1993, there has been substantial growth in tax-exempt bond and equity
funds during the same period. Management fee rates charged to tax-exempt
bond and equity funds are generally higher than the rates charged to
taxable money market funds. During 1992, the increase in management,
investment advisory and administrative fees was principally due to an
increase in the average net assets of sponsored taxable money market funds
for which a management fee was charged.

From time to time for competitive reasons, the Corporation agrees
with a particular fund to waive certain management fees and/or to
reimburse certain fund expenses, either for a specified or an unspecified
period of time, in order to increase the fund's rate of return to
investors and thereby promote the growth of the fund's assets. In the
future, the Corporation may continue to follow such practices; however, it
is not possible to predict what effect, if any, the imposition of
management fees and/or the discontinuance of fund expense reimbursements
may have on the future level of certain fund assets under management.
Furthermore, the Corporation presently is unable to determine to what
extent, if any, it may impose management fees on funds where fee waivers
presently exist, or to what extent fund expense reimbursements may be
reduced in the future.

As required by the 1940 Act, the management contracts of each of the
funds managed by the Corporation provide that those contracts are subject
to annual approval by (i) the Board of Directors of the fund or (ii) vote
of a majority of the outstanding voting securities of the fund, provided
that in either event the continuance is also approved by a majority of the
directors who are not "interested persons" (as defined in the Investment
Company Act) of the fund or the manager, by vote cast in person at a
meeting called for the purpose of voting such approval. These statutory
requirements are also applicable to the sub-investment advisory contracts
of the Corporation. The contracts are subject to termination by either
party without penalty on 60 days' notice as required by the 1940 Act.
They are also automatically terminated in the event of any assignment of
the contracts. "Assignment" is defined in the 1940 Act as including any
direct or indirect transfer of a controlling block of voting stock. The
ownership of more than 25% of the voting stock of a company creates a
presumption of control. Control is also defined as the power to exercise
a controlling influence over the management or policies of a company.
Similar requirements are applicable to the underwriting and distribution
agreements between Service Corporation, as principal underwriter, and the
Dreyfus family of funds. The Corporation's proposed merger with Mellon
would constitute an "assignment" for these purposes, and for that reason
the conditions to the merger include the approvals of the boards of
directors and stockholders of the funds advised by the Corporation.
Certain administrative contracts of the Corporation will also terminate in
the event of such "assignment" and the Corporation will therefore seek the
approvals of the Boards of Directors of the applicable funds.

Under the terms of the management contracts with the funds, the
Corporation supervises and assists in the management of their investment
portfolios, subject to the approval of the funds' directors, and furnishes
statistical and research data. The Corporation also provides office
facilities and a research library for the funds, supplies accounting
services and clerical, secretarial and administrative personnel, arranges
for fidelity and other insurance as appropriate, and generally supplies
all investment and administrative services and facilities. The
Corporation pays the salaries of officers and employees of the funds. The
funds pay their own corporate expenses such as outside legal and auditing
fees, corporate reporting and meeting costs, Securities and Exchange
Commission

-8-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

("SEC") registration fees, transfer agency, dividend disbursing and
custodial expenses and taxes and, in addition, pay brokerage commissions
and any interest charges on borrowings. In the case of funds sold with a
sales charge, Blue Sky (state securities law) registration fees and
prospectus printing costs are paid by the sponsor and/or underwriter. In
the case of funds sold without a sales charge, the Blue Sky fees are paid
by the funds as well as the cost of printing prospectuses for shareholders
and regulatory agencies. In addition, certain of these funds bear
investor servicing costs allocated to them by the Corporation.

The Mutual Fund Industry and Competition
- ----------------------------------------

The mutual fund industry has grown dramatically over the past several
years and is highly competitive. Total assets managed by the industry
grew from approximately $810 billion at December 31, 1988 to over $2
trillion at December 31, 1993. There are presently almost 600 mutual fund
management companies in the United States, managing over 4,500 mutual
funds of varying sizes and investment policies. The Corporation and the
mutual fund industry are in competition with insurance companies, banking
organizations, securities dealers and other financial institutions that
provide investors with competing mutual funds and alternatives to mutual
funds. This competition has increased over the past several years, in
part as a result of a number of rulings and interpretations issued by
Federal bank regulatory agencies that have expanded significantly the
range of mutual fund activities in which banks and bank holding companies
may engage. Competition is based upon investment performance in terms of
attaining the stated objectives of particular funds, advertising and sales
promotional efforts, available distribution channels (such as banks and
broker dealers) and the type and quality of services offered to investors.

With respect to open-end tax-exempt bond funds, there are over 1,000
funds currently offering their shares to the public. At December 31,
1993, based upon assets under management, Dreyfus Municipal Bond Fund was
one of the largest of these funds. Competition in this area is keen not
only among the various tax-exempt bond funds but also with respect to
municipal bond investment trusts sponsored largely by major securities
firms, which have for a number of years actively solicited investments in
these fixed trusts by the public and are continuing to do so. Dreyfus
Municipal Money Market Fund, Inc. also meets competition from over 300
municipal money market funds.

With respect to money market funds, such as Dreyfus Liquid Assets and
Dreyfus Worldwide Dollar Money Market Fund, there are over 700 such funds,
many of which have been sponsored by major securities firms. Money market
funds generally fall into three categories: (i) those primarily soliciting
the general public, particularly the small or average individual investor,
(ii) those formed by securities brokerage firms primarily for their
customers, and (iii) those offering their shares primarily to
institutional investors, such as bank trust departments, pension funds and
investment advisers. Dreyfus Liquid Assets and Dreyfus Worldwide Dollar
Money Market Fund, offering their shares to the general public, are among
the larger money market funds of that type. Money market funds such as
Dreyfus Treasury Prime Cash Management, Dreyfus Cash Management, Dreyfus
Government Cash Management, and Dreyfus Treasury Cash Management are
designed primarily for institutions. Particularly when interest rates are
low, competition significantly limits the amounts of fees which can be
charged to money market funds because those fees materially affect the
yield offered to investors.

Extended periods of declining or increasing interest rates may, in
different ways, affect the various types of mutual funds sponsored by the
Corporation.
-9-
ITEM 1. BUSINESS-CONTINUED
- ------ --------

The ability of a mutual fund complex to provide competitive services
to fund investors is, in part, dependent upon the type and quality of
transfer agency and related services being provided to the funds. Factors
which can materially affect the nature of such transfer agency services
include: the size of the fund complex, the cost of the services, and the
experience and economic resources of the provider(s) of such services, as
well as their technological, staffing and managerial capabilities.

Consumer Financial Services
- ---------------------------

During 1993 the Savings Bank, with its principal office located in
Paramus, New Jersey, opened a branch office in San Francisco, California.
It also received conditional approval from The Office of Thrift
Supervision to open additional branch offices in six other states.

Investments
- -----------

The Corporation invests its assets in U.S. and foreign government
obligations, equity securities, including public utilities and other
dividend-paying, widely-held common stocks of major corporations, non-
readily marketable limited partnerships and other non-readily marketable
securities, options to purchase certain securities and in funds sponsored
by the Corporation. From time to time, the Corporation makes investments
in special situations. Investments maintained by the Corporation are used
as a resource to provide funds to sponsor, promote and market shares of
the Dreyfus family of funds and to sponsor and promote new business
activities.

Other Operations
- ----------------

Dreyfus Personal Management, Inc., a wholly-owned subsidiary of the
Corporation that provided personalized portfolio management to a limited
number of individual clients, discontinued operations as of June 30, 1993.

Dreyfus Precious Metals, Inc., a wholly-owned subsidiary of the
Corporation, purchases and sells precious metals and coins for investors.
Operating results to date from this subsidiary have not been significant
to the Corporation.

During 1993, the Corporation sold Dreyfus Life Insurance Company, an
insurance company subsidiary, for $11.7 million.

Personnel
- ---------

The Corporation and its subsidiaries had over 2,100 employees at
December 31, 1993, most of whom were employed in New York.
-10-
ITEM 2. PROPERTIES
- ------ ----------

On September 25, 1989 the Corporation entered into an amended
and restated lease to consolidate its corporate headquarters at 200 Park
Avenue in New York City. The lease provides for the rental of an
aggregate of 228,883 square feet and expires in 2005. The Corporation has
an option to extend the term of the lease for three successive five-year
periods. On May 19, 1993 the Corporation leased an additional 11,000
square feet at 200 Park Avenue which expires in 2005. On October 1, 1993,
the Corporation subleased 38,000 square feet at 200 Park Avenue which
expires in 1997. The Corporation has an option to extend the term of this
lease for a five-year period. The Corporation also leases approximately
10,500 square feet at 150 Varick Street, which expires on May 31, 1994.

Service Corporation owns approximately 26,733 square feet of
office space in Jersey City, N.J. In January, 1990, Service Corporation
subleased 94,695 square feet in Uniondale (Long Island), N.Y., pursuant to
a sublease which expires in 2005. In March and October, 1993 Service
Corporation leased an additional 31,565 square feet which expires in 2005.
Service Corporation also leases office space in twelve other cities. See
Note 9 to the consolidated financial statements (listed in Item 8 below)
for further information with respect to the Corporation's leases.

The Corporation believes that the above-described premises are
suitable and adequate for the Corporation's current needs in all material
respects. All such premises are being fully utilized for the conduct of
the Corporation's business or that of its subsidiaries.

ITEM 3. LEGAL PROCEEDINGS
- ------ -----------------

CLASS ACTIONS. On December 6, 1993, the Corporation and Mellon
issued a joint press release announcing the merger described in Item 1
above (the "Merger"). Subsequently, six purported class action suits
brought by six public shareholders of the Corporation were filed in
December 1993 in the Supreme Court of the State of New York, County of New
York, naming the Corporation, Mellon and the individual directors of the
Corporation as defendants. Three of these complaints have been served.
Defendants' time to move, answer or otherwise respond to these complaints
has not yet expired.

In these complaints, plaintiffs allege, among other things, that
the Corporation and its Directors breached their fiduciary duties to the
public shareholders of the Corporation by agreeing to the sale of the
Corporation at a price which does not maximize shareholder value; failing
to include a collar, or other form of price protection, for the Exchange
Ratio; placing the defendants' interests above those of the Corporation's
shareholders; including in the Merger Agreement a $50 million termination
fee; and failing to create the conditions for an open and vigorous auction
of the Corporation. The complaint seeks injunctive relief as well as
compensatory and punitive damages.

The Corporation believes that these complaints lack merit and
intends to defend them vigorously.

OTHER CLASS ACTION. On March 23, 1994, two stockholders of
Dreyfus Liquid Assets, Inc. ("Dreyfus Liquid Assets") and Dreyfus Growth
Opportunity Fund, Inc. ("Dreyfus Growth") filed a complaint in the Supreme
Court of the State of New York, County of Queens, naming the Corporation and
Service Corporation as defendants, and Dreyfus Liquid Assets and Dreyfus
Growth, individually, and as representatives of the management investment
companies for which the Corporation serves as investment adviser under the
1940 Act, as nominal defendants. The
-11-
ITEM 3. LEGAL PROCEEDINGS-CONTINUED
- ------ -----------------

complaint is brought derivatively on behalf of Dreyfus Liquid Assets and
Dreyfus Growth, individually, and as representatives of the Dreyfus family of
funds.

In the complaint, the plaintiffs allege, among other things,
that the Corporation and Service Corporation violated their fiduciary
duties by receiving pecuniary benefits from the sale of their "trust
offices" in connection with the Merger. The plaintiffs further allege that
the Corporation and Service Corporation breached their respective
fiduciary duties by charging the Dreyfus family of funds excessive fees,
of at least $55 million, in order to maximize profits earned from the sale
of the "trust offices," and by acting solely to maximize their own profits
through the proposed sale of the "trust offices" to Mellon, in violation of
Section 15(f) of the 1940 Act. Finally, the plaintiffs allege that the Merger
will impose an "unfair burden" on the Dreyfus family of funds.

The action seeks, among other things, to enjoin the Corporation
and Service Corporation from selling the profits from the "trust offices" to
Mellon, or, in the event the Merger is consummated, a rescission of such sale,
or an accounting and disgorgement of all profits earned by the Corporation and
Service Corporation as a result of the sale of the "trust offices," unspecified
compensatory damages, costs and disbursements.

Defendants' time to move, answer or otherwise respond to the
complaint has not yet expired. The Corporation believes that the
complaint lacks merit and intends to defend the suit vigorously.

APPLICATION FILED WITH SEC. On December 22, 1993, six
shareholders of mutual funds of which the Corporation is the adviser filed
an application with the SEC for a statutory determination that the
"independent" directors of the individual Corporation-managed mutual funds
are "interested" directors within the meaning of the 1940 Act, thereby
prohibiting them from voting on each of the fund's advisory contracts and
other related matters in connection with the Merger (the "Application").
In the Application, the applicants allege, among other things, that (i)
many of the "independent" directors serve on multiple boards of funds
within the Corporation-managed mutual funds, (ii) as a result of such
service, such directors earn material sums of money for very limited
services, (iii) such directors have material business or professional
relationships with the investment adviser, the Corporation, and (iv) these
directors are, therefore, "interested." The Application further claims
that common service on multiple boards with "interested" directors who are
employees of the Corporation renders the "independent" directors
"interested." The applicants also allege that since the "independent"
directors of the Corporation-managed mutual funds are "interested," the
directors are not qualified to make decisions on behalf of the funds.

Applicants further note that as a result of the Merger, the
Corporation's advisory contracts with various funds will terminate.
Applicants contend that truly independent directors might well be in a
position to bargain for possibly more advantageous terms in the investment
advisory contracts from Mellon than had been negotiated with the
Corporation. In the Application, applicants are seeking (i) a hearing
before the SEC to consider their application, (ii) discovery from the
Corporation and Mellon prior to such hearing, as such is permitted under
the Administrative Procedure Act, and (iii) an order to the Corporation to
cease and desist any efforts to obtain approval by the shareholders or the
Boards of Directors of the Corporation-managed mutual funds of the
proposed Merger or new contracts for advisory services arising from such
Merger pending the hearing and a final ruling on the application by the
SEC.
-12-
ITEM 3. LEGAL PROCEEDINGS-CONTINUED
- ------ -----------------

The "independent" directors have opposed the Application on the
grounds that (i) the Directors are not interested persons within Section
2(a)(19) of the 1940 Act, and (ii) the legislative history, court and SEC
decisions, and industry practice all recognize that service on multiple
boards within a mutual fund complex does not render a director
"interested" within the meaning of the 1940 Act. Counsel for the
"independent" directors have advised the Corporation that the Application
lacks merit.

OTHER. The Corporation also is involved in ordinary routine
litigation incidental to its business. Other than as described above,
there are no pending legal proceedings or contingent liabilities affecting
the Corporation that are expected to have a material adverse impact on the
Corporation's financial position and results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------ ---------------------------------------------------

No matters were submitted to a vote of the stockholders of the
Corporation during the fourth quarter of 1993.

-13-
PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- ------ -----------------------------------------------------
STOCKHOLDER MATTERS
-------------------

Common Stock Market Prices and Dividends on page 17 of the
annual stockholders report for the year ended December 31, 1993 are
incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA
- ------ -----------------------

Selected Consolidated Financial Data on page 3 of the annual
stockholders report for the year ended December 31, 1993 are incorporated
herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------ ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------

Management's Discussion and Analysis of Financial Condition and
Results of Operations on pages 4 through 6 of the annual stockholders
report for the year ended December 31, 1993 are incorporated herein by
reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------ -------------------------------------------

The following consolidated financial statements of the
registrant and its subsidiaries are submitted in a separate section of this
report:

Consolidated statements of income--years ended
December 31, 1993, 1992 and 1991
Consolidated balance sheets--December 31, 1993 and 1992
Consolidated statements of changes in Stockholders'
Equity--years ended December 31, 1993, 1992 and 1991
Consolidated statements of cash flows--years ended
December 31, 1993, 1992 and 1991
Notes to consolidated financial statements

Selected Quarterly Consolidated Financial Data, on page 3 of the
annual stockholders report for the year ended December 31, 1993, are
incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------ ---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

No events requiring disclosure under this item have occurred.
-14-
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------- --------------------------------------------------

Identification of Directors
- ---------------------------

The following table lists the names, ages (at December 31,
1993), and principal occupation and employment during the past five years
of each Director of the Corporation, as well as the period he or she has
served as a Director. Directors are elected to serve until the next
annual meeting of the Corporation and until their successors shall have
been duly chosen and shall have qualified.

Principal Occupation Director
Name Age or Employment Since
- ---- --- ------------------- ---------

Mandell L. Berman 76 Real Estate Consultant and Private 1970
Investor. Mr. Berman is also
Immediate Past Chairman of the
Board of Trustees of the Skillman
Foundation, a member of the Board
of Vintners International, and
serves as a member of the Executive
Investment Committee of the
Corporation's Board of Directors.

Joseph S. DiMartino 50 President and Chief Operating Officer 1982
of the Corporation since October 1982,
formerly Executive Vice President since
October 1981, and prior thereto Senior
Vice President of the Corporation;
Executive Vice President and a Director
of Service Corporation; an officer
and/or director or trustee of various
investment companies advised or
administered by the Corporation. Mr.
DiMartino is also a Director of Noel
Group, Inc., a Director and Corporate
Member of the Muscular Dystrophy
Association, and a Trustee of Bucknell
University.

Alvin E. Friedman 74 Senior Adviser to Dillon, Read & Co. 1984
Inc., an investment banking firm, since
February 1986, formerly a Director
since May 1984; prior thereto, managing
director of Lehman Brothers Kuhn Loeb
Incorporated. Mr. Friedman is a
Director and member of various Board
committees of Avnet, Inc. He also
serves as a member of the Audit/
Compensation and Executive Investment
Committees of the Corporation's Board of
Directors.

Lawrence M. Greene 82 Legal Consultant to the Corporation 1965
since January 1982, formerly Vice
President-Legal of the Corporation;
Executive Vice President and Director
of Service Corporation; an officer
and/or director or trustee of various
investment companies managed by the
Corporation; an officer and/or director
of various subsidiaries of the
Corporation. Mr. Greene also serves as
a member of the Audit/Compensation
Committee of the Corporation's Board
of Directors.
-15-
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - continued
- ------- --------------------------------------------------

Abigail Q. McCarthy 78 Author, lecturer, columnist, 1970
educational consultant. Mrs. McCarthy
was Founding President of the
Washington Clearing House on Women's
Issues and is on The Advisory Board of
the Washington Independent Writers.

Julian M. Smerling 65 Vice Chairman of the Board of the 1980
Corporation since October 1981,
formerly Senior Vice President of the
Corporation; Executive Vice President
and a Director of Service Corporation.
Mr. Smerling also serves as a member
of the Executive Investment Committee
of the Corporation's Board of Directors.

Howard Stein 67 Chairman of the Board and Chief 1965
Executive Officer of the Corporation;
Chairman of the Board of Service
Corporation; an officer and/or director,
trustee or managing general partner of
various of the investment companies
managed by the Corporation. Mr. Stein
is a Director of Avnet, Inc. and a
Trustee of Corporate Property Investors.
He also serves as a member of the
Executive Investment Committee of the
Corporation's Board of Directors.

David B. Truman 80 Educational Consultant; past President 1965
of the Russell Sage Foundation, a
social science research organization;
President of Mount Holyoke College
from July 1969 to June 1978. Mr. Truman
is also a member of the Audit/Compensation
Committee of the Corporation's Board of
Directors.

Identification of Executive Officers
- ------------------------------------

The following table lists the names, ages (at December 31, 1993),
dates first elected as officers of the Corporation in the positions
stated, and principal occupations and employment during the past five
years of each of the Corporation's executive officers. All officers are
elected to terms of office for one year.

Name Age Principal Occupation or Employment
- ---- --- ----------------------------------

Howard Stein 67 Chairman of the Board and Chief Executive
Officer since December 1970; President from
January 1980 to October 1982; Chairman of the
Board of Service Corporation since February 1983
and Director since February 1968; Chairman of
the Board of The Dreyfus Fund since February
1970, Director since May 1965, President from
May 1965 to June 1984 and Investment Officer
since 1960; also, an officer, director, trustee
and/or managing general partner of various other
companies sponsored by, or affiliated with, the
Corporation.

-16-
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - continued
- ------- --------------------------------------------------

Julian M. Smerling 65 Vice Chairman of the Board since October 1981;
Director since January 1980; Senior Vice
President from December 1975 to October 1981;
Director of Service Corporation since February
1968; Executive Vice President of Service
Corporation; also, an officer and/or director of
other companies affiliated with the Corporation.

Joseph S. DiMartino 50 President and Chief Operating Officer since
October 1982 and Director since June 1982;
Executive Vice President from October 1981 to
October 1982; Senior Vice President from
September 1979 to October 1981; Director of
Service Corporation since April 1973; Executive
Vice President of Service Corporation;
President, Director and Investment Officer of
Dreyfus Liquid Assets and other money market
mutual funds; also, an officer, director and/or
trustee of various other companies sponsored by,
or affiliated with, the Corporation.

David W. Burke 57 Vice President and Chief Administrative Officer
since October 1990; Vice President and Director
of The Dreyfus Trust Co. (N.Y.); President of
CBS News, a division of CBS, Inc., from August
1988 to September 1990; Executive Vice President
of ABC News, a division of Capital Cities/ABC,
from May 1986 to August 1988, and Vice
President-Planning and Assistant to the
President of ABC News from August 1977 to May
1986.

Alan M. Eisner 54 Vice President and Chief Financial Officer since
April 1981; an officer and/or director of other
companies affiliated with the Corporation.

Daniel C. Maclean 51 Vice President since December 1982 and General
Counsel since March 1978; Secretary from October
1977 to December 1982; Secretary of Service
Corporation since October 1977; also, an officer
and/or director of other companies sponsored by,
or affiliated with, the Corporation.

Robert F. Dubuss 58 Vice President since March 1983; Assistant Vice
President from July 1973 to March 1983;
Treasurer of Service Corporation since September
1979; Assistant Treasurer of The Dreyfus Fund,
Inc. since April 1969; also, an officer and/or
director of other companies affiliated with the
Corporation.

-17-
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - continued
- ------- --------------------------------------------------

Elie M. Genadry 49 Vice President - Institutional Sales since June,
1989; President of the Institutional Services
Division of Service Corporation since February
1987 and Executive Vice President of Service
Corporation since September 1983; Vice
President-Institutional Operations of Service
Corporation from October 1979 to September 1983;
Interim President of the Group Retirement Plans
Division of Service Corporation from November
1991 to August 1992 and President since August
1992; and Interim President of the Broker/Dealer
Division of Service Corporation from January
1992 to May 1992 and President since May 1992.
Also, an officer of other investment companies
advised or administered by the Corporation.

Jeffrey N. Nachman 43 Vice President - Mutual Fund Accounting since
June 1989; Co-Manager of the Corporation's
Mutual Fund Operations Department from November
1987 through June 1989 and Assistant Manager of
the Mutual Fund Operations Department from July
1973 through November 1987. Also, an officer of
other investment companies advised or
administered by the Corporation.

Peter A. Santoriello 46 Vice President since December 1982; Director and
President of Dreyfus Management, Inc. since
December 1977; President and Director of Dreyfus
Balanced Fund, Inc. since June 1992.

Robert H. Schmidt* 57 Vice President since January 1991; President and
Director of Service Corporation and of Seven Six
Seven Agency, Inc. since January 1991; Chairman
and Chief Executive Officer of Levine, Huntley,
Schmidt & Beaver, an advertising agency, from
March 1972 to December 1990.

Kirk V. Stumpp 39 Vice President-New Product Development since
July 1993; Senior Vice President and Director of
Marketing for Service Corporation since 1986;
and Marketing Manager of Retail Products from
1982-1987.

Philip L. Toia 60 Vice President since August 1986; Director of
Fixed Income Research of the Corporation since
January 1991; an officer and/or director of
other companies affiliated with the Corporation;
Senior Vice President of The Chase Manhattan
Bank, N.A. and the Chase Manhattan Capital
Markets Corporation from 1979 to July 1986.

-18-
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - continued
- ------- --------------------------------------------------

Mark N. Jacobs 47 Secretary since December 1982; Deputy General
Counsel since January 1992, Associate General
Counsel from February 1983 to December 1991 and
Assistant General Counsel from June 1977 to
February 1983; also, an officer of other
companies sponsored by, or affiliated with, the
Corporation.

John J. Pyburn 58 Assistant Vice President since December 1983;
Manager of the Corporation's Mutual Fund
Operations Department from 1974 to June 1989;
also, an officer of other companies sponsored by
the Corporation.

Katherine C. Wickham 44 Assistant Vice President-Human Resources since
November 1989; Project Manager from September
1983 to October 1989; also, Vice President of
Dreyfus Consumer Life Insurance Company since
May 1984.

Maurice Bendrihem 42 Controller since July 1986; also, an officer of
other companies affiliated with the Corporation.

Christine Pavalos 61 Assistant Secretary since March 1972; Assistant
Secretary of Service Corporation since February
1968; Assistant Secretary of the Dreyfus Fund
since March 1973; also, an officer of other
companies affiliated with the Corporation.

* Mr. Schmidt and the Corporation are currently discussing an arrangement
pursuant to which Mr. Schmidt would cease to be an executive officer on
or prior to June 30, 1994 but would continue as a consultant through
October 31, 1994.

Business Experience
- -------------------

Included above under "Principal Occupation or Employment."

-19-
ITEM 11. EXECUTIVE COMPENSATION
- ------- ----------------------

The information given below sets forth the annual and long-term
compensation for services to the Corporation during the indicated fiscal
years of those person who were, as of December 31, 1993, (i) the Chief
Executive Officer, and (ii) the other four most highly compensated
officers of the Corporation.
<TABLE>
<CAPTION>

SUMMARY COMPENSATION TABLE

Long Term
Compensation
------------
Annual Compensation Awards
--------------------------------------- ------------

Securities
Name and Underlying
Principal Other Annual Options All Other
Position Year Salary Bonus Compensation (# of Shares) Compensation(2)
--------- ---- ------ ----- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Howard Stein 1993 $237,981 $1,517,066 -0- -0- $1,048,690
Chairman of the 1992 237,981 1,374,217 $1,131,694(1) -0- 916,049
Board and Chief 1991 237,981 995,631 -0- -0- 639,015
Executive Officer

Joseph S. DiMartino 1993 169,231 1,081,807 -0- -0- 959,592
President and 1992 169,231 979,942 -0- -0- 829,949
Chief Operating 1991 169,231 709,977 -0- -0- 621,187
Officer

Julian M. Smerling 1993 163,942 1,081,807 -0- -0- 964,613
Vice Chairman 1992 163,942 979,942 -0- -0- 867,105
of the Board 1991 163,942 709,977 -0- -0- 648,326

Robert H. Schmidt 1993 600,000 250,000 -0- -0- 150,000
Vice President 1992 600,000 250,000 -0- -0- 150,000
1991 600,000 250,000 -0- 50,000 150,000

David W. Burke 1993 500,000 200,000 -0- -0- 175,000
Vice President 1992 250,000 450,000 -0- -0- 175,000
and Chief 1991 250,000 250,000 -0- 50,000 125,000
Administrative
Officer

</TABLE>
1. The amount shown for Mr. Stein represents his exercise, during
1992, of options granted to him in 1982, and reflects the increase in the
Corporation's book value per share during the ten year period between the
grant and the exercise of such options.
-20-
ITEM 11. EXECUTIVE COMPENSATION - continued
- ------- ----------------------

2. The amounts shown in the "All Other Compensation" column for 1993
represent amounts paid to or accrued for the named individuals in
accordance with the Corporation's Retirement Profit-Sharing Plan ("RPSP"),
Deferred Compensation Plan ("DCP"), and/or Optional Incentive Payment Plan
("OIPP"), as follows: Howard Stein - $30,000 RPSP, $408,762 DCP, and
$609,928 OIPP; Joseph S. DiMartino - $30,000 RPSP, $282,759 DCP, and
$609,928 OIPP; Julian M. Smerling - $30,000 RPSP, $281,437 DCP, and
$653,176 OIPP; Robert H. Schmidt - $30,000 RPSP and $120,000 DCP; and
David W. Burke - $30,000 RPSP and $145,000 DCP. An amount of $36,905 is
also included for Mr. DiMartino, representing the dollar value of the
benefit to him of the premium paid by the Corporation during 1993 for the
non-term portion of a split-dollar life insurance policy covering Mr.
DiMartino and his wife.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

The information presented below relates to options previously
granted pursuant to either: (1) the Corporation's Incentive Stock Option
Plan, which was approved by stockholders in 1982 and expired as to the
grant of new options in 1992; or (2) the Corporation's 1989 Non-Qualified
Stock Option Plan, approved by stockholders in 1989. There were no
options granted to or exercised by the executive officers named below
during 1993.
<TABLE>
<CAPTION>

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at FY-End Options at FY-End
----------------- -----------------

Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Howard Stein 65,900 50,000 $1,194,764 $ 934,375

Joseph S. DiMartino 125,000 75,000 1,792,187 1,220,312

Julian M. Smerling 50,000 50,000 934,375 934,375

Robert H. Schmidt 12,500 37,500 139,844 419,531

David W. Burke 37,500 62,500 589,844 719,531
</TABLE>
-21-

ITEM 11. EXECUTIVE COMPENSATION - continued
- ------- ----------------------

PENSION PLAN TABLE
Years of Service
----------------------------------------------------------

Remuneration 15 20 25 30 35
- ------------ -- -- -- -- --

$125,000 $17,493 $23,325 $29,156 $34,987 $40,818

150,000 20,992 27,990 34,988 41,985 48,983

175,000 24,491 32,655 40,818 48,983 57,146

200,000 27,990 37,320 46,650 55,980 65,310

225,000 31,489 41,985 52,481 62,977 73,473

250,000 33,005 44,007 55,010 66,012 77,014

The above table shows the estimated annual pension benefits
payable under the Pension Plan at the normal retirement age of 65, subject
to limitations, if any, under the Internal Revenue Code, assuming payments
made on the normal straight life annuity basis and not under any of the
various survivor options. The benefits under the Pension Plan are not
reduced for Social Security or other benefits received by participants.

Remuneration covered by the plan consists of an employee's base
salary (limited by the Internal Revenue Code during 1993 to a maximum of
$235,840), and benefits are payable based on the average salary over the
final ten years of employment. The years of credited service to date of
the individuals listed in the Summary Compensation Table and their current
compensation covered by the Pension Plan are:

Howard Stein - 39 years, $235,840, Julian M. Smerling - 37 years,
$163,942, Joseph S. DiMartino - 23 years, $169,231, Robert H. Schmidt - 3
years, $235,840, and David W. Burke - 3 years, $235,840.

Compensation of Directors
- -------------------------

Directors who are also officers of the Corporation receive no
remuneration for their service as a Director or for their attendance at
Board Meetings. Each Director who is not an officer of the Corporation
receives a per annum fee of $20,000 in addition to a fee of $500
(increased to $1,000 effective October 14, 1993) for each Board Meeting
attended. Non-officer members of the Audit/Compensation and Executive
Investment Committees of the Board of Directors receive an attendance fee
of $500 for each Audit/Compensation or Executive Investment Committee
meeting attended.

Mr. Greene serves as a consultant to the Corporation principally
with respect to legal matters. He receives $75,000 on an annual basis
under his consulting agreement with the Corporation.
-22-

ITEM 11. EXECUTIVE COMPENSATION - continued
- ------- ----------------------

Termination of Employment and Change-In-Control Arrangements
- ------------------------------------------------------------

Contingent Benefit Plan - In 1984, the stockholders approved a
Contingent Benefit Plan (the "Plan") adopted in order to provide for
specified benefit payments to designated key employees of the Corporation
in the event of termination of their employment after a change of control
of the Corporation (defined as the acquisition of more than 25% of the
voting stock of the Corporation). Under the Plan, the Board of Directors
may grant the key employees a maximum aggregate of 1,500,000 Units, each
representing the difference between the book value of one share of common
stock of the Corporation and its market price, as defined. Each Unit
represents the obligation of the Corporation to pay its value, in cash, in
the event of termination of employment of the key employee, including
voluntary termination but excluding termination for cause, within a period
of two years following the change of control. As of December 31, 1993,
the individuals named in the Summary Compensation Table had been granted
the following numbers of Units pursuant to the Plan: Howard Stein -
165,000 Units, Joseph S. DiMartino - 165,000 Units, and Julian M. Smerling
- - 165,000 Units.

Supplemental Retirement Benefits - Pursuant to an agreement with
the Corporation, Julian M. Smerling will receive supplemental retirement
benefits of $500,000 per year, with a ten year certain payout. The
agreement provides for a lump-sum payment of the entire remaining amount
of such retirement benefits in the event of a change of control (as
defined) of the Corporation. See also Item 10 - "Directors and Executive
Officers of the Registrant."

Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------

The members of the Audit/Compensation Committee of the Board of
Directors are Alvin E. Friedman, Lawrence M. Greene and David B. Truman.
Mr. Greene was formerly an officer of the Corporation, and is currently an
officer of various subsidiaries of the Corporation, including Executive
Vice President of Service Corporation. Messrs. Friedman and Truman are
the sole members of the Executive Compensation Sub-Committee of the
Audit/Compensation Committee.

Merger Agreement
- ----------------

The Agreement and Plan of Merger between the Corporation and
Mellon described in Item 1 above contains provisions pursuant to which, if
the merger with Mellon is consummated, changes in and additions to the
Corporation's various employee benefits plans, agreements and programs
will be implemented. Certain of the Corporation's directors and executive
officers are participants in these plans, agreements and programs.

-23-
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------- --------------------------------------------------------------

The following stockholders owned beneficially more than 5% of the
Corporation's common stock issued and outstanding, according to filings
made with the SEC:

Name and Address Number of Shares Percentage
---------------- ---------------- ----------

Michael F. Price 1,894,900 as of 5.2%
Heine Securities Corporation December 14, 1993
51 John F. Kennedy Parkway
Short Hills, New Jersey

The Equitable Companies 2,097,900 as of 5.7%
Incorporated December 31, 1993
787 Seventh Avenue
New York, New York

The shares shown above for Michael F. Price and Heine Securities
Corporation ("HSC") are held by HSC, a registered investment adviser, on
behalf of its clients. Mr. Price is also listed as a beneficial owner of
such shares since as President of HSC he exercises voting control and
dispositive power over the securities held by HSC.

The shares shown above for The Equitable Companies Incorporated were
acquired for investment purposes by various of its subsidiaries, either
directly or on behalf of client discretionary investment advisory accounts.

The Depository Trust Company, central depository for the
securities industry, held of record 33,070,272 shares or 90.5% of the
Corporation's common stock issued and outstanding as of January 31, 1994.
The beneficial ownership of such shares is not readily determinable.

The following table represents shares of the Corporation's common
stock beneficially owned by the Directors, other named executive officers,
and all officers and Directors as a group, as of January 31, 1994.

Name Number of Shares(1) Percent of Total Outstanding
- ---- ---------------- ----------------------------

Mandell L. Berman 481,314 1.3%
Joseph S. DiMartino 158,441 .4%
Alvin E. Friedman 600 -
Lawrence M. Greene 35,000 .1%
Abigail Q. McCarthy 337 -
Julian M. Smerling 116,347 .3%
Howard Stein 1,204,661 3.3%
David B. Truman 1,000 -
Robert H. Schmidt 14,912 -
David W. Burke 39,729 .1%
All Directors and
Officers as a group 2,664,030 7.3%

- ----------------------

1. The shares shown above include those held for the benefit of
participants in the Corporation's Retirement Profit-Sharing Plan. It
is estimated that Messrs. DiMartino, Smerling, Stein, Schmidt and
Burke, and all officers of the Corporation as a group, had a
beneficial interest in
-24-
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- ------- ---------------------------------------------------
MANAGEMENT - continued
----------

33,441, 66,347, 178,361, 1,412, 2,226 and 603,557 of such shares,
respectively, as of January 31, 1994. The shares shown above for the
following individuals and group also includes those shares with respect
to which there exists the right to acquire beneficial ownership pursuant
to vested options, as follows: Joseph S. DiMartino - 125,000 shares,
Julian M. Smerling - 50,000 shares, Howard Stein - 65,900 shares,
Robert H. Schmidt - 12,500 shares, David W. Burke - 37,500 shares,
and all Directors and officers as a group - 525,575 shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------- ----------------------------------------------

Loans to Officers - Two officers of the Corporation received mortgage
loans from the Savings Bank during 1993, and a third officer remained as
guarantor for such a loan made to a relative in 1992. Such loans were
made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, and did not include more
than the normal risk of collectibility or present other unfavorable
features. In addition, the loans to the two officers were subsequently
sold in the secondary market, so that thereafter no indebtedness existed,
or exists, between such officers and the Savings Bank. See also Item
10 - "Directors and Executive Officers of the Registrant."

-25-
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
- ------- -----------------------------------------------------------
8-K
---

(a) (1) and (2)--The response to this portion of Item 14 is
submitted as a separate section of this report.

(3)--Listing of Exhibits:

2 Agreement and Plan of Merger with Mellon Bank
Corporation, Mellon Bank, N.A. and XYZ Sub
Corporation, a subsidiary of Mellon Bank.*

3.(i)(a) Articles of Incorporation, as amended, are
incorporated by reference to Exhibit 3(a)
filed as a part of the Corporation's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1983.

3.(i)(b) Certificate of Amendment to Articles of
Incorporation effective as of June 16, 1986,
is incorporated by reference to Exhibit
3(a)(ii) filed as part of the Corporation's
Annual Report on Form 10-K for the fiscal
year ended December 31, 1986.

3.(i)(c) Certificate of Amendment to Articles of
Incorporation effective as of June 16, 1987
is incorporated by reference to Exhibit
3(a)(ii) filed as part of The Corporation's
Annual Report on Form 10-K for the fiscal
year ended December 31, 1987.

3.(i)(d) Certificate of Amendment to Articles of
Incorporation effective as of June 27, 1988
is incorporated by reference to Exhibit
3(a)(ii) filed as part of the Corporation's
Annual Report on Form 10-K for the fiscal
year ended December 31, 1988.

3.(ii)(a) By-laws, as amended, are incorporated by
reference to Exhibit 3(b) filed as a part of
the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1984.

3.(ii)(b) Amendments to By-laws occurring from July 25,
1984 through March 3, 1988 are incorporated
by reference to Exhibit 3(b)(ii) filed as a
part of the Corporation's Annual Report on
Form 10-K for the fiscal year ended December
31, 1988.

*Omitted from filing of this Report and filed separately with the Securities
and Exchange Commission.
-26-
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
- ------- -----------------------------------------------------------
8-K --Continued
---

10. Material Contracts

10.(iii)(A)(a) Agreement with respect to supplemental
retirement benefits is incorporated by
reference to Exhibit 10(ii)(A) filed as a
part of the Corporations' Annual Report on
Form 10-K for the fiscal year ended December
31, 1989.

10.(iii)(A)(b) Amended Deferred Compensation Plan is
incorporated by reference to Exhibit
10(iii)(A) filed as a part of the
Corporations' Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.

10.(iii)(A)(c) An Incentive Stock Option Plan approved by
shareholders in 1982 is incorporated by
reference to the Corporation's proxy
material for its 1982 Annual Meeting.

10.(iii)(A)(d) A Contingent Benefit Plan approved by
shareholders in 1984 is incorporated by
reference to the Corporation's proxy material
for its 1984 Annual Meeting.

10.(iii)(A)(e) Optional Incentive Payment Plan is
incorporated
by reference to Exhibit 10(iii)(A) filed as a
part of the Corporation's Annual Report on
Form 10-K for the fiscal year ended December
31, 1986.

10.(iii)(A)(f) 1989 Non-Qualified Stock Option Plan approved
by shareholders in 1989 is incorporated by
reference to the Corporation's proxy material
for its 1989 Annual Meeting.

10.(iii)(A)(g) Agreement relating to split-dollar life
insurance policy covering Joseph S. DiMartino
and his wife.**

10.(iii)(A)(h) Consulting Agreement with Lawrence M.
Greene.**

11. Computation of Earnings Per Share of Common Stock.
13. Annual Report to Stockholders for the year ended
December 31, 1993.
21. Subsidiaries of the Registrant.
23. Consent of Independent Auditors.

(b) Reports on Form 8-K filed in the fourth quarter of 1993:

On December 7, 1993 the Corporation filed a Report on
Form 8-K describing the Corporation's announcement of
its execution of an Agreement and Plan of Merger with
Mellon Bank Corporation.

**Included in filing with the Securities and Exchange Commission
only.
-27-
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
- ------- -------------------------------------------
REPORTS ON FORM 8-K
-------------------

EXHIBIT 11 -- COMPUTATION OF EARNINGS PER SHARE --
THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------
1993 1992 1991
------- ------- -------
(000's Omitted, Except Per Share Data)

Basis for computation of earnings per
common share and primary earnings
per common share:
<S> <C> <C> <C>
Net Income (1) $99,411 $91,171 $67,910

Dividend equivalents and related
interest on unexercised incentive
stock options (net of taxes) 179 146 185
------- ------- -------

Net Income as adjusted (2) $99,590 $91,317 $68,095
======= ======= =======

Weighted average number of shares
outstanding:

Weighted average number of shares
outstanding during the
period (3) 36,786 37,965 38,330

Net effect of dilutive stock options-based
on the treasury stock method using
the average value 566 656 501
------- ------- -------

Total (4) 37,352 38,621 38,831
======= ======= =======

EARNINGS PER SHARE:

No Dilution (1)/(3)=(5) $2.70 $2.40 $1.77
======= ======= =======

Primary (a) (2)/(4)=(6) $2.67 $2.36 $1.75
======= ======= =======

(Continued on following page)
</TABLE>
-28-
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
- ----------------------------------------------------
REPORTS ON FORM 8-K--
---------------------

EXHIBIT 11 -- COMPUTATION OF EARNINGS PER SHARE --
THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES
(CONTINUED)
<TABLE>
<CAPTION>
Year ended December 31,

1993 1992 1991
------- ------- -------
(000's Omitted, Except Per Share Data)
Basis for computation of earnings per
common share assuming full dilution:
<S> <C> <C> <C>
Net Income $99,411 $91,171 $67,910

Dividend equivalents and related
interest on unexercised incentive
stock options (net of taxes) 179 146 185
------- ------- -------

Net Income as adjusted (7) $99,590 $91,317 $68,095
======= ======= =======

Weighted average number of shares
outstanding:

Weighted average number of shares
outstanding during the
period 36,786 37,965 38,330

Net effect of dilutive stock options-based
on the treasury stock method using the
higher of the period end or average value 622 664 695
------- ------- -------

Total (8) 37,408 38,629 39,025
======= ======= =======

Fully Diluted Earnings Per
Share (a): (7)/(8)=(9) $2.66 $2.36 $1.74
======= ======= =======

Note: (a) The earnings per share data shown on lines 6 and 9 above are not presented in the
consolidated statements of income included in the annual report to stockholders,
which are incorporated by reference in Item 8, since the dilution from the earnings
per share amounts presented in such statements is less than 3%.
</TABLE>

-29-
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
- ------- -----------------------------------------------------------
8-K--Continued
---

Exhibit 13 - Annual Report to Stockholders for the year ended
December 31, 1993. (Pages 54 through 73)

-30-
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
- ------- -----------------------------------------------------------
8-K--Continued
---

(c) Exhibits--Continued
Exhibit 21--Subsidiaries of the Registrant
State of Date of
Incorporation Incorporation
------------- -------------

The Dreyfus Corporation New York 1947

Subsidiaries of The Dreyfus Corporation(1)
---------------------------------------

Dreyfus Service Corporation New York 1968

Dreyfus Management, Inc. New York 1970

Dreyfus Personal Management, Inc.(2) New York 1983

Dreyfus Consumer Life Insurance Company Connecticut 1981

The Dreyfus Security Savings Bank, F.S.B.(3) New Jersey 1970

Dreyfus Thrift & Commerce(4) Utah 1987

Dreyfus Realty Advisors, Inc.(5) Delaware 1986

The Dreyfus Trust Company(6) New York 1984

The Dreyfus Consumer Credit Corporation Delaware 1983

Lion Management, Inc.(7) Delaware 1988

Dreyfus Acquisition Corporation New York 1974

(1) The names of certain subsidiaries of the Corporation have been
omitted because, considered in the aggregate as a single subsidiary,
they would not constitute a significant subsidiary. Except as
noted, all of the above listed subsidiaries are wholly-owned by the
Corporation, except for directors' qualifying shares.
(2) This subsidiary discontinued operations as of June 30, 1993.
(3) The stock of this subsidiary is held as the sole asset of a
separate, wholly-owned subsidiary of the Corporation,
Dreyfus-Lincoln, Inc., which was incorporated in New Jersey in 1983.
(4) The stock of this subsidiary is held as an asset of a separate,
wholly-owned subsidiary of the Corporation, The Dreyfus Holding
Corporation, which was incorporated in Delaware in 1982.
(5) The stock of this subsidiary is held as an asset of a separate,
wholly-owned subsidiary of the Corporation, Dreyfus Service
Organization, Inc., which was incorporated in Delaware in 1971.
(6) The stock of this subsidiary is held as an asset of a separate,
wholly-owned subsidiary of the Corporation, Dreyfus Garden City,
Inc., which was incorporated in Delaware in 1984.
(7) The stock of this subsidiary is held as an asset of Service
Corporation.
-31-
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
- ------- -----------------------------------------------------------
8-K--Continued
---

Exhibit 23--Consent of Independent Auditors

-32-

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Pre-Effective
Amendment No. 4 to Registration Statement No. 33-37606 on Form
S-3 dated August 30, 1991, Post-Effective Amendment No. 15 to
Registration Statement No. 2-41530 on Form S-8 dated April 30,
1984, Post-Effective Amendment No. 12 to Registration Statement
No. 2-47970 on Form S-3 dated April 30, 1984, Post-Effective
Amendment No. 14 to Registration Statement No. 2-42821 on Form S-3
dated April 30, 1984, and in Post-Effective Amendment No. 11 to
Registration Statement No. 2-50996 on Form S-3 dated April 30, 1984
of our report dated January 27, 1994, with respect to the
consolidated financial statements and schedules of The Dreyfus
Corporation, included in the Annual Report (Form 10-K) for the year
ended December 31, 1993.

/s/ ERNST & YOUNG

New York, New York
March 25, 1994

-33-

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
- ------- -----------------------------------------------------------
8-K--Continued
---

(d) Financial Statement Schedules--The response to
this portion of Item 14 is submitted as a
separate section of this report.

-34-
SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report on
Form 10-K for the fiscal year ended December 31, 1993, to be signed on
its behalf by the undersigned, thereunto duly authorized.

THE DREYFUS CORPORATION
-----------------------

Principal Executive Officer
---------------------------

/s/ Howard Stein
----------------------------
Howard Stein

Principal Financial Officer
---------------------------

/s/ Alan M. Eisner
----------------------------
Alan M. Eisner

Principal Accounting Officer
----------------------------

/s/ Maurice Bendrihem
----------------------------
Maurice Bendrihem

Dated: March 30, 1994
-35-
SIGNATURES OF DIRECTORS
-----------------------

/s/ Mandell L. Berman /s/ Abigail McCarthy
-------------------------- -------------------------
Mandell L. Berman Abigail McCarthy

/s/ Joseph S. DiMartino /s/ Julian Smerling
-------------------------- -------------------------
Joseph S. DiMartino Julian Smerling

/s/ Alvin E. Friedman /s/ Howard Stein
-------------------------- --------------------------
Alvin E. Friedman Howard Stein

/s/ Lawrence M. Greene /s/ David B. Truman
-------------------------- --------------------------
Lawrence M. Greene David B. Truman

Dated: March 30, 1994

-36-
ANNUAL REPORT ON FORM 10-K

ITEM 14(a) (1) AND (2) AND ITEM 14(d)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

YEAR ENDED DECEMBER 31, 1993

THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES

The following consolidated financial statements of The Dreyfus Corporation
and subsidiary companies are included in Item 8:
Page In
Form 10-K
-------------

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . 38

Consolidated statements of income--years ended
December 31, 1993, 1992 and 1991 . . . . . . . . . . . . . . . . . . . 39

Consolidated balance sheets--December 31, 1993 and
December 31, 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . 40-41

Consolidated statements of changes in Stockholders' Equity--
years ended December 31, 1993, 1992 and 1991 . . . . . . . . . . . . . 42

Consolidated statements of cash flows--years ended December 31,
1993, 1992 and 1991. . . . . . . . . . . . . . . . . . . . . . . . . . 43

Notes to consolidated financial statements . . . . . . . . . . . . . . . 44-49

The following consolidated financial statement schedules of The Dreyfus
Corporation and subsidiary companies are included in Item 14(d):
Page In
Form 10-K
---------

Schedule I -- Marketable securities--other investments. . . . . . . . 50-52
Schedule X -- Supplementary income statement information. . . . . . . 53

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.

Financial statements of subsidiaries not consolidated and 50% or less
owned persons accounted for by the equity method have been omitted because
they do not meet the requirements of Rule 3-09(a) of Regulation S-X.
-37-

Report of Independent Auditors

Stockholders and Board of Directors
The Dreyfus Corporation

We have audited the accompanying consolidated balance sheets of The
Dreyfus Corporation and Subsidiary Companies as of December 31,
1993 and 1992, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in
the period ended December 31, 1993. Our audits also included the
financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of
the Corporation's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of The Dreyfus Corporation and Subsidiary
Companies at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity
with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedules, when considered
in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.

/s/ ERNST & YOUNG

New York, New York
January 27, 1994, except for Note 14,
as to which the date is March 23, 1994

-38-

Page>
The Dreyfus Corporation and Subsidiary Companies

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES:
Management, investment advisory and
administrative fees (net)--Note 13...... $297,472,000 $273,603,000 $220,213,000
Interest and dividends..................... 24,219,000 30,559,000 41,270,000
Underwriting and other fees (net)--Note 4.. 21,653,000 15,182,000 7,603,000
Net gains on investment transactions--
Notes 1 and 2........................... 25,193,000 7,128,000 590,000
Other (net)--Note 10....................... 17,491,000 15,975,000 12,630,000
------------ ------------ ------------
Total Revenues........................ 386,028,000 342,447,000 282,306,000
------------ ------------ ------------
EXPENSES--NOTE 13:
Salaries................................... 85,970,000 73,881,000 65,614,000
Advertising and other direct selling
expenses................................ 62,529,000 56,149,000 49,888,000
Other selling, general and administrative
expenses................................ 77,909,000 70,400,000 61,069,000
Interest................................... 1,309,000 2,346,000 4,125,000
------------ ------------ ------------
Total Expenses........................ 227,717,000 202,776,000 180,696,000
------------ ------------ ------------
Income before taxes based on income.......... 158,311,000 139,671,000 101,610,000
------------ ------------ ------------
Provision for taxes based on income--Note 8:
Federal................................. 47,400,000 38,700,000 27,200,000
State and Local......................... 11,500,000 9,800,000 6,500,000
------------ ------------ ------------
58,900,000 48,500,000 33,700,000
------------ ------------ ------------
NET INCOME................................... $ 99,411,000 $ 91,171,000 $ 67,910,000
============ ============ ============

Net Income per share of common stock......... $2.70 $2.40 $1.77
===== ===== =====
Weighted average numbers of shares
outstanding during the year................ 36,786,000 37,965,000 38,330,000
============ ============= ===========
</TABLE>

See notes to consolidated financial statements.

-39-

<PAGE>
The Dreyfus Corporation and Subsidiary Companies

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
ASSETS 1993 1992
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents--primarily shares of sponsored
money market investment companies....................... $301,277,000 $216,360,000
Receivables:
For management, investment advisory and administrative
fees................................................. 23,114,000 22,316,000
From brokers and dealers................................ 12,745,000 5,101,000
Interest, dividends and other receivables............... 14,255,000 15,755,000
------------ ------------
Total Receivables.................................... 50,114,000 43,172,000
------------ ------------
Investments in marketable securities--Notes 1 and 2:
Marketable equity securities--including $9,026,000 in
1993 pledged as collateral in connection with
securities transactions.............................. 183,968,000 269,707,000
Other marketable securities--principally at cost, which
approximates market.................................. 147,763,000 227,933,000
------------ ------------
Total Investments in marketable securities........... 331,731,000 497,640,000
------------ ------------
Other investments (fair value--$175,862,000 in 1993 and
$56,293,000 in 1992)--Notes 1 and 2..................... 133,923,000 53,895,000
Fixed assets--at cost, less accumulated depreciation and
amortization--Note 3.................................... 62,643,000 50,725,000
Other assets, including prepaid and deferred charges of
$20,026,000 in 1993 and $4,086,000 in 1992--Note 4...... 34,900,000 10,829,000
------------ ------------
TOTAL ASSETS......................................... $914,588,000 $872,621,000
============ ============
</TABLE>

-40-

<PAGE>

<TABLE>
<CAPTION>
December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES:
Short positions in marketable equity securities--
Notes 1 and 2...................................... $ 7,915,000 $ 1,441,000
Due to brokers and dealers............................ 386,000 4,190,000
Banking customer deposits (fair value--$26,525,000 in
1993 and $35,044,000 in 1992)--Note 1.............. 26,519,000 35,192,000
Taxes, including Federal income taxes payable of
$5,965,000 in 1992--Note 8......................... 4,318,000 10,096,000
Accrued compensation and benefits..................... 17,756,000 14,546,000
Sundry liabilities and accrued expenses............... 33,105,000 27,618,000
------------ ------------
TOTAL LIABILITIES.................................. 89,999,000 93,083,000
------------ ------------
STOCKHOLDERS' EQUITY--NOTES 2, 5 AND 6:
Common stock--par value $.10 per share (50,000,000
shares authorized), shares issued--44,973,000 in
1993 and 1992...................................... 4,497,000 4,497,000
Additional paid-in capital............................ 279,576,000 278,728,000
Retained earnings..................................... 731,188,000 659,012,000
-------------- ------------
1,015,261,000 942,237,000
Less:
Treasury stock--at cost, 8,417,000 shares in 1993
and 7,486,000 shares in 1992..................... 190,524,000 154,943,000
Net unrealized loss on marketable equity
securities....................................... -- 7,560,000
Notes receivable for common stock issued........... 148,000 196,000
-------------- ------------
TOTAL STOCKHOLDERS' EQUITY......................... 824,589,000 779,538,000
COMMITMENTS, CONTINGENCIES AND OTHER MATTERS--
NOTES 6, 7, 9, 11, 12, 13 AND 14
-------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......... $ 914,588,000 $872,621,000
============== ============
</TABLE>

See notes to consolidated financial statements.

-41-

<PAGE>
The Dreyfus Corporation and Subsidiary Companies

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NOTES
NET UNREALIZED RECEIVABLE
ADDITIONAL (LOSS) FOR COMMON TOTAL
COMMON PAID-IN RETAINED TREASURY ON MARKETABLE STOCK STOCKHOLDERS'
STOCK CAPITAL EARNINGS STOCK EQUITY SECURITIES ISSUED EQUITY
---------- ------------ ------------ ------------- ----------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1990......... $4,497,000 $276,842,000 $544,126,000 ($122,239,000) ($ 26,026,000) ($217,000 ) $ 676,983,000
Net Income... 67,910,000 67,910,000
Cash
Dividends
on
Common
Stock
($.52 per
share)..... (19,932,000) (19,932,000)
Reduction in
net
unrealized
loss on
marketable
equity
securities... 17,397,000 17,397,000
Purchase of
treasury
stock
(44,000
shares).... (780,000) 258,000 (522,000)
Issuance of
treasury
stock
(28,000
shares).... 212,000 27,000 (239,000 ) --
Other........ 70,000 2,000 72,000
---------- ------------ ------------ ------------- ----------------- ---------- -------------
Balance at
December 31,
1991......... 4,497,000 277,124,000 592,104,000 (122,992,000) (8,629,000) (196,000 ) 741,908,000
Net Income... 91,171,000 91,171,000
Cash
Dividends
on
Common
Stock
($.64 per
share)..... (24,263,000) (24,263,000)
Reduction in
net
unrealized
loss on
marketable
equity
securities... 1,069,000 1,069,000
Purchase of
treasury
stock
(946,000
shares).... (32,054,000) 78,000 (31,976,000)
Issuance of
treasury
stock
(108,000
shares).... 1,036,000 103,000 (678,000 ) 461,000
Other........ 568,000 600,000 1,168,000
---------- ------------ ------------ ------------- ----------------- ---------- -------------
Balance at
December 31,
1992......... 4,497,000 278,728,000 659,012,000 (154,943,000) (7,560,000) (196,000 ) 779,538,000
Net Income... 99,411,000 99,411,000
Cash
Dividends
on
Common
Stock
($.74 per
share)..... (27,235,000) (27,235,000)
Reduction in
net
unrealized
loss on
marketable
equity
securities... 7,560,000
7,560,000 Purchase of
treasury
stock
(958,000
shares).... (35,604,000) 367,000 (35,237,000)
Issuance of
treasury
stock
(27,000
shares).... 479,000 23,000 (319,000 ) 183,000
Other........ 369,000 369,000
---------- ------------ ------------ ------------- ----------------- ---------- -------------
Balance at
December 31,
1993......... $4,497,000 $279,576,000 $731,188,000 ($190,524,000) $ -- ($148,000 ) $ 824,589,000
========== ============ ============ ============== ================= =========== =============
</TABLE>
-42-

<PAGE>
The Dreyfus Corporation and Subsidiary Companies
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------
1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income...................................................... $ 99,411,000 $ 91,171,000 $ 67,910,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization............................... 9,771,000 7,747,000 6,746,000
Amortization of deferred sales commissions.................. 1,242,000 -- --
Deferred taxes.............................................. (1,011,000) (3,469,000) 3,252,000
Net gains on investment transactions included in investing
activities (net of amortized security discounts and
premiums)................................................. (24,522,000) (8,346,000) (4,307,000)
Other items................................................. (748,000) 1,776,000 1,473,000
Changes in operating assets and liabilities:
Decrease in receivable for management fees................ (1,547,000) (3,566,000) (7,076,000)
(Increase) decrease in other receivables.................. (1,641,000) (443,000) 5,709,000
(Increase) decrease in mortgage loans held for resale..... (5,964,000) 1,559,000 (1,998,000)
(Increase) decrease in other assets....................... (18,175,000) (610,000) 523,000
Increase in accrued compensation and benefits............. 3,210,000 1,341,000 4,152,000
Increase (decrease) in taxes payable...................... (7,509,000) 3,853,000 (7,343,000)
Increase in sundry liabilities and accrued expenses....... 13,637,000 3,718,000 2,404,000
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 66,154,000 94,731,000 71,445,000
------------ ------------ ------------
INVESTING ACTIVITIES
Proceeds from sales of securities............................... 829,812,000 533,633,000 542,422,000
Purchases of securities......................................... (621,822,000) (563,629,000) (535,029,000)
Decrease (increase) in banking customer loans................... 217,000 (697,000) 303,000
Decrease (increase) in other investments........................ (105,651,000) 4,553,000 (29,795,000)
Acquisition of fixed assets..................................... (21,693,000) (10,995,000) (3,550,000)
Sale of Insurance company subsidiary............................ 11,733,000 -- --
Other investing activities...................................... 718,000 (3,233,000) 546,000
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES......... 93,314,000 (40,368,000) (25,103,000)
------------ ------------ ------------
FINANCING ACTIVITIES
Purchase of treasury stock...................................... (35,237,000) (30,209,000) (522,000)
Dividends paid.................................................. (27,235,000) (24,263,000) (19,932,000)
Decrease in banking customer deposits........................... (8,673,000) (12,526,000) (10,655,000)
Other financing activities...................................... (3,406,000) 1,108,000 (2,399,000)
------------ ------------ ------------
NET CASH USED IN FINANCING ACTIVITIES....................... (74,551,000) (65,890,000) (33,508,000)
------------ ------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ 84,917,000 (11,527,000) 12,834,000
Cash and cash equivalents at beginning of year.............. 216,360,000 227,887,000 215,053,000
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................... $301,277,000 $216,360,000 $227,887,000
============ ============ ============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes.................................................... $ 68,036,000 $ 48,498,000 $ 37,427,000
Interest........................................................ 1,024,000 2,146,000 3,782,000
</TABLE>

See notes to consolidated financial statements.

-43-

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:

Nature of Business:

The Dreyfus Corporation ("Corporation") and Subsidiary Companies comprise a
financial service organization whose primary business consists of providing
investment management services as the investment adviser, manager and
distributer for sponsored investment companies and as an investment adviser to
other accounts. In addition, the Corporation is the sub-investment adviser
and/or admistrator of several investment companies sponsored by others.

Principles of Consolidation:

The consolidated financial statements include the accounts of the Corporation
and its subsidiaries. All significant intercompany accounts and transactions
were eliminated in consolidation.

Income Recognition:

Management, investment advisory and administrative fees are reported net of
expense reimbursements to certain funds. Transactions in investment securities
are recorded on a trade date basis. Net realized gains or losses resulting from
the sale of investments are recorded on the identified cost basis and included
in operations. Declines in value of investments which are accounted for as
"other than temporary" are charged to operations. Certain prior year amounts
have been reclassified to conform to the current year's presentation.

Fair Value of Financial Instruments:

The following methods and assumptions were used by the Corporation in
estimating its fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance sheet
for cash and cash equivalents approximates fair value.
Marketable securities: The fair value of the Corporation's marketable
securities portfolios are based on quoted market prices or dealer quotes.
Other investments: The fair value of certain limited partnerships engaged in
securities trading, which are accounted for at cost, is based on quoted market
prices of the respective partnerships' underlying securities portfolios.
Financial instruments with off-balance sheet risk: The fair value of the
Corporation's financial instruments with off-balance sheet risk is based on
quoted market prices or dealer quotes.
Banking customer deposits: The fair value of fixed-maturity certificates of
deposit are estimated using a discounted cash flow calculation that applies
interest rates currently offered for deposits of similar remaining maturities to
a schedule of aggregated expected monthly maturities on time deposits. The fair
value for demand deposits, savings accounts and money market bank accounts are
equal to the amounts payable on demand at the reporting date.

NOTE 2 -- INVESTMENTS:

Marketable Equity Securities:

The Corporation, excluding Dreyfus Service Corporation ("Service
Corporation"), carries its marketable equity securities portfolio at cost (long
positions) or proceeds (short positions) if the portfolio has an aggregate net
unrealized gain, or at market if the portfolio has an aggregate net unrealized
loss. It is the Corporation's policy to charge aggregate net unrealized losses
on the marketable equity securities portfolio to Stockholders' Equity; aggregate
net unrealized gains on the marketable equity securities portfolio are not
recognized, except to the extent of aggregate net unrealized losses previously
recognized. The Corporation engages in short selling which obligates the
Corporation to replace the security borrowed by purchasing the identical
security at its then current market value. Service Corporation, a wholly-owned
broker-dealer subsidiary of the Corporation, carries its securities at market
value, in accordance with the practice in the brokerage industry.
At December 31, 1993, the Corporation's marketable equity securities portfolio
had an aggregate net unrealized gain amounting to $6,060,000. Gross unrealized
gains and losses on such securities amounted to $10,820,000 and $4,760,000,
respectively. The Corporation's aggregate long positions in the marketable
equity securities portfolio were carried at cost of $183,968,000 (fair value -
$190,138,000) and the aggregate short positions in the marketable equity
securities portfolio were carried at proceeds of $7,915,000 (fair value
- -$8,025,000).
At December 31, 1992, the Corporation's aggregate long positions in the
marketable equity securities portfolio were carried at market of $269,707,000
(cost - $280,908,000) and the aggregate short positions in the marketable equity
securities portfolio were carried at market of $1,441,000 (proceeds
- -$1,187,000).
In 1993, the Corporation charged operations for $10.8 million in connection
with "other than temporary" declines in the value of marketable equity
securities.

-44-

<PAGE>
Other Marketable Securities:

The Corporation (excluding Service Corporation) carries its other marketable
securities, consisting primarily of Municipal and U.S. Government obligations,
at cost. In addition, the Corporation carries its investments in options to
purchase certain securities, designated as trading securities, at market; net
unrealized gains and losses thereon are included in operations.

Other Investments:

Other investments consist of investments in non-readily marketable limited
partnerships and non-readily marketable securities. In 1993 and 1992, the
Corporation recorded a charge to operations of $4.1 million and $8 million,
respectively, in connection with "other than temporary" declines in the value of
such investments.

Financial Instruments with Off-Balance Sheet Risk:

The Corporation is a party to financial instruments with off-balance sheet
risk. These financial instruments include futures contracts, forward contracts
and options written. The Corporation enters into these transactions as part of
its trading activities, as well as to reduce its own exposure to market risk in
connection with its positions in certain sponsored index funds.
Off-balance sheet financial instruments and commodity futures contracts
involve varying degrees of market and credit risk that exceed the amounts
recognized on the balance sheet. The estimated fair values for such financial
instruments and commodity futures contracts with contract or notional principal
amounts that exceed the amount of credit risk at December 31, 1993 are
summarized below (000's omitted):

<TABLE>
<CAPTION>
Contract or
Notional Fair
Principal Value of
Amount Contracts
----------- ---------
<S> <C> <C>
Long Positions in aluminum and
oil commodity futures, Feb.
and Mar. 1994................. $ 6,603 $ 13
Short Positions in Japanese yen
forward contracts, Feb.
1994.......................... 10,011 219
Short Positions in S&P Index
futures contracts, Mar.
1994.......................... 5,835 (2)
S&P Index, option contracts
written....................... 178 (241)
</TABLE>

Futures and forward contracts represent future commitments to purchase or sell
a specified instrument at a specified price and date. Futures contracts are
standardized and are traded on regulated exchanges, while forward contracts are
traded in over-the-counter markets and generally do not have standardized terms.
The Corporation uses futures and forward contracts in connection with its
trading activities.
For instruments that are traded on a regulated exchange, the exchange assumes
the credit risk that a counter party will not settle and generally requires a
margin deposit of cash or securities as collateral to minimize potential credit
risk. Credit risk associated with futures and forward contracts is limited to
the estimated aggregate replacement cost of those futures and forward contracts
in a gain position and was not material at December 31, 1993. Credit risk
related to futures contracts is substantially mitigated by daily cash
settlements with the exchanges for the net change in futures contract value.
Market risk arises from movements in securities values, foreign exchange rates
and interest rates.
Option contracts grant the contract "purchaser" the right, but not the
obligation, to purchase or sell a specified amount of a financial instrument
during a specified period at a predetermined price. The Corporation acts as both
"purchaser" and "seller" of option contracts, which are used in reducing
exposure to market risk in connection with its positions in certain sponsored
index funds. Market risk arises from changes in market value of contractual
positions due to movements in underlying securities or stock indices. The
Corporation limits its exposure to market risk by entering into hedge positions.
Credit risk relates to the ability of the Corporation's counter party to meet
its settlement obligations under the contract and generally is limited to the
estimated aggregate replacement cost of those contracts in a gain position and
was not material at December 31, 1993.

Accounting for Certain Investments in Debt and Equity Securities:

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", which is effective for investments held as of or
acquired after January 1, 1994. In the first quarter of 1994, the Corporation
intends to adopt the provisions of the new standard, which are not expected to
have a material impact on the results of operations or financial condition of
the Corporation.

NOTE 3 -- FIXED ASSETS:

The Corporation and its subsidiaries provide for depreciation on fixed assets
(including licensed and certain internally developed computer software) based on
the estimated useful life of the assets, using the straight line method.
Amortization of leasehold improvements is computed over the respective terms of
the leases.

-45-

<PAGE>
The major classifications of fixed assets are as follows (000's omitted):

<TABLE>
<CAPTION>
1993 1992
------- -------
<S> <C> <C>
Furniture, fixtures and
equipment....................... $50,568 $40,100
Leasehold improvements............ 30,695 27,261
Licensed and certain internally
developed computer software..... 11,375 3,897
Premises.......................... 7,590 7,590
------- -------
100,228 78,848
Less -- accumulated depreciation
and amortization................ 37,585 28,123
------- -------
$62,643 $50,725
======= =======
</TABLE>

NOTE 4 -- DEFERRED SALES COMMISSIONS:

During 1993, certain funds sponsored by the Corporation began offering
multiple classes of shares. These funds offer Class A shares, which are sold
with a sales charge imposed at the time of purchase, and Class B shares which
are subject to a contingent deferred sales charge imposed on redemptions made
within a specified period. Class B shares are also subject to an annual
distribution fee payable to Service Corporation pursuant to a distribution plan
adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940
("Rule 12b-1 Plan"). Sales commissions paid by Service Corporation to
broker/dealers for selling Class B shares are capitalized by Service Corporation
and amortized to operations over six years. This amortization period
approximates the period of time during which the sales commissions paid to
broker/ dealers are expected to be recovered from the funds through the payments
made pursuant to the funds' Rule 12b-1 Plans. Contingent deferred sales charges,
when received by Service Corporation, reduce unamortized deferred sales
commissions. At December 31, 1993, deferred sales commissions included in Other
assets amounted to $14.2 million (net of amortization of $1.2 million, included
in Underwriting and other fees).

NOTE 5 -- STOCKHOLDERS' EQUITY:

At December 31, 1993, Additional paid-in capital and Retained earnings were
not available for payment of dividends to the extent of $196.6 million,
substantially representing the cost of treasury stock and required capital for
the Corporation's regulated subsidiaries.

Pursuant to the merger agreement (see Note 11), the Corporation may not
declare dividends, other than the regular quarterly dividend of $.19 per share,
and may not purchase any additional treasury shares.

On January 19, 1994, the Board of Directors of the Corporation declared a
first quarter dividend of $.19 per share, payable on February 16, 1994 to
stockholders of record at the close of business on February 7, 1994.

NOTE 6 -- STOCK PLANS AND CONTINGENT
BENEFIT PLAN:

1989 Non-Qualified Stock Option Plan:

In 1989, the stockholders of the Corporation approved the 1989 Non-Qualified
Stock Option Plan (the "Plan") of the Corporation. The Plan authorizes the
Corporation to grant Options to purchase up to 1,750,000 shares of common stock
to key employees and key consultants who render services to the Corporation, at
a price of not less than 95% of the price of the Corporation's common stock on
the New York Stock Exchange on the day the Option is granted. The Plan provides
generally that no Option shall be exercisable within two years nor more than ten
years from the date of grant. Shares acquired upon exercise of Options will be
registered under the Securities Act of 1933 and may be resold pursuant to such
registration.
The following table summarizes the 1989 Non-Qualified Stock Option Plan
activity (000's omitted):

<TABLE>
<CAPTION>
1993 1992
----- -----
<S> <C> <C>
Outstanding at beginning of year... 1,388 1,458
Exercised during the year.......... (6) (17)
Forfeited during the year.......... (8) (53)
Granted during the year............ 50 --
----- -----
Outstanding at end of year......... 1,424 1,388
===== =====
</TABLE>

Such options may be exercised at prices ranging from $24.06 to $41.63.
At December 31, 1993, 603,000 of such Options were exercisable. The remaining
options are exercisable as follows: 344,500 in 1994, 332,000 in 1995, 119,500 in
1996 and 12,500 in 1997 and 1998.

Incentive Stock Option Plan:

In 1982, the stockholders of the Corporation approved a plan under which
Incentive Stock Options may be granted to the Corporation's key executives
allowing them to purchase up to 1,500,000 shares of common stock of the
Corporation. Under the plan, Options were granted for the purchase of either
Book Value Shares or Market Shares. The plan provides that no Option shall be
exercisable within one year, nor more than ten years, from the date of grant.
The plan expired in 1992, and no new Options may be granted under the plan,
although existing unexercised Options will continue in accordance with their
terms. No Market Shares are outstanding.
Book Value Shares must be acquired from and sold back to the Corporation at
the book value (as defined in the plan) of the Corporation's Common Stock.

The plan also provides for compensation (included in Accrued Compensation and
Benefits)

-46-

<PAGE>
to recipients of Options in amounts equal to any cash dividends declared by the
Corporation during the period following the grant of an Option up to the date of
its exercise.
Additional information with respect to Incentive Stock Options is as follows
(000's omitted):

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Outstanding at beginning of year..... 352 465
Exercised during the year*........... (21) (90)
Forfeited during the year............ - (23)
--- ---
Outstanding at end of year........... 331 352
=== ===
<FN>
*Exercised for an aggregate of $319,000 in 1993 and $678,000 in 1992.
</TABLE>

In connection with the exercise of the Options, the Corporation received
interest bearing notes payable over a maximum of 15 years. The balance of such
notes at December 31, 1993 was $148,000. During 1993 and 1992, the Corporation
repurchased 29,000 and 67,000 shares, respectively, issued under the plan, for
an aggregate of $500,000 and $1,310,000, respectively.
At December 31, 1993 Options to purchase 186,000 Book Value Shares were
exercisable. The remaining Options to purchase Book Value Shares are exercisable
as follows: 26,700 per year from 1994 to 1997 and 19,000 in each of 1998 and
1999. Such Options to purchase Book Value Shares may be exercised at prices
ranging from $4.22 to $15.69. If the Corporation had been obligated to
repurchase the Book Value Shares issued and outstanding and also the Book Value
Shares related to exercisable Options under the plan at December 31, 1993, the
net amount payable would have been approximately $3.4 million.

Optional Incentive Payment Plan:

In 1986, the Corporation's Board of Directors approved an Optional Incentive
Payment Plan (the "Plan") pursuant to which individuals who have previously
exercised Stock Purchase Rights ("Rights") and Incentive Stock Options
("Options") (see above) could sell the shares related to such rights and Options
back to the Corporation pursuant to the provisions of those respective plans,
and in turn receive an equal number of units. Pursuant to the terms of the Plan,
quarterly payments are made on each unit held in amounts equal to the quarterly
after tax earnings per share of the Corporation and such amounts are charged to
operations.
The activity in Plan units was as follows (000's omitted):

<TABLE>
<CAPTION>
1993 1992
----- -----
<S> <C> <C>
Outstanding at beginning of year... 1,915 1,854
Issued in connection with
Options............................ 29 67
Forfeited during the year.......... (15) (6)
----- -----
Outstanding at end of year......... 1,929 1,915
===== =====
</TABLE>

Contingent Benefit Plan:

In 1984 a Contingent Benefit Plan (the "Plan") was approved which provides for
specified benefit payments to designated key employees of the Corporation in the
event of a change of control of the Corporation, as defined in the Plan, and
should their employment terminate during a specified period after such change of
control (see Note 11).

NOTE 7 -- EMPLOYEES' BENEFIT PLANS:

The employees of the Corporation and certain of its subsidiaries are covered
by a Retirement Profit-Sharing Plan and a related Deferred Compensation Plan. In
general, the Retirement Profit-Sharing Plan provides for the payment of death,
disability and retirement benefits to employees or their beneficiaries in
amounts equal to the value of their proportionate interests in the plan. The
aggregate contribution by the Corporation is based on consolidated net income
(as defined in the plans) or compensation of eligible employees. Amounts charged
to operations under the plans amounted to $9,321,000 in 1993, $9,304,000 in 1992
and $7,082,000 in 1991.
The Corporation has a defined benefit pension plan which covers employees of
the Corporation and certain of its subsidiaries. The costs to the Corporation
and the pension plan assets and liabilities are not material.

NOTE 8 -- FEDERAL, STATE AND LOCAL
INCOME TAXES:

The provisions for Federal and state and local taxes based on income include
current tax expense of $59,911,000 in 1993, $51,969,000 in 1992, and $30,448,000
in 1991. Deferred tax provision (credits) were ($1,011,000) in 1993,
($3,469,000) in 1992 and $3,252,000 in 1991.
The difference between total tax expense and the amount computed by applying
the statutory Federal income tax rate to pre-tax income is as follows (000's
omitted):

<TABLE>
<CAPTION>
1993 1992 1991
---------------- ---------------- ----------------
% of % of % of
pre-tax pre-tax pre-tax
Amount income Amount income Amount income
------- ------ ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Statutory tax
rate.............. $55,409 35.0% $47,488 34.0% $34,547 34.0%
State and local
income taxes*.... 7,417 4.7 7,138 5.1 4,290 4.2
Tax exempt and
other excludable
interest and
dividends........ (4,591) (2.9 ) (5,608) (4.0 ) (5,330) (5.2 )
Other............. 665 0.4 (518) (0.4 ) 193 0.2
------- ------ ------- ------ ------- ------
Total tax
expense........... $58,900 37.2% $48,500 34.7% $33,700 33.2%
======= ====== ======= ====== ======= ======
<FN>
*Net of Federal income tax benefit
</TABLE>

-47-

<PAGE>
NOTE 9 -- LEASES:

Future minimum payments, by year and in the aggregate, under noncancelable
operating leases (premises) with initial or remaining terms of one or more
years, were as follows at December 31, 1993 (000's omitted):

<TABLE>
<S> <C>
1994....................................... $ 13,827
1995....................................... 14,523
1996....................................... 14,589
1997....................................... 14,682
1998....................................... 13,316
1999-2005.................................. 79,406
--------
Total net minimum lease payments........... $150,343*
========
<FN>
*There are no rental commitments beyond 2005.
</TABLE>

Approximate net rental expense for operating leases amounted to $21,953,000 in
1993, $20,299,000 in 1992 and $18,397,000 in 1991.

NOTE 10 -- OTHER REVENUES (NET):

In September 1989, a Noncompetition Agreement was entered into with The Bank
of New York (Delaware) ("BONY") pursuant to which it was agreed that Dreyfus
entities will not compete with BONY in the unsecured credit card business for
six years after closing. In consideration for such covenants not to compete,
BONY agreed to make six annual payments of $8 million each, commencing in 1990.
These payments are being recognized annually over the period of the agreement
and are included in Other revenues (net).

NOTE 11 -- MERGER WITH MELLON BANK CORPORATION:

On December 5, 1993, the Corporation entered into an Agreement and Plan of
Merger providing for the merger of the Corporation with a subsidiary of Mellon
Bank Corporation ("Mellon"). Under the terms of the agreement, the Corporation's
stockholders will be entitled to receive .88017 shares of Mellon Common Stock
for each share of the Corporation's Common Stock, in a tax-free exchange.
Following the merger, it is planned that the Corporation will be a direct
subsidiary of Mellon Bank, N.A. Closing of the merger is subject to a number of
contingencies, including the receipt of certain regulatory approvals, the
approvals of the stockholders of the Corporation and Mellon, and approvals of
the Boards of Directors and shareholders of the mutual funds advised or
administered by the Corporation. The merger is expected to occur in mid-1994,
but could occur later. The merger agreement provides for the Corporation to pay
Mellon $50,000,000, should the Corporation, among other matters, engage in
certain business combination transactions specified in the agreement, with any
person other than Mellon, or under certain other defined circumstances. Costs
incurred in connection with the merger, including payments related to the
Contingent Benefit Plan (see Note 6), will be charged against operations of the
merged entities.

NOTE 12 -- LITIGATION

Subsequent to the announcement of the proposed merger with Mellon (see Note
11), public shareholders of the Corporation commenced six purported class action
suits in the Supreme Court of the State of New York, County of New York, naming
the Corporation, Mellon and the individual directors of the Corporation as
defendants, with respect to the transactions contemplated by the Agreement and
Plan of Merger with Mellon. The Corporation believes that these complaints lack
merit and intends to defend them vigorously.
On December 22, 1993, six shareholders of mutual funds of which the
Corporation is the adviser ("Dreyfus-managed mutual funds") filed an application
with the U.S. Securities and Exchange Commission (the "SEC") for a statutory
determination that the "non-interested" directors of the individual
Dreyfus-managed mutual funds are "interested" directors within the meaning of
the Investment Company Act of 1940, thereby prohibiting them from voting on each
of the fund's advisory contracts and other related matters in connection with
the merger with Mellon (the "Application"). The non-interested directors have
opposed the Application. Counsel for the non-interested directors has advised
the Corporation that the Application lacks merit.

NOTE 13 -- OTHER MATTERS:

A) The Corporation earned revenues (management fees) from Dreyfus Liquid
Assets, Inc., in excess of 10% of total revenues in the amount of $32,017,000
during 1991. No individual fund fees were in excess of 10% of total revenues
during 1993 or 1992.
B) The Corporation reimbursed certain fund expenses aggregating $8.9 million,
$6.7 million, and $5.4 million, in 1993, 1992 and 1991 respectively, to promote
the growth of fund assets. Such fund expense reimbursements are netted against
management fees in the accompanying financial statements.
C) Salaries and Other selling, general and administrative expenses of the
Corporation have been reduced by reimbursements from certain sponsored
investment companies for shareholder servicing costs incurred by the Corporation
on their behalf. Such amounts aggregated $29.2 million in 1993, $21.8 million in
1992 and $9.3 million in 1991.

-48-

<PAGE>

NOTE 14 -- SUBSEQUENT EVENT:

On March 23, 1994, two stockholders of Dreyfus Liquid Assets, Inc. ("Dreyfus
Liquid Assets") and Dreyfus Growth Opportunity Fund, Inc. ("Dreyfus Growth")
filed a complaint in the Supreme Court of the State of New York, County of
Queens, naming the Corporation and Service Corporation as defendants, and
Dreyfus Liquid Assets and Dreyfus Growth, individually, and as representatives
of the management investment companies for which the Corporation serves as
investment adviser under the 1940 Act, as nominal defendants. The complaint is
brought derivatively on behalf of Dreyfus Liquid Assets and Dreyfus Growth,
individually, and as representatives of the Dreyfus family of funds.

In the complaint, the plaintiffs allege, among other things, that the
Corporation and Service Corporation violated their fiduciary duties by receiving
pecuniary benefits from the sale of their "trust offices" in connection with the
Merger (see Notes 11 and 12). The plaintiffs further allege that the
Corporation and Service Corporation breached their respective fiduciary duties
by charging the Dreyfus family of funds excessive fees of at least $55 million,
in order to maximize profits earned from the sale of the "trust offices," and
by acting solely to maximize their own profits through the proposed sale of the
"trust offices" to Mellon, in violation of Section 15(f) of the 1940 Act.
Finally, the plaintiffs allege that the Merger will impose an "unfair burden"
on the Dreyfus family of funds.

The action seeks, among other things, to enjoin the Corporation and Service
Corporation from selling the profits from the "trust offices" to Mellon, or, in
the event that the Merger is consummated, a rescission of such sale or an
accounting and disgorgement of all profits earned by the Corporation and Service
Corporation as a result of the sale of the "trust offices," unspecified
compensatory damages, costs and disbursements.

Defendants' time to move, answer or otherwise respond to the complaint has
not yet expired. The Corporation believes that the complaint lacks merit and
intends to defend the suit vigorously.

-49-

<TABLE>
<CAPTION>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS, THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES, DECEMBER 31, 1993

Column A Column B Column C Column D Column E

Number of Market or fair Amount at which each portfolio
shares or units - value of each of equity security issues and
Name of issuer and principal amount Cost of issue at balance each other security issue
title of each issue of bonds or notes each issue sheet date carried in the balance sheet
------------------- ----------------- ---------- ------------------ ------------------------------

<S> <C> <C> <C> <C>
Investments in Marketable Securities:

Marketable Equity Securities:

Common and Preferred Stocks:

American Telegraph & Telephone 125,000 $7,168,000 $6,562,000
Archer-Daniels-Midland 252,500 5,796,000 5,744,000
Loews Corporation 60,000 5,773,000 5,580,000
Eli Lilly 100,800 5,690,000 5,985,000
Waban Inc. 250,000 4,906,000 3,406,000
Community Psychiatric Centers 145,000 2,527,000 2,030,000
International Business Machines 50,000 2,157,000 2,825,000
Danielson Holding 624,899 2,062,000 5,077,000
Coca Cola Enterprises 150,000 2,010,000 2,288,000
Baker Hughes Inc. 100,000 1,938,000 2,000,000
Noel Group, Inc. 359,066 1,844,000 2,648,000
Seagram Co. LTD. 60,000 1,578,000 1,568,000
American Express 50,000 1,577,000 1,544,000
Global Marine 350,000 1,336,000 1,444,000
Ladbroke Group 600,000 1,306,000 1,445,000
Marion Merrell Dow 70,000 1,285,000 1,260,000
Rowan Company 150,000 1,225,000 1,350,000
Banco Latinoamer de Export'E' 42,500 1,177,000 1,928,000
Baxter International 50,000 1,161,000 1,219,000
Amax Gold Inc. 150,000 1,111,000 1,031,000
Other Common and Preferred Stocks 12,939,000 13,384,000

Sponsored and Administered
Investment Companies:

100% U.S. Treasury Money
Market Fund, L.P. 24,377,000 24,377,000 24,377,000
Focus Funds 1,600,000 20,000,000 20,000,000
Short Term Income Fund 1,074,380 13,416,000 13,344,000
Wilshire Index Funds 386,609 5,431,000 5,353,000
Asset Allocation Fund 404,300 5,043,000 5,126,000
Institutional Short Term Treasury Fund 2,533,300 5,041,000 5,041,000
International Equity Fund 402,400 5,036,000 6,197,000
Other Equity Funds 10,877,000 11,604,000
Other Fixed Income Funds 5,903,000 5,958,000
Tax Exempt Bond Funds 2,312,000 2,507,000
Other Sponsored and Administered Funds 5,765,000 6,153,000

Other Marketable Equity Securities:

Federated Investors - Adj. Rate Mort. Fund 786,677 7,837,000 7,796,000
Shay Financial - Adj. Rate Mortgage Fund 637,038 6,364,000 6,364,000
------------ ------------ ------------

Total Marketable Equity Securities $183,968,000 $190,138,000 $183,968,000
------------ ------------ ------------
</TABLE>
-50-
<TABLE>
<CAPTION>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS, THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES, DECEMBER 31, 1993

Column A Column B Column C Column D Column E

<S> <C> <C> <C> <C>
Other Marketable Securities:

Municipal Obligations:

Mississippi Higher Ed., 5.70%, 7/1/97 $10,000,000 $10,217,000 $10,508,000

Iowa School Corporation, 3.60%, 12/30/94 10,000,000 10,019,000 10,113,000

Pennslyvania State Cert., 4.00%, 6/1/95 10,000,000 9,984,000 10,024,000

City of New York, G.O., 5.25%, 8/1/99 10,000,000 9,929,000 10,402,000

Homestead, Florida, 4.75%, 9/1/99 9,870,000 9,870,000 10,141,000

South Dakota School, 3.35%, 12/30/94 9,000,000 9,000,000 9,071,000

New Jersey Hsg. Mort., 3.40%, 10/1/04
Mandatory Tender: 3/29/95 7,000,000 7,000,000 7,027,000

Maine Student Loan, 6.00%, 11/1/94 6,000,000 6,000,000 6,165,000

Village of Park Forest, IL 7.75%, 1/1/14
Mandatory Tender: 4/1/94 5,345,000 5,368,000 5,414,000

Local Gov't Assist. Corp. NY,
5.40%, 4/1/94 5,305,000 5,304,000 5,340,000

Dallas, TX G.O., 5.90%, 2/15/94 4,885,000 4,898,000 4,905,000

Montana Higher Ed., 6.20%, 6/1/97 4,720,000 4,782,000 5,023,000

State of Louisiana, G.O., 6.60%, 8/1/97 4,000,000 4,300,000 4,369,000

New York City, NY G.O., 5.25%, 8/1/97 4,000,000 3,994,000 4,153,000

Philadelphia, PA. School, 4.50%, 7/1/98 3,755,000 3,716,000 3,841,000

Maine Student Loan, 6.35%, 11/1/96 3,000,000 3,083,000 3,218,000

Dallas TX Fin. Auth., 5.75%, 2/15/94 2,815,000 2,822,000 2,826,000

Bay Springs, MS, 5.00%, 10/28/14
Mandatory Tender: 11/18/94 2,700,000 2,698,000 2,730,000

Missouri Stud. Loan, 4.70%, 2/15/95 2,000,000 2,002,000 2,027,000

Other Municipal Obligations
Tender: One - Five Years 9,685,000 9,714,000 10,010,000
------------ ------------

Total Municipal Obligations $124,700,000 $127,307,000 $124,700,000
------------ ------------ ------------
</TABLE>

-51-
<TABLE>
<CAPTION>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS, THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES, DECEMBER 31, 1993

Column A Column B Column C Column D Column E

Corporate Bonds 3,000,000 3,000,000 3,083,000 3,000,000
------------ ------------ ------------

Foreign Government Bond Options 25,701,522 (1) 542,000 2,134,000 2,134,000
------------ ------------ ------------

Swap Options 24,590,164 (1) 322,000 567,000 567,000
------------ ------------ ------------

Index Options 450 171,000 191,000 191,000
------------ ------------ ------------

State Government Agency Securities 75,000 75,000 75,000 75,000
------------ ------------ ------------

Foreign Bonds 25,000 25,000 25,000 25,000

------------ ------------ ------------

Total Other Marketable Securities 145,906,000 150,620,000 147,763,000
------------ ------------ ------------

Total Marketable Securities $329,874,000 $340,758,000 $331,731,000
============ ============ ============

Other Investments:

Limited Partnerships:

Omega Institutional Partners $67,000,000 $95,900,000
Omega Capital Partners 17,500,000 21,297,000
Mark Partners 9,000,000 9,658,000
Ethos Partners 8,000,000 8,504,000
Teton Partners 6,000,000 9,027,000
Zweig-DiMenna Partners 5,000,000 5,013,000
Centre Capital 3,655,000 6,731,000
Other Limited Partnerships 12,956,000 13,919,000
------------ ------------ ------------

Total Limited Partnerships: 129,111,000 170,049,000 $129,111,000

Other Securities 4,812,000 5,813,000 4,812,000
------------ ------------ ------------

Total Other Investments $133,923,000 $175,862,000 $133,923,000
============ ============ ============

(1) Represents notional amounts
</TABLE>
-52-

SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION

THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES

Column B
Column A -- Item Charged to expenses
- ----------------- ------------------------------------------
Year ended December 31,
------------------------------------------
1993 1992 1991
----------- ----------- -----------
Advertising, promotional
literature, fulfillment and
related mailing costs $54,279,000 $50,353,000 $45,306,000
=========== =========== ===========

Note: (a)Amounts for taxes, other than payroll and income taxes, maintenance and
repairs and depreciation and amortization of intangible assets are not
presented since such amounts are less than 1% of total sales and
revenues for 1993, 1992 and 1991.

-53-

<PAGE>

THE DREYFUS CORPORATION ANNUAL REPORT 1993

<PAGE>
THE DREYFUS CORPORATION ANNUAL REPORT 1993

DIRECTORS
HOWARD STEIN
Chairman of the Board
and Chief Executive Officer

MANDELL L. BERMAN
Real Estate Consultant and
Private Investor

JOSEPH S. DIMARTINO
President and
Chief Operating Officer

ALVIN E. FRIEDMAN
Senior Advisor to Dillon, Read & Co., Inc.

LAWRENCE M. GREENE
Legal Consultant

ABIGAIL Q. MCCARTHY
Author, Lecturer, Columnist and
Educational Consultant

JULIAN M. SMERLING
Vice Chairman of the Board

DAVID B. TRUMAN
Educational Consultant

OFFICERS*

HOWARD STEIN
Chairman of the Board
and Chief Executive Officer

JULIAN M. SMERLING
Vice Chairman of the Board

JOSEPH S. DIMARTINO
President and
Chief Operating Officer

DAVID W. BURKE
Chief Administrative Officer
and Vice President

ALAN M. EISNER
Chief Financial Officer
and Vice President

DANIEL C. MACLEAN III
General Counsel
and Vice President

ROBERT F. DUBUSS
Vice President

ELIE M. GENADRY
Vice President--
Institutional Sales

JEFFREY N. NACHMAN
Vice President--
Mutual Fund Accounting

PETER A. SANTORIELLO
Vice President

ROBERT H. SCHMIDT
Vice President

KIRK V. STUMPP
Vice President--
New Product Development

PHILIP L. TOIA
Vice President

JOHN J. PYBURN
Assistant Vice President

KATHERINE C. WICKHAM
Assistant Vice President--
Human Resources

MAURICE BENDRIHEM
Controller

MARK N. JACOBS
Secretary and Deputy General Counsel

CHRISTINE PAVALOS
Assistant Secretary

*The officers of the Corporation are
also officers and/or directors of one or
more affiliated companies and/or
sponsored investment companies.

MANAGERS OF
SPONSORED INVESTMENT
COMPANIES

HOWARD STEIN
JOSEPH S. DIMARTINO
PATRICIA CUDDY
A. PAUL DISDIER
THOMAS A. FRANK
KAREN M. HAND
RICHARD B. HOEY
BARBARA L. KENWORTHY
STEPHEN KRIS
PATRICIA A. LARKIN
KELLY MCDERMOTT
RICHARD J. MOYNIHAN
PETER A. SANTORIELLO
JILL SHAFFRO
RICHARD SHIELDS
L. LAWRENCE TROUTMAN
SAMUEL WEINSTOCK
MONICA S. WIEBOLDT
ERNEST G. WIGGINS JR.
WOLODYMYR WRONSKYJ

SUBSIDIARIES**
DREYFUS SERVICE CORPORATION
Robert H. Schmidt, President

DREYFUS MANAGEMENT, INC.
Peter A. Santoriello, President

THE DREYFUS SECURITY SAVINGS BANK, F.S.B.
William V. Healey
President

DREYFUS CONSUMER LIFE INSURANCE COMPANY
Howard Stein, President

DREYFUS PRECIOUS METALS, INC.
DREYFUS REALTY ADVISORS, INC.
Francis X. Tansey, President

THE TROTWOOD CORPORATION
Herbert Sturz, President

**Partial list.

TRANSFER AGENT & REGISTRAR
THE BANK OF NEW YORK
101 Barclay Street, New York, NY 10286

[D-LION LOGO]

The lion designs in this report are service marks of
the Dreyfus Service Corporation.

<PAGE>
THE DREYFUS CORPORATION
ANNUAL REPORT 1993

DEAR SHAREHOLDER:

For a Corporation that has always sought to be on the edge of change in the
financial service industry, this annual report marks, we believe, a new
beginning that should be welcomed by all. On December 6, 1993, in a widely
heralded statement, The Dreyfus Corporation and Mellon Bank Corporation
announced a definitive agreement to merge their companies. It is hoped that the
necessary regulatory and stockholder approvals enabling this transaction to be
consummated will be obtained in the next few months, although it is possible
that it may take longer.

As we approach this event, your Corporation at year-end was managing or
administering approximately $77 billion of assets for nearly two million
accounts. These funds were being managed in more than 130 different portfolios,
offering investors opportunities to invest their money in a variety of ways:
stocks, bonds, tax-exempt securities, money market instruments, foreign as well
as domestic issues and retirement accounts; and an investor can even buy gold
and silver bullion.

Revenues for the 1993 fiscal year totalled $386,028,000, a gain of 12.7%
over the 1992 revenues of $342,447,000. Net income after taxes for 1993 was
$99,411,000 or $2.70 per share vs. $91,171,000 and $2.40 per share in 1992. That
represented a gain of 9% in net income and 12.5% in earnings per share.

Gratifying as these results may be, they pale in our view, when compared
with the opportunities that await a stronger and more versatile Dreyfus
organization fully participating in the rapidly changing world of financial
services. In announcing our decision to move forward with Mellon we stated that
this event signaled more than the joining of two major American business
organizations; it was a melding of people, financial strengths and names that
over time have consistently been associated with integrity, innovation and
dedication to fiduciary care and deep personal trust. Noting the growing
complexity of the marketplace, the explosive growth in numbers of mutual funds
available to the public through innovative channels of distribution, and the
realization in the public's mind of the distinction between the act of saving
and the act of investing, we recognized the future of financial services as we
saw it--and acted upon it. That recognition, simply stated, was that two
organizations that had played so prominent a role in our nation's financial
history--Mellon and Dreyfus--would be uniquely positioned to meet the public's
growing desire for an array of high quality financial products delivered by a
source committed to impeccable standards.

It was clear to us at Dreyfus, to our colleagues at Mellon and to expert
observers of the field, that in the financial world significant change was in
the air, and it required innovation and real leadership to react appropriately.

Dreyfus has, over the course of forty years, prided itself on anticipating
economic change; considered itself adept in meeting new demands from its
customers; and, mindful of its obligations to its shareholders, always sought to
attain long-term growth by taking prudent and sensible risks in that direction.
It is our belief today that this special Dreyfus tradition not only continues
but also formed the basis for the historic financial transaction arrived at with
the like-minded people of Mellon.

The ancients have taught us that "to everything there is a season and there
is a time for every purpose."

There was a time, shortly after World War II, for the rejuvenation of
mutual funds in this country--and under the leadership of Jack Dreyfus, the name
Dreyfus became synonymous with the goals of prudence and integrity in the
personal financial arena.

There was a time for broader public awareness and education about mutual
funds so that the financial opportunities once reserved for the few could be
made available to the many--and the Dreyfus Lion and its innovative advertising
campaigns led the industry for decades. This, coupled with breakthroughs in
educational literature, Prospectus presentation, and new forms of direct
customer services caused our business, our funds and our reputation to grow.

And there was a time in the '70s of rising taxes, incomes, and interest
rates, that caused us to spearhead the effort in Washington to allow corporate
mutual funds to pass through to fund shareholders the tax exemptions of
municipal securities--giving Dreyfus a leadership position in tax-free funds,
all to the great benefit of our shareholders.

But perhaps the most signal event in the mutual fund world was the creation
of money market funds--with Dreyfus in the lead to once again grant to the many
the level of yields on cash reserves that until then were available only to very
large investors. Dreyfus Liquid Assets, Dreyfus Worldwide Dollar

<PAGE>
and many other Dreyfus money market funds became household names. It was the
attractiveness and growth of these funds and their impact on America's banks
that brought about personal financial industry realignments of such magnitude
that the joining of savings organizations with the traditional investment
industry reached the point of inevitability.

And so it is that a vital corporation that time and again met every purpose
and demand of its customers was prepared for the major change of its era.

If "to everything there is a season," it was incumbent upon us at Dreyfus
to recognize the vast changes that were occurring and to react as before in a
prudent and sensible way for the benefit of our shareholders. The world had
changed completely now that the public had recognized that the distinction
between the act of saving and investment had come to an end. And it was apparent
to those with the courage to see that the future would belong to whoever could
meet the customers' demand for comprehensive planning and financial management
services from a trusted and highly regarded core advisor. No longer just a
provider of mutual funds, no longer just a bank, but an amalgam that would set
the standard for personalized financial services as we enter the new century.

For Dreyfus then, if we were to move to the future as we saw it, the only
remaining question was who existed in the financial community who held the same
values, had the same proud history and reputation for integrity, shared the
understanding of this new era, and had proven themselves to be builders of
sufficient strength--strong enough to entrust the vision?

When Mellon approached us, the answer became apparent.

Mellon, we judged, was an institution that in combination with Dreyfus
would enable both of us to do the exciting and rewarding things together that we
could not have readily done alone.

As a merged entity the eventual result will be an entirely new organization
in the field of financial services. We plan for the new organization to offer
lifetime investment service to the public--not just new products, not just
periodic transactions, not just another mutual fund, but a lifetime of service
and financial care. We will try once again to bring to the many what was once
reserved for the few--the sense of dedication and service that was the hallmark
of a bank's trust department.

This letter would not be complete without a tribute to those who have
helped The Dreyfus Corporation reach this point in its history. First and
foremost is our founder, Jack Dreyfus, who set the course and standards so many
years ago. Then there are the men and women of the staff who literally have
built this company with their intelligence, their energy and their devotion. We
are very proud of our approximately 2,100 staff members, 34 of whom have been
with the Company for more than 20 years.

Our Board of Directors has also been of invaluable assistance in helping to
guide the growth of The Dreyfus Corporation over the years and, most recently,
in connection with the Mellon merger.

To one and all who have helped nourish the Dreyfus Lion over the years,
past employees, retirees and present staff and Directors, we extend the
heartfelt thanks of a grateful Corporation.

Sincerely,

/s/ Howard Stein /s/ Joseph S. DiMartino
- ------------------------- --------------------------------------
Howard Stein Joseph S. DiMartino
Chairman of the Board and President and Chief Operating Officer
Chief Executive Officer
New York, N.Y.
February 10, 1994

<PAGE>

DESCRIPTION OF BUSINESS

The Dreyfus Corporation ("Corporation") serves primarily as an investment
adviser and manager of mutual funds and, through a wholly-owned subsidiary,
Dreyfus Service Corporation ("Service Corporation"), as a distributor of shares
of the Dreyfus Group of Mutual Funds.

In addition, the Corporation provides investment advisory and
administrative services, directly and through a wholly-owned subsidiary, Dreyfus
Management, Inc., to various pension plans, institutions and individuals.

Based upon assets under management at December 31, 1993, the Corporation,
one of the largest mutual fund organizations in the country, managed or
administered 136 mutual fund portfolios with approximately 1.9 million
shareholder accounts.

The following table sets forth certain information with respect to net
assets managed, advised or administered by the Corporation by fund category, at
the dates shown (in billions):

<TABLE>
<CAPTION>
At December 31,
-----------------
1993 1992
----- -----
<S> <C> <C>
Taxable money market funds........ $31.2 $38.0
Tax-exempt bond funds............. 21.3 17.9
Equity funds...................... 8.3 7.0
Tax-exempt money market funds..... 7.6 7.6
Fixed income funds................ 4.8 3.9
Funds jointly
advised/administered............ 3.2 3.8
Separately advised accounts....... 1.2 1.3
----- -----
Total $77.6 $79.5
===== =====
</TABLE>

------------------------

SELECTED CONSOLIDATED FINANCIAL DATA
(000's omitted, except per share amounts)

<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Management, investment advisory
and administrative fees (net) (a)..... $297,472 $273,603 $220,213 $176,443 $180,441
Other revenues (net) (a)................ 88,556 68,844 62,093 84,854 91,659
Total Revenues.......................... 386,028 342,447 282,306 261,297 272,100
Sale of MasterCard accounts, net of
direct expenses....................... -- -- -- -- 118,503
Net Income.............................. 99,411 91,171 67,910 62,093 147,877(b)
Total Assets............................ 914,588 872,621 847,028 792,964 924,064
Per common share:
Net Income............................ $2.70 $2.40 $1.77 $1.56 $3.63(b)
Cash dividends declared............... $ .74 $ .64 $ .52 $ .52 $ .52

<FN>
- ---------------
(a) Years prior to 1993 have been reclassified to conform to the current year's
presentation.
(b) Includes $65,479 ($1.61 per share) relating to the sale of MasterCard
accounts (net of direct and related expenses), which is not included in
Total Revenues.
</TABLE>

SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA
(000's omitted, except per share amounts)

<TABLE>
<CAPTION>
For the Quarter Ended
------------------------------------------------------------------------------------------------
1993 1992
---------------------------------------------- ---------------------------------------------

<CAPTION>
Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Sept. 30 June 30 March 31
---------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues..... $102,120 $97,662 $93,327 $92,919 $89,658 $89,935 $82,632 $80,222
Net Income......... 24,724 24,680 24,767 25,240 23,100 22,786 22,449 22,836
Net Income per
common share..... $.68 $.68 $.68 $.68 $.62 $.61 $.59 $.60
</TABLE>

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

I. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
For the three years ended December 31, 1993, the Stockholders' Equity of
the Corporation increased $147.6 million, from $677 million to $824.6 million.
This increase was primarily attributable to earnings applicable to investment
management services and elimination of the aggregate net unrealized loss on the
marketable equity securities portfolio (see Note 2 to Consolidated Financial
Statements). The increase was reduced by treasury stock purchases ($67.7
million) and dividends paid to stockholders ($71.4 million).
The Corporation generally has maintained a substantial degree of liquidity
and believes that cash and cash flows from operations are adequate to meet
current and potential business demands and opportunities. In addition to the
liquidity provided by cash and cash equivalents of $301.3 million at December
31, 1993, the Corporation maintains a significant investment in marketable
securities. The resources of the Corporation have been utilized to sponsor,
promote and market shares of the Dreyfus Group of Mutual Funds and to sponsor
and promote new business activities.
At December 31, 1993, the Corporation had investments in marketable
securities and certain other investments, consisting of limited partnerships
engaged in securities trading, with an aggregate cost and market value of $450
million and $498.8 million, respectively. In determining the appropriate
carrying amounts of these investments, the Corporation considered whether any
declines in market value below carrying values were "other than temporary." In
1993, the Corporation charged to operations $14.9 million for "other than
temporary" declines (See Note 2 to Consolidated Financial Statements).

II. RESULTS OF OPERATIONS

The following table sets forth certain information with respect to the
Corporation's fee revenue for the periods shown (000's omitted):

<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Management, investment advisory and
administrative fees, net of fees
waived*........................... $306,367 $280,304 $225,617
Less: Fund expense reimbursements... 8,895 6,701 5,404
-------- -------- --------
Management, investment advisory
and administrative fees (net)..... $297,472 $273,603 $220,213
======== ======== ========

*Amount of fees waived.............. $ 48,115 $ 66,452 $ 87,222
======== ======== =======
Management, investment advisory and
administrative fees, by fund
category (net)
Taxable money market funds........ $105,219 $111,961 $ 81,890
Tax-exempt bond funds............. 100,781 79,482 63,223
Equity funds...................... 44,257 36,992 33,228
Tax-exempt money market funds..... 18,799 19,000 17,065
Fixed income funds................ 19,678 15,757 13,166
Funds jointly
advised/administered.............. 4,131 4,945 5,800
Separately advised accounts....... 4,607 5,466 5,841
-------- -------- --------
Total $297,472 $273,603 $220,213
======== ======== ========
<FN>
Years prior to 1993 have been reclassified to conform to the current
year's presentation.
</TABLE>

Revenues of the Corporation are primarily fees from mutual funds sponsored
by the Corporation. These fees are at various rates and are based on the average
net assets of each respective fund. The increase in Management, investment
advisory and administrative fees during 1993, as shown in the preceding table,
was principally due to a reduction of management fees waived and reflects a
change in the mix of the average net assets under management during the year.
Although the average net assets of sponsored taxable money market funds declined
during 1993, there has been substantial growth in tax exempt bond and equity
funds during the same period. Management fee rates charged to tax exempt bond
and equity funds are generally higher than the rates charged to taxable money
market funds. During 1992, the increase in Management, investment advisory and
administrative fees was principally due to an increase in the average net assets
of sponsored taxable money market funds for which a management fee was charged.
From time to time, for competitive reasons, the Corporation agrees to waive
certain management fees and/or reimburse certain fund expenses, either for a
specified or an unspecified period of time to increase the fund's rate of return
to investors and thereby promote the growth of fund assets. In the future, the
Corporation may continue to follow such practices; however, it is not possible
to predict what effect, if any, the imposition of management fees and/or the
discontinuance of fund expense reimbursements may have on the future level of
certain fund assets under management. Furthermore, the Corporation presently is
unable to determine to what extent, if any, it may impose management fees on
funds where fee waivers presently exist, or to what extent fund expense
reimbursements may be reduced in the future.

1993 Compared to 1992

During 1993, the average net assets of sponsored funds was $78.1 billion,
approximately the same as in 1992. Average net assets of sponsored taxable money
market funds declined $6.7 billion, which was substantially offset by an
increase in the average net assets of sponsored tax exempt funds ($4.1 billion),
equity funds ($1.2 billion) and fixed income funds ($1 billion).
Management fees waived decreased $18.3 million during 1993 as compared to
1992, primarily applicable to certain sponsored taxable money market funds.
Fund expense reimbursements (netted against management fee revenues)
increased during 1993 as compared to 1992, primarily attributable to certain
taxable money market, municipal bond and fixed income funds.
Interest and dividends decreased from $30.6 million during 1992 to $24.2
million during 1993, primarily as a result of reduced investment yields and, to
a lesser extent, reduced amounts invested following the Corporation's purchase
of treasury stock during the third quarter of 1992 and the first half of 1993.
Underwriting and other fees increased $6.5 million during 1993 as compared
to 1992, primarily due to an increase in the amount of service fees ($5.7
million) and, to a lesser extent, fees earned in connection with variable
annuity products. Under various service plans adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, the Corporation receives fees (based
on respective average daily net assets) from funds advised and/or administered
by the Corporation to distribute and promote the sale of these funds. Such
service fees are net of payments to service agents for administration, for
servicing fund shareholders who are also their clients and/or for distribution.

<PAGE>
Other revenues increased $1.5 million during 1993 as compared to 1992,
primarily due to an increase in fees earned from bank collective investment fund
servicing fees and a gain recognized from the sale of Dreyfus Life Insurance
Company, a subsidiary of the Corporation.
Salaries increased in 1993 as compared to 1992 primarily due to an increase
in staff in the Sales and Group Benefit areas.
Advertising and direct selling expenses increased from $56.1 million in
1992 to $62.5 million in 1993, primarily as the result of an increase in
television and newspaper advertising.
Other selling, general and administrative expenses increased primarily as a
result of an increase in occupancy and communication costs related to the Sales
and Group Benefits areas and systems development costs.
Interest expense decreased during 1993 as compared to 1992, primarily due
to a decrease in banking customer deposits and the interest rates paid on such
deposits.
The increase in the Corporation's effective tax rate from 34.7% in 1992 to
37.2% in 1993, was primarily due to an increase in the Federal statutory tax
rate from 34% to 35% and a decrease in the proportion of tax-exempt interest and
dividend income to total pre-tax income.

1992 Compared to 1991

The average net assets of sponsored funds increased $11.4 billion from an
average of $67.1 billion in 1991 to an average of $78.5 billion in 1992. This
increase resulted principally from the growth of sponsored taxable money market
funds ($6.5 billion) and, to a lesser extent, tax-exempt bond funds ($2.9
billion).
Management fees waived decreased $20.8 million during 1992 as compared to
1991, primarily attributable to certain sponsored taxable money market funds.
Fund expense reimbursements (netted against management fee revenues)
increased during 1992 as compared to 1991, primarily related to certain
municipal bond, taxable money market and fixed income funds.
Interest and dividends decreased from $41.3 million in 1991 to $30.6
million in 1992, primarily as a result of reduced investment yields and, to a
lesser extent, the Corporation's purchase of treasury stock during the third
quarter of 1992.
Underwriting and other fees (net) increased $7.6 million during 1992 as
compared to 1991, principally due to an increase in underwriting commissions as
a result of an increase in the sale of funds sold with a sales charge.
Other revenues increased $3.3 million during 1992, primarily due to an
increase in mortgage revenue from the Corporation's banking affiliates. Mortgage
revenue amounted to $3.4 million in 1992 as compared to $1.3 million in 1991.
Salaries increased $8.3 million in 1992 compared to 1991, largely related
to the expansion of the Corporation's Sales and Group Benefit Plan operations.
Advertising and other direct selling expenses increased $6.3 million in
1992 attributable to an increase in television and newspaper advertising.
Other selling, general and administrative expenses
increased $9.3 million during 1992, due to an increase in occupancy and
communications costs, employee benefits and expenses related to the mortgage
program of the Corporation's banking affiliates.
Interest expense decreased during 1992 as compared to 1991, primarily due
to a decrease in interest rates paid on banking customer deposits and a decrease
in the balance of such deposits.
The increase in the Corporation's effective tax rate from 33.2% in 1991 to
34.7% in 1992 was primarily due to a decrease in the proportion of tax-exempt
interest and dividend income to total pre-tax income.

Merger with Mellon Bank Corporation

On December 5, 1993, the Corporation entered into an Agreement and Plan of
Merger providing for the merger of the Corporation with a subsidiary of Mellon
Bank Corporation ("Mellon").
Following the merger, it is planned that the Corporation will be a direct
subsidiary of Mellon Bank, N.A. Closing of the merger is subject to a number of
contingencies, including the receipt of certain regulatory approvals, the
approvals of the stockholders of the Corporation and of Mellon, and approvals of
the boards of directors and shareholders of mutual funds advised or administered
by the Corporation. The merger is expected to occur in mid-1994, but could occur
later (see Note 11 to the Consolidated Financial Statements).

Matters Relating to Competition

The mutual fund industry has grown dramatically over the past several years
and is highly competitive. Total assets managed by the industry grew from
approximately $810 billion at December 31, 1988 to over $2 trillion at December
31, 1993. There are presently almost 600 mutual fund management companies in the
United States, managing over 4,500 mutual funds of varying sizes and investment
policies. Dreyfus and the mutual fund industry are in competition with insurance
companies, banking organizations, securities dealers and other financial
institutions that provide investors with competing mutual funds and alternatives
to mutual funds. This competition has increased over the past several years, in
part as a result of a number of rulings and interpretations issued by Federal
bank regulatory agencies that have expanded significantly the range of mutual
fund activities in which banks and bank holding companies may engage.
Competition is based upon investment performance in terms of attaining the
stated objectives of particular funds, advertising and sales promotional
efforts, available distribution channels (such as banks and broker dealers), the
levels of fees and expenses charged to particular mutual funds and the type and
quality of services offered to investors.

Recent Mutual Fund Developments

During 1993, the Corporation continued to introduce funds which offer the
public a range of investment options with greater diversity.

During the first quarter of 1993, Dreyfus Strategic Investing and funds in
the Premier Family of Funds began offering multiple classes of shares. The
multiple classes consist of Class A shares, which are sold with a sales charge
imposed at the time of purchase, and Class B shares, which are subject to a
contingent deferred sales charge imposed on redemptions made within a specified
period and operate pursuant to a distribution plan adopted in accordance with
Rule 12b-1 under the Investment Company Act of 1940. These funds offer
alternative classes of shares so that an investor may choose the method of
purchase deemed most
5

<PAGE>
desirable given the amount of the purchase, the length of time the investor
expects to hold the shares and other relevant circumstances.
Also during the first quarter of 1993, First Prairie U.S. Government Income
Fund commenced operations. Its objective is to provide as high a level of
current income as is consistent with the preservation of capital. The
Corporation provides administrative services for the fund and Dreyfus Service
Corporation serves as the fund's distributor. The First National Bank of Chicago
is the fund's investment adviser.
During the second quarter of 1993, the Registration Statement for Dreyfus
International Equity Fund, Inc. was declared effective and the fund commenced
operations. The fund's objective is capital growth. The Corporation serves as
the fund's investment adviser and Dreyfus Service Corporation as its
distributor; M&G Investment Management Limited is the fund's sub-investment
adviser.
Also during the second quarter, the Capital Appreciation Portfolio of
Dreyfus Variable Investment Fund commenced operations. The Capital Appreciation
Portfolio's primary goal is to provide long-term capital growth consistent with
the preservation of capital; current income is a secondary goal. The fund, which
consists of six separate portfolios, was designed as a funding vehicle for
variable annuity contracts and variable life insurance policies offered by the
separate accounts of various life insurance companies.
Pursuant to shareholder vote, on May 7, 1993, Dreyfus Index Fund merged
into Peoples Index Fund, Inc. and on September 17, 1993, The Dreyfus Convertible
Securities Fund, Inc. merged into Dreyfus Growth and Income Fund, Inc. in a
tax-free exchange.
During the third quarter of 1993, the Registration Statement for Dreyfus
Asset Allocation Fund, Inc. was declared effective and the fund commenced
operations. The fund's objective is to maximize total return, consisting of
capital appreciation and current income.
Premier Growth Fund, Inc. ("Premier Growth") and Premier California Insured
Municipal Bond Fund ("Premier California Insured"), the latest additions to the
Premier Family of Funds, commenced operations during the third quarter of 1993.
Premier Growth's primary goal is to provide long-term capital growth consistent
with the preservation of capital; current income is a secondary goal. Premier
California Insured seeks to maximize current income exempt from Federal and
State of California personal income taxes to the extent consistent with the
preservation of capital.
Pursuant to stockholder vote, on September 24, 1993, all of the assets and
liabilities of McDonald Money Market Fund, Inc. and McDonald U.S. Government
Money Market Fund, Inc., for which the Corporation had served as sub-investment
adviser and administrator, were transferred into Gradison-McDonald U.S.
Government Reserves which the Corporation does not advise or administer.
Additionally, McDonald Tax Exempt Money Market Fund, Inc., for which the
Corporation had served as sub-investment adviser and administrator, was
liquidated on September 27, 1993.
During the fourth quarter of 1993, Dreyfus Pennsylvania Intermediate
Municipal Bond Fund commenced operations. The goal of this fund is to provide as
high a level of current income exempt from Federal and Pennsylvania income taxes
as is consistent with the preservation of capital.
Also during the fourth quarter, Dreyfus Institutional Short Term Treasury
Fund commenced operations. Its objective is to provide investors with a high
level of current income with minimum fluctuation of principal value.
In the fourth quarter, The Dreyfus Socially Responsible Growth Fund, Inc.
commenced operations. The fund's primary goal is to provide capital growth;
current income is a secondary goal. The fund is intended to be a funding vehicle
for variable annuity contracts and variable life insurance policies to be
offered by the separate accounts of various life insurance companies.
During the fourth quarter, Dreyfus Global Investing (A Premier Fund) began
operating under the name Premier Global Investing.
The Corporation is continuing to consider the development of additional
funds to serve the diverse investment interests of various segments of the
public.

Consumer Financial Services

The Dreyfus Security Savings Bank, F.S.B. (the "Savings Bank"), an indirect
wholly-owned subsidiary of the Corporation, is a Federally-chartered savings
bank and a member of the Federal Deposit Insurance Corporation (the "FDIC"). The
Savings Bank offers various bank products and services (including, but not
limited to, certificates of deposit, residential mortgage loans and secured
personal loans) to investors in the mutual funds sponsored by the Corporation
and to the general public.
During 1993 the Savings Bank, with its principal office located in Paramus,
New Jersey, opened a branch office in San Francisco, California. It also
received conditional approval from the Office of Thrift Supervision to open
additional branch offices in six other states.

III. IMPACT OF INFLATION

As noted above, revenues of the Corporation are principally derived from
management fees earned from funds sponsored by the Corporation. The fee rates
charged to the funds have not been raised except for an increase in July 1977 in
the management fee rate charged to The Dreyfus Fund (in the case of The Dreyfus
Fund, the fee had not been changed since the inception of the fund over 25 years
before that date). In the case of all other Dreyfus funds, no increase in fee
rates has been requested.
Inflation, of course, has affected the cost of operations and may continue
to do so in the future. During 1993, the Consumer Price Index increased
approximately 2.7%. The Corporation is not able to predict what effect inflation
will have on interest rates and on the continued attractiveness to the investing
public of money market funds and other funds managed by the Corporation.

- ------------------------------------------------------------------

The results of operations for 1993 and prior years are not necessarily
indicative of future results. In evaluating the future operating results of the
Corporation and subsidiary companies, several factors should be considered,
including: inflation and interest rates, competition, the effects of the
economy, the international situation, public attitude toward mutual funds, the
securities market and government regulations.

<PAGE>
The Dreyfus Corporation and Subsidiary Companies

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES:
Management, investment advisory and
administrative fees (net)--Note 13...... $297,472,000 $273,603,000 $220,213,000
Interest and dividends..................... 24,219,000 30,559,000 41,270,000
Underwriting and other fees (net)--Note
4....................................... 21,653,000 15,182,000 7,603,000
Net gains on investment transactions--
Notes 1 and 2........................... 25,193,000 7,128,000 590,000
Other (net)--Note 10....................... 17,491,000 15,975,000 12,630,000
------------ ------------ ------------
Total Revenues........................ 386,028,000 342,447,000 282,306,000
------------ ------------ ------------
EXPENSES--NOTE 13:
Salaries................................... 85,970,000 73,881,000 65,614,000
Advertising and other direct selling
expenses................................ 62,529,000 56,149,000 49,888,000
Other selling, general and administrative
expenses................................ 77,909,000 70,400,000 61,069,000
Interest................................... 1,309,000 2,346,000 4,125,000
------------ ------------ ------------
Total Expenses........................ 227,717,000 202,776,000 180,696,000
------------ ------------ ------------
Income before taxes based on income.......... 158,311,000 139,671,000 101,610,000
------------ ------------ ------------
Provision for taxes based on income--Note 8:
Federal................................. 47,400,000 38,700,000 27,200,000
State and Local......................... 11,500,000 9,800,000 6,500,000
------------ ------------ ------------
58,900,000 48,500,000 33,700,000
------------ ------------ ------------
NET INCOME................................... $ 99,411,000 $ 91,171,000 $ 67,910,000
============ ============ ============

See notes to consolidated financial statements.

<PAGE>
The Dreyfus Corporation and Subsidiary Companies

CONSOLIDATED BALANCE SHEETS

<PAGE>

<TABLE>
<CAPTION>
December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES:
Short positions in marketable equity securities--
Notes 1 and 2...................................... $ 7,915,000 $ 1,441,000
Due to brokers and dealers............................ 386,000 4,190,000
Banking customer deposits (fair value--$26,525,000 in
1993 and $35,044,000 in 1992)--Note 1.............. 26,519,000 35,192,000
Taxes, including Federal income taxes payable of
$5,965,000 in 1992--Note 8......................... 4,318,000 10,096,000
Accrued compensation and benefits..................... 17,756,000 14,546,000
Sundry liabilities and accrued expenses............... 33,105,000 27,618,000
------------ ------------
TOTAL LIABILITIES.................................. 89,999,000 93,083,000
------------ ------------
STOCKHOLDERS' EQUITY--NOTES 2, 5 AND 6:
Common stock--par value $.10 per share (50,000,000
shares authorized), shares issued--44,973,000 in
1993 and 1992...................................... 4,497,000 4,497,000
Additional paid-in capital............................ 279,576,000 278,728,000
Retained earnings..................................... 731,188,000 659,012,000
-------------- ------------
1,015,261,000 942,237,000
Less:
Treasury stock--at cost, 8,417,000 shares in 1993
and 7,486,000 shares in 1992..................... 190,524,000 154,943,000
Net unrealized loss on marketable equity
securities....................................... -- 7,560,000
Notes receivable for common stock issued........... 148,000 196,000
-------------- ------------
TOTAL STOCKHOLDERS' EQUITY......................... 824,589,000 779,538,000
COMMITMENTS, CONTINGENCIES AND OTHER MATTERS--
NOTES 6, 7, 9, 11, 12 AND 13
-------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......... $ 914,588,000 $872,621,000
============== ============
</TABLE>

See notes to consolidated financial statements.

<PAGE>
The Dreyfus Corporation and Subsidiary Companies

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NOTES
NET UNREALIZED RECEIVABLE
ADDITIONAL (LOSS) FOR COMMON TOTAL
COMMON PAID-IN RETAINED TREASURY ON MARKETABLE STOCK STOCKHOLDERS'
STOCK CAPITAL EARNINGS STOCK EQUITY SECURITIES ISSUED EQUITY
---------- ------------ ------------ ------------- ----------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1990......... $4,497,000 $276,842,000 $544,126,000 ($122,239,000) ($ 26,026,000) ($217,000 ) $ 676,983,000
Net Income... 67,910,000 67,910,000
Cash
Dividends
on
Common
Stock
($.52 per
share)..... (19,932,000) (19,932,000)
Reduction in
net
unrealized
loss on
marketable
equity
securities... 17,397,000 17,397,000
Purchase of
treasury
stock
(44,000
shares).... (780,000) 258,000 (522,000)
Issuance of
treasury
stock
(28,000
shares).... 212,000 27,000 (239,000 ) --
Other........ 70,000 2,000 72,000
---------- ------------ ------------ ------------- ----------------- ---------- -------------
Balance at
December 31,
1991......... 4,497,000 277,124,000 592,104,000 (122,992,000) (8,629,000) (196,000 ) 741,908,000
Net Income... 91,171,000 91,171,000
Cash
Dividends
on
Common
Stock
($.64 per
share)..... (24,263,000) (24,263,000)
Reduction in
net
unrealized
loss on
marketable
equity
securities... 1,069,000 1,069,000
Purchase of
treasury
stock
(946,000
shares).... (32,054,000) 78,000 (31,976,000)
Issuance of
treasury
stock
(108,000
shares).... 1,036,000 103,000 (678,000 ) 461,000
Other........ 568,000 600,000 1,168,000
---------- ------------ ------------ ------------- ----------------- ---------- -------------
Balance at
December 31,
1992......... 4,497,000 278,728,000 659,012,000 (154,943,000) (7,560,000) (196,000 ) 779,538,000
Net Income... 99,411,000 99,411,000
Cash
Dividends
on
Common
Stock
($.74 per
share)..... (27,235,000) (27,235,000)
Reduction in
net
unrealized
loss on
marketable
equity
securities... 7,560,000 7,560,000
Purchase of
treasury
stock
(958,000
shares).... (35,604,000) 367,000 (35,237,000)
Issuance of
treasury
stock
(27,000
shares).... 479,000 23,000 (319,000 ) 183,000
Other........ 369,000 369,000
---------- ------------ ------------ ------------- ----------------- ---------- -------------
Balance at
December 31,
1993......... $4,497,000 $279,576,000 $731,188,000 ($190,524,000) $ -- ($148,000 ) $ 824,589,000
========== ============ ============ ============== ================= =========== =============
</TABLE>
10

See notes to consolidated financial statements.
11

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:

Nature of Business:

Principles of Consolidation:

The consolidated financial statements include the accounts of the Corporation
and its subsidiaries. All significant intercompany accounts and transactions
were eliminated in consolidation.

Income Recognition:

Fair Value of Financial Instruments:

NOTE 2 -- INVESTMENTS:

Marketable Equity Securities:

<PAGE>
Other Marketable Securities:

Other Investments:

Financial Instruments with Off-Balance Sheet Risk:

Accounting for Certain Investments in Debt and Equity Securities:

NOTE 3 -- FIXED ASSETS:

<PAGE>
The major classifications of fixed assets are as follows (000's omitted):

NOTE 4 -- DEFERRED SALES COMMISSIONS:

NOTE 5 -- STOCKHOLDERS' EQUITY:

NOTE 6 -- STOCK PLANS AND CONTINGENT
BENEFIT PLAN:

1989 Non-Qualified Stock Option Plan:

Incentive Stock Option Plan:

The plan also provides for compensation (included in Accrued Compensation and
Benefits)

Optional Incentive Payment Plan:

Contingent Benefit Plan:

NOTE 7 -- EMPLOYEES' BENEFIT PLANS:

NOTE 8 -- FEDERAL, STATE AND LOCAL
INCOME TAXES:

<PAGE>
NOTE 9 -- LEASES:

Approximate net rental expense for operating leases amounted to $21,953,000 in
1993, $20,299,000 in 1992 and $18,397,000 in 1991.

NOTE 10 -- OTHER REVENUES (NET):

NOTE 11 -- MERGER WITH MELLON BANK CORPORATION:

On December 5, 1993, the Corporation entered into an Agreement and Plan of
Merger providing for the merger of the Corporation with a subsidiary of Mellon
Bank Corporation ("Mellon"). Under the terms of the agreement, the Corporation's
stockholders will be entitled to receive .88017 shares of Mellon Common Stock
for each share of the Corporation's Common Stock, in a tax-free exchange.
Following the merger, it is planned that the Corporation will be a direct
subsidiary of Mellon Bank, N.A. Closing of the merger is subject to a number of
contingencies, including the receipt of certain regulatory approvals, the
approvals of the stockholders of the Corporation and Mellon, and approvals of
the Boards of Directors and shareholders of the mutual funds advised or
administered by the Corporation. The merger is expected to occur in mid-1994,
but could occur later. The merger agreement provides for the Corporation to pay
Mellon $50,000,000, should the Corporation, among other matters, engage in
certain business combination transactions specified in the agreement, with any
person other than Mellon, or under certain other defined circumstances. Costs
incurred in connection with the merger, including payments related to the
Contingent Benefit Plan (see Note 6), will be charged against operations of the
merged entities.

NOTE 12 -- LITIGATION

NOTE 13 -- OTHER MATTERS:

<PAGE>
REPORT OF ERNST & YOUNG,
INDEPENDENT AUDITORS

Stockholders and Board of Directors
The Dreyfus Corporation

We have audited the accompanying consolidated balance sheets of The Dreyfus
Corporation and Subsidiary Companies as of December 31, 1993 and 1992, and the
related consolidated statements of income, changes in stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1993.
These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The Dreyfus
Corporation and Subsidiary Companies at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993 in conformity with generally
accepted accounting principles.

/s/ Ernst & Young

New York, New York
January 27, 1994

COMMON STOCK MARKET PRICES AND DIVIDENDS

The Corporation's Common Stock (DRY) is traded on the New York Stock
Exchange (NYSE) and the Pacific Stock Exchange (PSE). There were approximately
1,900 holders of record of the Corporation's Common Stock at December 31, 1993.
For 1993 and 1992 the high and low stock prices of the Corporation's Common
Stock as traded on the NYSE Composite Tape, and dividends declared by the
Corporation were as follows:

MARKET PRICE OF COMMON STOCK
OF THE CORPORATION

<TABLE>
<CAPTION>
1993 1992
-------------- --------------
High Low High Low
-------------- --------------
<S> <C> <C> <C> <C>
1st Quarter........ 44 3/8 36 1/2 48 37 3/8
2nd Quarter........ 41 3/8 35 3/4 40 3/4 33 1/2
3rd Quarter........ 43 7/8 39 3/8 38 1/4 33 3/4
4th Quarter........ 47 1/2 38 1/2 40 3/4 34 5/8
</TABLE>

CASH DIVIDENDS DECLARED BY THE CORPORATION
(PER SHARE)

<TABLE>
<CAPTION>
1993 1992
---- ----
<C> <S> <C> <C>
1st Quarter................ $.17 $.13
2nd Quarter................ .19 .17
3rd Quarter................ .19 .17
4th Quarter................ .19 .17
---- ----
$.74 $.64
==== ====
</TABLE>

The Corporation expects to continue its policy of paying regular cash
dividends, although there is no assurance as to future dividends because
dividends are dependent on future earnings, capital requirements and financial
condition. Pursuant to the Corporation's merger agreement with Mellon, the
Corporation is restricted from declaring dividends in excess of the regular
quarterly dividend of $.19 per share (see Note 5 to the Consolidated Financial
Statements).
- --------------------------------------------------------------------------------
STOCKHOLDERS MAY OBTAIN A COPY OF THE DREYFUS CORPORATION'S FORM 10-K FOR 1993,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT CHARGE, BY WRITING
TO CONTROLLER, THE DREYFUS CORPORATION, 200 PARK AVENUE, NEW YORK,
NEW YORK 10166

<PAGE>

The Dreyfus Corporation

For close to 30 years, together we have cared for and watched over his
growth alone. Now is the time - and he is ready - to seek out new
challenges and opportunities in the company of others.

[See Appendix A]

Total Appreciation: 3,950%.
Price of The Dreyfus Corporation stock since it went public on October 27, 1965.
(*Restated for stock splits 3-for-1 Feb. 1981; 2-for-1 Oct. 1983; 3-for-1 Jul.
1986)

TABLE FOR LINE GRAPH

PRICE OF THE DREYFUS CORPORATION STOCK*
APPENDIX A:

|-------------------------|
| |The Dreyfus |
| |Corporation |
|December 31,|stock price*|
|------------|------------|
| 1966 | $0.77 |
| 1967 | 1.92 |
| 1968 | 2.47 |
| 1969 | 1.69 |
| 1970 | 1.46 |
| 1971 | 1.52 |
| 1972 | 0.83 |
| 1973 | 0.34 |
| 1974 | 0.20 |
| 1975 | 0.34 |
| 1976 | 0.46 |
| 1977 | 0.56 |
| 1978 | 0.63 |
| 1979 | 1.06 |
| 1980 | 2.49 |
| 1981 | 5.58 |
| 1982 | 6.29 |
| 1983 | 7.83 |
| 1984 | 12.58 |
| 1985 | 28.83 |
| 1986 | 29.00 |
| 1987 | 24.75 |
| 1988 | 25.00 |
| 1989 | 35.63 |
| 1990 | 27.63 |
| 1991 | 49.25 |
| 1992 | 40.50 |
| 1993 | 45.00 |
|-------------------------|

(*Restated for stock splits 3-for-1 Feb. 1981; 2-for-1 Oct. 1983; 3-for-1
Jul. 1986.)

EXHIBITS
--------

10.(iii)(A)(g) Agreement relating to split-dollar life insurance
policy covering Joseph S. DiMartino and his wife.

10.(iii)(A)(h) Consulting Agreement between Lawrence M. Greene
and The Dreyfus Corporation. [This Agreement has
been extended, by resolution of the Board of
Directors of the Corporation adopted on December
7, 1984, for an indefinite period subject to
termination upon sixty days' notice by either
party.]

EXHIBIT 10.(iii)(A)(g)

THIS AGREEMENT made as of this 29th day of July,
1993, by and among THE DREYFUS CORPORATION, a New York
corporation, having its principal office at 200 Park Avenue, New
York, New York 10166 (hereinafter referred to as the
"Corporation"); JOSEPH S. DI MARTINO, residing at Lindsley Road,
New Vernon, New Jersey 07976 (hereinafter referred to as
"DiMartino"); and HOWARD M. STEIN, as Trustee of THE JOSEPH S.
DI MARTINO TRUST dated June 10, 1993 (hereinafter referred to as
the "Trustee").
WHEREAS, DiMartino is employed by the Corporation and
has rendered competent efforts on behalf of the Corporation and
the Corporation wishes to give recognition to DiMartino for such
efforts; and
WHEREAS, in recognition of the foregoing, the
Corporation wishes to help DiMartino provide for the security of
his family through participation in a split-dollar insurance
program; and
WHEREAS, DiMartino and the Trustee agree to
participate in such program to the extent hereafter provided.
NOW, THEREFORE, it is mutually agreed that:
ARTICLE I
APPLICATION FOR LIFE INSURANCE
1. In furtherance of the purposes of this Agreement,
the Trustee has purchased a policy of life insurance insuring
DiMartino's life and the life of his wife Linda DiMartino with
the Hartford Insurance Company (hereinafter referred to as "the
Insurer"), in the total face amount of $5,000,000 (hereinafter
referred to as the "Policy"), which is described in Exhibit A
attached hereto and by this reference made a part hereof.
2. The parties hereby agree that the Policy shall be
subject to the terms and conditions of this Agreement.
ARTICLE II
OWNERSHIP OF LIFE INSURANCE
The Trustee, and his successors, shall be the sole and
absolute owner of the Policy and may exercise all ownership
rights granted to the owner thereof by the terms of the Policy,
without the consent of any other person, except as may otherwise
be provided herein.
ARTICLE III
PAYMENT OF PREMIUMS ON POLICY
1. The following provisions shall apply so long as
DiMartino is in the employ of the Corporation, regardless of how
his employment may terminate. The Corporation, within a
reasonable time after the Insurer under the policy has issued
its notice of premium due, shall notify DiMartino and the
Trustee of the exact amount due from the Trustee. If the notice
from the Insurer of premium due is sent to the Trustee, the
Trustee shall promptly deliver a copy thereof to the
Corporation. The amount due from the Trustee shall be an amount
equal to the annual cost of the value of the economic benefit
attributable to the insurance protection on the joint lives of
DiMartino and his wife Linda DiMartino, provided by such Policy
in accordance with this Agreement, measured by the lower of (i)
the U.S. Life Table 38 (or the corresponding applicable rate or
other measure set forth in any applicable Revenue Ruling or
Treasury Regulation or other Treasury notice), while both are
alive and thereafter measured by the PS 58 Rate, set forth in
Revenue Ruling 55-747 (or the corresponding applicable rate or
other measure set forth in any Revenue Ruling or Treasury
Regulation or other Treasury notice modifying or revoking
Revenue Ruling 55-747), or (ii) the insurer's current published
premium rate for annually renewable term insurance for standard
risks. The Trustee shall pay such required portion of the
premium to the Insurer of the Policy on or prior to the premium
due date. If the Trustee fails to make such timely payment, the
Corporation, in its sole and absolute discretion, may elect to
make the Trustee's portion of the premium payment, which payment
shall be recovered by the Corporation as provided herein.
Notwithstanding any other provision of this Agreement: The
amount payable by the Corporation under any circumstances shall
not exceed Sixty Thousand ($60,000) Dollars annually for sixteen
years, beginning with the effective date of the Policy in 1993.
2. On or before the due date of each premium payable
on the Policy, or within the grace period provided therein, the
Corporation shall pay to the Insurer a portion of the premium
equal to (a) the gross premium, less (b) the portion of the
premium payable by the Trustee in accordance with the preceding
paragraph 1, and shall, upon request, promptly furnish DiMartino
and/or the Trustee evidence of timely payment of such premium.
ARTICLE IV
ELECTION OF DIVIDEND OPTION
The Trustee, as the Owner of the Policy, may elect, in
his sole and absolute discretion, to have all dividends declared
by the Insurer on the Policy applied to:
A. reduce the premium payable on the Policy; or
B. purchase paid-up additional insurance on the life
of DiMartino and his wife Linda DiMartino; or

C. purchase one-year term insurance on the life of
DiMartino and his wife Linda; or

D. applied for any other purpose allowable by the
Policy.
Notwithstanding the foregoing provisions of this Article IV:
Until this Agreement has terminated, no such dividend election
by the Trustee may be made if the cash value of the Policy would
be reduced below the amount it would otherwise have been in the
absence of such election.
ARTICLE V
COLLECTION AND PAYMENT OF DEATH BENEFIT
1. Within thirty (30) days after the death of the
survivor of DiMartino and his wife Linda DiMartino, the
Corporation and the Trustee shall apply to the Insurer for the
death benefit and take all action necessary to obtain such
payment. The Corporation and the Trustee shall cooperate in
giving instructions to the Insurer for the issuance of two (2)
checks to bring about the following results. The proceeds shall
be divided into two parts. The First Part shall be an amount
equal to (a) the total amount of the premiums which the
Corporation, its successors and assigns, have paid with respect
to the Policy, reduced by (b) any outstanding indebtedness which
was incurred by the Corporation, its successors and assigns, and
which is secured by the Policy, including any interest due on
such indebtedness. The Second Part, if any, shall be the
balance of the proceeds.
(a) The First Part shall be paid to the
Corporation, its successors or assigns. The parties hereby
confirm that in no event shall the amount payable to the
Corporation exceed the Policy proceeds payable as a result of
the maturity of the Policy as a death claim.
(b) The Second Part shall be paid to the
beneficiary designated by the Trustee, or his successors. No
portion of the proceeds shall be paid to the beneficiary or
beneficiaries designated by the Trustee until the First Part of
the proceeds has been paid fully to the Corporation.
2. The Insurer may rely upon a sworn statement in
form satisfactory to the Insurer furnished by the Corporation,
its successors or assigns, as to the amount of the First Part,
and any payment made on account of such statement shall
discharge the Issuer accordingly.

ARTICLE VI
COLLATERAL ASSIGNMENT
1. To secure repayment to the Corporation of the
amount of the premiums on the Policy paid by it, upon maturity
of the policy as provided in the preceding Article V of this
Agreement or upon termination of this Agreement as provided in
the succeeding Article VII of this Agreement, the Trustee has
assigned, contemporaneously herewith, the Policy to the
Corporation as collateral. The parties hereby confirm that the
Policy shall be subject to the terms and conditions of the
collateral assignment filed with the Insurer relating to the
Policy. The collateral assignment of the Policy to the
Corporation hereunder shall not be terminated, altered or
amended by the Trustee, without the written consent of the
Corporation.
2. Except as otherwise provided herein, the Trustee
shall not sell, assign, transfer, borrow against, surrender or
cancel the Policy nor change the beneficiary designation
provisions thereof, without the written consent of the
Corporation.
ARTICLE VII
TERMINATION OF AGREEMENT AND OPTION ON TERMINATION
1. This Agreement shall terminate upon the occurrence
of any one of the following events:
(a) The insolvency or dissolution of the
Corporation, provided, however, that under no circumstances
shall the creditors of the Corporation have any claim to the
Policy or proceeds thereunder. For the purposes of this
Agreement, the term "insolvency" shall mean (i) the filing of a
voluntary petition in bankruptcy or for an arrangement,
reorganization or other relief from creditors under the Federal
Bankruptcy Code or any similar law, (ii) the appointment of a
receiver for a substantial part of the assets of the Corporation
which appointment has not been vacated within ninety (90) days,
or (iii) the failure, within ninety (90) days, to obtain
dismissal of any involuntary petition in bankruptcy or for
reorganization filed against the Corporation.
(b) If DiMartino leaves the employ of the
Corporation voluntarily.
(c) The death of DiMartino, whether or not his
wife Linda is living.
(d) If DiMartino's employment by the Corporation
is terminated by the Corporation with just cause.
2. Upon termination of this Agreement, the obligation
of the Corporation to make payments on account of policy
premiums and interest due on policy loans shall cease. The
parties hereby confirm that this Agreement shall continue in
full force and effect if DiMartino's employment by the
Corporation is terminated by the Corporation without just cause,
provided however, upon termination of DiMartino's employment by
the Corporation, whether such termination is with or without
cause, the obligation of the Corporation to make payments on
account of policy premiums and interest due on policy loans
shall cease. The Corporation shall be entitled to repayment as
set forth in the succeeding paragraph 3.
3. For ninety (90) days after termination of this
Agreement, the Trustee shall have the option of obtaining the
release of the collateral assignment of the Policy to the
Corporation. To obtain such release, the following shall apply:

(i) If DiMartino leaves the employ of the
Corporation voluntarily, or his employment is terminated by the
Corporation with just cause, or upon the death of DiMartino, the
Corporation shall be promptly repaid an amount equal to the
total amount of the premiums which the Corporation, its
successors and assigns, have paid with respect to the Policy,
reduced by any outstanding indebtedness which was incurred by
the Corporation, its successors and assigns, and secured by the
Policy, including any interest due on such indebtedness. Such
repayment to the Corporation shall be made by the Trustee,
provided however that (i) in the event that DiMartino
voluntarily leaves the employ of the Corporation, or (ii) in the
event that DiMartino's employment is terminated by the
Corporation with just cause, or (iii) if DiMartino dies and is
survived by his wife Linda DiMartino, the Trustee shall be
relieved of the obligation to pay such amount to the Corporation
if DiMartino has caused other effective arrangements to be made
for the payment of said amount to the Corporation, provided
further that the Trustee nevertheless shall have the option of
obtaining the release of the collateral assignment of the policy
to the Corporation.
(ii) If DiMartino's employment by the
Corporation is terminated without just cause, then so long as
the policy continues in force the Corporation shall not be
entitled to any repayment until the expiration of the sixteen
year period during which the Corporation would have been
obligated under this Agreement to pay premiums on the policy if
Dimartino's employment had not been terminated. At the
expiration of such period, the Corporation shall be promptly
repaid an amount equal to the total amount of the premiums which
the Corporation, its successors and assigns, have paid with
respect to the Policy, reduced by any outstanding indebtedness
which was incurred by the Corporation, its successors and
assigns, and secured by the Policy, including any interest due
on such indebtedness. If prior to the expiration of the sixteen
year period the Policy is canceled, the Trustee shall promptly
notify the Corporation of such cancellation, and within a
reasonable time thereafter the Corporation will be paid the
lesser of (a) the total amount of the premiums which the
Corporation, its successors and assigns, have paid with respect
to the Policy, reduced by any outstanding indebtedness which was
incurred by the Corporation, its successors and assigns, and
secured by the Policy, including any interest due on such
indebtedness; and (b) the cash surrender value of the Policy at
the date of cancellation.
(iii) Upon receipt of the amount to which it is
entitled in accordance with the foregoing provisions, the
Corporation shall release the collateral assignment of the
Policy, by the execution and delivery to the Trustee of an
appropriate instrument of release in form satisfactory to the
Insurer and Trustee.
4. If the Trustee fails to exercise the option
provided for in the preceding paragraph 3 of this Article VII,

within ninety (90) days after the date of termination of the
Agreement, then, the Corporation may enforce its right to be
repaid the amount set forth in the preceding paragraph 3,
provided that in the event the cash surrender value of the
Policy exceeds the amount due the Corporation, such excess shall
be paid to the Trustee.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
1. This Agreement is governed by the laws of the
State of New York.
2. The parties to this Agreement agree that this
Agreement is among the Corporation, DiMartino and the Trustee to
the exclusion of all other persons or entities herein mentioned.

The filing of copies of this Agreement with the Insurer in no
way operates to make the Insurer a party to this Agreement, or
any modification or amendment hereof. No provision of this
Agreement nor any modification hereof, shall in any way be
construed as enlarging, changing, varying, or in any other way
affecting the obligations of the Insurer as expressly provided
in the Policy, except insofar as the provisions are made a part
of the Policy by the collateral assignment executed by the
Trustee and filed with the Insurer in connection herewith. The
Insurer shall be fully discharged from its obligations under the
Policy by payment of the Policy death benefit to the beneficiary
named in the Policy, subject to the terms and conditions of the
Policy.
3. This split-dollar insurance plan is a small
welfare plan under the Employment Retirement Security Act of
1974 (ERISA). Under this act, an employee has certain rights
and protection. His rights are set forth in this agreement and
in the insurance contracts issued in his name.
In making a claim for benefits, the employee must make
his claim on a form acceptable to the Corporation and the
Company. The plan administrator will supply him with the claim
forms. The request will set forth the basis of the employee's
claim and authorize the plan administrator and the Company to
investigate the claim and take the necessary steps to facilitate
payment of benefits.
If the Corporation or the Company denies the
employee's claim, it must provide him with the following
information in a written reply:
(a) The specific reason or reasons for the
denial;
(b) Reference specific provisions of the split-
dollar agreement on which the denial is based;
(c) Describe any additional material or
information necessary for him to perfect his claim; and
(d) Explain the procedure for review of claims.
Within 60 days of a claim denial from the Corporation
or the Company, or some later date that is reasonable, the
employee may request in writing a review of the denied claim by
the Corporation or the Company.
The employee may, in asking for the review: (a)
pertinent documents, and (b) submit issues and comments in
writing.
On receipt of the request for review, the Corporation
or the Company, as the case may be, shall promptly, within 60
days, deny or grant the claim. The decision shall be made in
writing and in a manner calculated to be understood by the
employee. It also shall include specific reference to pertinent
provisions on which the denial is based.
After review, if the employee feels he has been
improperly denied a claim for benefits, he has the right to file
suit in federal or state court. If he is successful in his
lawsuit, the court may, if it so decides, require the other
party to pay legal costs, including attorney's fees.
4. The parties to this Agreement agree to execute
such documents as are necessary to carry out this Agreement.
5. This Agreement may not be amended or revoked,
except by an instrument in writing signed by the parties hereto
or their respective successors or assigns, before a Notary and
mutually acknowledged expressly modifying or revoking the
provisions hereof.
6. The article headings and numbers and the paragraph
numbers are included herein for convenience only and in no way
are to be considered to be a part of this Agreement.
7. In the event that any provisions of this Agreement
shall be held illegal, unenforceable or in conflict with the
laws of New York or the United States, such provisions shall be
deemed separable from the other provisions of this Agreement and
all the other provisions shall continue in full force and
effect.
8. This Agreement and all obligations and covenants
hereunder shall bind the parties hereto, their successors and
assigns.
9. Any waiver by a party of any of the provisions of
this Agreement or any right or rights hereunder, shall not be
deemed to be a continuing waiver and shall not prevent or estop
such parties from thereafter enforcing such provisions or rights
as to the future and the failure of any party to insist in one
or more instances upon the strict performance of any one or more
of the terms of the provisions of this Agreement by the other
parties shall not be construed as a waiver or relinquishment of
1any such terms or provisions, but the same shall continue in
full force and effect.
10. Any notice, consent or demand required or
permitted under this Agreement shall be in writing and shall be
signed by the party giving or making the same. If such notice,
consent or demand is mailed to a party hereto, it shall be sent
by United States Certified Mail, postage prepaid, addressed to
such party's last known address as shown on the records of the
Corporation. The date of such mailing shall be deemed the date
of notice, consent or demand.
11. This Agreement may be executed in three
counterparts which together shall constitute one Agreement with
the same effect as if the parties executing the counterparts had
all executed this Agreement as of the day and year first above
written.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
THE DREYFUS CORPORATION

By:/s/ Robert Dubuss
ATTESTED:

/s/ Christine Pavalos
Assistant Secretary
/s/ Joseph S. Di Martino
JOSEPH S. DI MARTINO

THE JOSEPH S. DI MARTINO TRUST
DATED JUNE 10, 1993

By: /s/ Howard M. Stein
HOWARD M. STEIN, Trustee

STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )

On this 2nd day of August, 1993, before me
personally came Robert Dubuss, to me known, who, being
duly sworn, did depose and say that he resides at
200 Park Avenue New York, NY. 10166, that he is the
Vice President of THE DREYFUS CORPORATION, the corporation
described in and which
executed the foregoing instrument; that he knows the seal of
said corporation, that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his
name thereto by like order.

/s/ Elena Kuhlmann
Notary Public

STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )

On the 2nd day of August, 1993, before me
personally came JOSEPH S. DI MARTINO, to me known and known to
me to be the individual described in and who executed the
foregoing instrument and duly acknowledged to me that he
executed the same.

/s/ Elena Kuhlmann
Notary Public

STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )

On the 2nd day of August, 1993, before me
personally came HOWARD M. STEIN, to me known and known to me to
be the individual described in and who executed the foregoing
instrument and duly acknowledged to me that he executed the
same.

/s/ Elena Kuhlamnn
Notary Public

EXHIBIT A

The following insurance policy is subject to the
annexed Agreement:
Hartford Insurance Company Policy No. LLM1718578

THE DREYFUS CORPORATION

By: /s/ Robert F. Dubuss
ATTESTED:

/s/ Christine Pavalos
Assistant Secretary

/s/ Joseph S. Di Martino
JOSEPH S. DI MARTINO

THE JOSEPH S. DI MARTINO TRUST

By: /s/ Howard M. Stein
Howard M. Stein, Trustee

EXHIBIT 10.(iii)(A)(h)

CONSULTING AGREEMENT

AGREEMENT made as of the 29th day of October, 1981 between THE
DREYFUS CORPORATION (hereinafter called "Corporation"), a New York
corporation, having its offices and principal place of business at 767
Fifth Avenue, New York, New York 10153 and Lawrence M. Greene (hereinafter
called "Consultant"), residing at 315 East 70th Street, New York, New York
10021.

W I T N E S S E T H:

WHEREAS, the Consultant is presently an employee of the
Corporation and is expected to retire in January 1982; and
WHEREAS, the Corporation desires to retain the services of
Consultant, as hereinafter provided, and Consultant desires to accept such
retainer,
NOW, THEREFORE, in consideration of the promises, covenants and
agreements hereinafter contained, the Corporation agrees to retain
Consultant and Consultant hereby agrees to accept such retainer under the
terms and conditions hereinafter set forth:
1. This retainer shall be for a period commencing with the
retirement of Consultant in 1982 to December 31, 1982.
2. Consultant shall be available for consultation, advice and
assistance with respect to such corporate and legal matters pertaining to
the Corporation's business, proposed business and projects as may be
requested of him by the Board of Directors of the Corporation or by the
Board of any subsidiary of the Corporation or any investment company
sponsored by the Corporation, or by the Chief Executive Officer of the
Corporation. It is agreed that, as such Consultant, Consultant will
devote at least twenty hours per week, on average annually, in the
performance of his services for the Corporation.
3. For his consulting services, Consultant shall receive fees
from the Corporation of $75,000.00 (Seventy-Five Thousand) on an annual
basis, payable monthly.
4. In the event that it is possible to do so at reasonable
cost, Consultant, if eligible, will be included in the Major Medical
Insurance Plan of the Corporation and, if available, in its Medical
Reimbursement Plan during the consultancy.
5. Consultant shall be reimbursed for actual expenses incurred
by him which are properly reimbursable upon appropriate vouchers in
connection with Dreyfus related business, provided that Consultant has
received approval in advance from the Chief Executive Officer, or an
officer delegated by him, regarding the business matter to be engaged upon
by Consultant for the Corporation and provided further that the incurring
of expenses is submitted for review at least monthly.
6. Consultant agrees that he will not, except on behalf of the
Corporation, either during or after the termination of his retainer,
disclose or use any secret or confidential information (including
customers' lists and dealers' lists) relating to the Corporation, any
sponsored investment company, subsidiary, or affiliate, or the business of
any of them. Consultant further agrees that during the period covered by
this Agreement, he will not enter into any employment or consulting
arrangement with any investment company, or any investment company
underwriter, manager, or adviser, or any investment company sales
organization, or any organization sponsoring an investment company, except
investment companies sponsored by the Corporation or affiliates of the
Corporation.
7. It is agreed that the services to be rendered by Consultant
hereunder are of a special and unique character, the loss or impairment of
which may not be reasonably or adequately compensated in monetary damages.
Consultant hereby expressly agrees that the Corporation, in its
discretion, shall be entitled to injunctive or other equitable relief to
prevent a breach of this agreement by him. This provision shall not be
construed as a waiver or relinquishment by the Corporation of any other
rights or remedies which it may have or to which it may be entitled.
8. Any notice by either party to the other party hereunder
shall be sent by certified first class mail addressed to him or it at his
or its address above specified, or at such other address as he or it may
from time to time designate.
9. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Corporation and the Consultant have
caused this Agreement to be duly executed and delivered the day and year
first above written.

THE DREYFUS CORPORATION

By________________________________
Julian Smerling

Consultant

_______________________________
Lawrence M. Greene