File No. 2-56878
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 36 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 36 [X]
(Check appropriate box or boxes.)
DREYFUS MUNICIPAL BOND FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
X on December 29, 1995 pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
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on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended August 31, 1995 was filed on October 16, 1995.
DREYFUS MUNICIPAL BOND FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 4, 19
5 Management of the Fund 11
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 18
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 13
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
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10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-1, B-23
13 Investment Objectives and Policies B-2
14 Management of the Fund B-12
15 Control Persons and Principal B-12
Holders of Securities
16 Investment Advisory and Other B-15
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS MUNICIPAL BOND FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-24
18 Capital Stock and Other Securities B-28
19 Purchase, Redemption and Pricing B-18, B-19,
of Securities Being Offered B-23
20 Tax Status *
21 Underwriters B-18
22 Calculations of Performance Data B-26
23 Financial Statements B-38
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS DECEMBER 29, 1995
DREYFUS MUNICIPAL BOND FUND, INC.
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DREYFUS MUNICIPAL BOND FUND, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A NO-LOAD MUNICIPAL
BOND FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A LEVEL OF CURRENT INCOME
EXEMPT FROM FEDERAL INCOME TAX AS IS CONSISTENT WITH THE PRESERVATION OF
CAPITAL.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 29, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO
THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR
CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO
TIME.
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TABLE OF CONTENTS
Page
Annual Fund Operating Expenses................... 3
Condensed Financial Information.................. 4
Description of the Fund.......................... 4
Management of the Fund........................... 8
How to Buy Fund Shares........................... 9
Shareholder Services............................. 10
How to Redeem Fund Shares........................ 13
Shareholder Services Plan........................ 15
Dividends, Distributions and Taxes............... 16
Performance Information.......................... 17
General Information.............................. 18
Appendix......................................... 19
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This Page Intentionally Left Blank
Page 2
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C>
Management Fees (after expense reimbursement) ............................................... .59%
Other Expenses............................................................................... .11%
Total Fund Operating Expenses (after expense reimbursement).................................. .70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Example: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $7 $22 $39 $87
</TABLE>
- ---------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. The expenses noted above, without reimbursements,
would be: Management Fees _ .60% and Total Fund Operating Expenses _ .71%;
and the amount of expenses that an investor would pay, assuming redemption
after one, three, five and ten years, would be $7, $23, $40 and $88,
respectively. You can purchase Fund shares without charge directly from the
Fund's distributor; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund" and "Shareholder Services
Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year... $11.60 $12.87 $12.22 $12.03 $12.47 $12.24 $12.68 $13.17 $13.68 $12.39
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net..... .99 .93 .91 .91 .90 .87 .84 .79 .75 .72
Net realized and unrealized
gain (loss) on investments... 1.27 (.64) (.19) .44 (.23) .44 .49 .79 (.96) .09
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS........ 2.26 .29 .72 1.35 .67 1.31 1.33 1.58 (.21) .81
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net........ (.99) (.94) (.91) (.91) (.90) (.87) (.84) (.79) (.75) (.72)
Dividends from net realized
gain on investments..... - - - - - - - (.28) (.33) (.07)
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS.... (.99) (.94) (.91) (.91) (.90) (.87) (.84) (1.07) (1.08) (.79)
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
Net asset value, end of year.... $12.87 $12.22 $12.03 $12.47 $12.24 $12.68 $13.17 $13.68 $12.39 $12.41
======= ======= ====== ===== ====== ====== ====== ====== ======= ======
TOTAL INVESTMENT RETURN... 20.22% 2.30% 6.27% 11.60% 5.51% 11.11% 10.82% 12.62% (1.63%) 6.93%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets....... .69% .68% .71% .68% .67% .67% .68% .69% .68% .70%
Ratio of net investment income
to average net assets... 8.16% 7.34% 7.68% 7.41% 7.23% 7.05% 6.49% 5.96% 5.80% 5.94%
Portfolio Turnover Rate.... 53.03% 67.23% 50.63% 36.38% 28.06% 35.53% 67.86% 45.37% 36.25% 51.55%
Net Assets, end of year
(000's Omitted) $3,647,778 $3,528,585 $3,245,184 $3,485,053 $3,594,296 $4,081,440 $4,272,679 $4,724,389 $4,008,477 $3,936,734
- ------------------
</TABLE>
Further information about the Fund's performance is contained in the
Fund's annual report which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's goal is to provide you with as high a level of current
income exempt from Federal income taxes as is consistent with the
preservation of capital. To accomplish this goal, the Fund invests primarily
in Municipal Obligations (described below) rated A or better by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation ("S&P") or
Fitch Investors Service, Inc. ("Fitch"). The Fund's investment objective
cannot be changed without approval by the holders of a majority (as defined in
the Investment Company Act of 1940, as amended (the "1940 Act")) of the
Fund's outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved.
Page 4
MUNICIPAL OBLIGATIONS
Municipal Obligations are debt obligations issued by states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax exempt
industrial development bonds, in most cases, are revenue bonds that generally
do not carry the pledge of the credit of the issuing municipality, but
generally are guaranteed by the corporate entity on whose behalf they are
issued. Notes are short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond sale,
collection of taxes or receipt of other revenues. Municipal Obligations
include municipal lease/purchase agreements which are similar to installment
purchase contracts for property or equipment issued by municipalities.
Municipal Obligations bear fixed, floating or variable rates of interest,
which are determined in some instances by formulas under which the Municipal
Obligation's interest rate will change directly or inversely to changes in
interest rates or an index, or multiples thereof, in many cases subject to a
maximum and minimum. Certain Municipal Obligations are subject to redemption
at a date earlier than their stated maturity pursuant to call options, which
may be separated from the related Municipal Obligations and purchased and
sold separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least
80% of the value of its net assets (except when maintaining a temporary
defensive position) in Municipal Obligations. At least 65% of the value of
the Fund's net assets (except when maintaining a temporary defensive
position) will be invested in bonds, debentures and other debt instruments.
At least 75% of the value of the Fund's net assets must consist of
Municipal Obligations which, in the case of bonds, are rated no lower than A
by Moody's, S&P or Fitch. The Fund may invest up to 25% of the value of its
net assets in Municipal Obligations which, in the case of bonds, are rated
lower than A by Moody's, S&P and Fitch and as low as the lowest rating
assigned by such rating organizations. The Fund may invest in short-term
Municipal Obligations which are rated in the two highest rating categories by
Moody's, S&P or Fitch. See "Appendix" in the Statement of Additional
Information. Municipal Obligations rated BBB by S&P or Fitch or Baa by
Moody's are considered investment grade obligations; those rated BBB by S&P
and Fitch are regarded as having an adequate capacity to pay principal and
interest, while those rated Baa by Moody's are considered medium grade
obligations which lack outstanding investment characteristics and have
speculative characteristics. Investments rated Ba or lower by Moody's and BB
or lower by S&P and Fitch ordinarily provide higher yields but involve
greater risk because of their speculative characteristics. The Fund may
invest in Municipal Obligations rated C by Moody's or D by S&P or Fitch which
is such rating organizations' lowest rating and indicates that the Municipal
Obligation is in default and interest and/or repayment of principal is in
arrears. See "Investment Considerations and Risks_Lower Rated Bonds" below
for a further discussion of certain risks. The Fund also may invest in
securities which, while not rated, are determined by The Dreyfus Corporation
to be of comparable quality to those rated securities in which the Fund may
invest; for purposes of the 75% requirement described in this paragraph, such
unrated securities shall be deemed to have the ratings so determined. The
Fund also may invest in Taxable Investments of the quality described under
"Appendix _ Certain Portfolio Securities _ Taxable Investments."
Page 5
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
The Fund's annual portfolio turnover rate is not expected to exceed
100%. Higher portfolio turnover rates usually generate additional brokerage
commissions and expenses and the short-term gains realized from these
transactions are taxable to shareholders as ordinary income. The Fund may
engage in various investment techniques, such as lending portfolio securities
and options and futures transactions. The use of certain investment techniques
may give rise to taxable income. See also "Investment Considerations and
Risks" below and "Investment Objective and Management Policies _ Management
Policies"in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Even though interest-bearing securities are investments which
promise a stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore, are subject
to the risk of market price fluctuations. Certain securities that may be
purchased by the Fund, such as those with interest rates that fluctuate
directly or indirectly based on multiples of a stated index, are designed to
be highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and possibly loss of principal. The
values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuing entities. The Fund's net
asset value generally will not be stable and should fluctuate based upon
changes in the value of the Fund's portfolio securities. Securities in which
the Fund will invest may earn a higher level of current income than certain
shorter-term or higher quality securities which generally have greater
liquidity, less market risk and less fluctuation in market value.
USE OF DERIVATIVES _ The Fund may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments which derive
their performance, at least in part, from the performance of an underlying
asset, index or interest rate. TheDerivatives the Fund may use include
options and futures. While Derivatives can be used effectively in furtherance
of the Fund's investment objective, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can decrease the
liquidity of the Fund's investments and make more difficult the accurate
pricing of the Fund's portfolio. See "Appendix _ Investment Techniques _
Use of Derivatives" below, and "Investment Objective and Management Policies
_ Management Policies _ Derivatives" in the Statement of Additional
Information.
LOWER RATED BONDS _ The Fund may invest up to 25% of the value of its net
assets in higher yielding (and, therefore, higher risk) debt securities.
These are bonds such as those rated Ba by Moody's or BB by S&P or Fitch or as
low as the lowest rating assigned by Moody's, S&P or Fitch (commonly known as
junk bonds). They generally are not meant for short-term investing and may be
subject to certain risks with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated fixed-income
securities.The market price and yield of bonds rated Ba or lower by Moody's
and BB or lower by S&P and Fitch are more volatile than those of higher rated
bonds. Factors adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value. In addition, the
retail secondary market for these bonds may be less liquid than that of
higher rated bonds; adverse market conditions could make it difficult at
times for the Fund to sell certain securities or could result in lower
Page 6
prices than those used in calculating the Fund's net asset value. The Fund may
invest up to 5% of the value of its net assets in zero coupon securities and
pay-in-kind bonds (bonds which pay interest through the issuance of
additional bonds) rated Ba or lower by Moody's and BB or lower by S&P and
Fitch. These securities may be subject to greater fluctuations in value due
to changes in interest rates than interest-bearing securities and thus may be
considered more speculative than comparably rated interest-bearing
securities. See "Appendix _ Certain Portfolio Securities _ Ratings," and
"Investment Objective and Management Policies _ Investment Considerations and
Risks _Lower Rated Bonds" and "Dividends, Distributions and Taxes" in the
Statement of Additional Information.
MUNICIPAL OBLIGATIONS _ The Fund may invest more than 25% of the value of
its total assets in Municipal Obligations which are related in such a way
that an economic, business or political development or change affecting one
such security also would affect the other securities; for example, securities
the interest upon which is paid from revenues of similar types of projects,
or securities whose issuers are located in the same state. As a result, the
Fund may be subject to greater risk as compared to a fund that does not
follow this practice.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for
interest on Municipal Obligations may be introduced in the future. If any
such proposal were enacted that would reduce the availability of Municipal
Obligations for investment by the Fund so as to adversely affect Fund
shareholders, the Fund would reevaluate its investment objective and policies
and submit possible changes in the Fund's structure to shareholders for their
consideration. If legislation were enacted that would treat a type of
Municipal Obligation as taxable, the Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth herein.
ZERO COUPON SECURITIES _ Federal income tax law requires the holder of a
zero coupon security or of certain pay-in-kind bonds to accrue income with
respect to these securities prior to the receipt of cash payments. To
maintain its qualification as a regulated investment company and avoid
liability for Federal income taxes, the Fund may be required to distribute
such income accrued with respect to these securities and may have to dispose
of portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
SIMULTANEOUS INVESTMENTS _ Investment decisions for the Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. However, if such other investment companies are prepared to
invest in, or desire to dispose of, Municipal Obligations or Taxable
Investments at the same time as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Page 7
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of September 30, 1995, The Dreyfus Corporation managed or administered
approximately $78 billion in assets for approximately 1.8 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's primary portfolio manager is Richard
J. Moynihan. He has held that position since the inception of the Fund and
has been employed by The Dreyfus Corporation since 1973. The Fund's other
portfolio managers are identified in the Statement of Additional Information.
The Dreyfus Corporation also provides research services for the Fund as well
as for other funds advised by The Dreyfus Corporation through a professional
staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$___ billion in assets as of September 30, 1995, including approximately $__
billion in proprietary mutual fund assets. As of September 30, 1995, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $___ billion in assets,
including approximately $___ billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .60 of 1% of
the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of the Fund, which would have the effect of lowering the
overall expense ratio of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The Fund will
not pay The Dreyfus Corporation at a later time for any amounts it may waive,
nor will the Fund reimburse The Dreyfus Corporation for any amounts it may
assume. For the fiscal year ended August 31, 1995, the Fund paid The Dreyfus
Corporation a monthly management fee at the effective annual rate of .59 of
1% of the value of the Fund's average daily net assets pursuant to a
settlement of litigation.
Pursuant to such settlement of litigation, effective October 14,
1988, The Dreyfus Corporation agreed, among other things, to make payments to
the Fund to reduce its management fee for a period of ten years from the
effective date of the settlement, in an amount ranging from $90,000 per year,
if the Fund's average daily net assets are between $1 billion and $2 billion,
to $1 million per year, if the Fund's average daily net assets are in excess
of $10 billion. No payments are required if the Fund's average daily net
assets are less than $1 billion.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers or others in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor's ultimate parent company is Boston Institutional Group, Inc.
Page 8
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Stock certificates are issued
only upon your written request. No certificates are issued for fractional
shares. It is not recommended that the Fund be used as a vehicle for Keogh,
IRA or other qualified plans. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of the Fund's Board, or
the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their Fund account, the minimum
initial investment is $50. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time. Fund
shares also are offered without regard to the minimum initial investment
requirements through Dreyfus-AUTOMATIC-Asset Builder, Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the Dreyfus
Step Program described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a conveni
ent way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor subseq
uent investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900051825/Dreyfus
Municipal Bond Fund, Inc., for purchase of Fund shares in your name. The wire
must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account registratio
n and dealer number, if applicable. If your initial purchase of Fund shares
is by wire, please call 1-800-645-6561 after completing your wire payment to
obtain your Fund account number. Please include your Fund account number on
the Fund's Account Application and promptly mail the Account Application to
the Fund, as no redemptions will be permitted until the Account Application
is received. You may obtain further information about remitting funds in this
man-
Page 9
ner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear. The
Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in The Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregated to determine the fee
payable with respect to each such purchase of Fund shares. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after the Transfer Agent receives an order in proper
form. Net asset value per share is determined as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. Net
asset value per share is computed by dividing the value of the Fund's net
assets (i.e., the value of its assets less liabilities) by the total number
of shares outstanding. The Fund's investments are valued each business day by
an independent pricing service approved by the Board of Directors and are
valued at fair value as determined by the pricing service. The pricing
service's procedures are reviewed under the general supervision of the Board
of Directors. For further information regarding the methods employed in
valuing Fund investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application
or have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES _ You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest
Page 10
to you. If you desire to use this service, please call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder Services
Form, also available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange instructions by
calling 1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. See "How to Redeem Fund Shares_Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Check
Redemption Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege, and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid with respect
to the foregoing categories of shares. To qualify, at the time of an exchange
you must notify the Transfer Agent. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No fees
currently are charged shareholders directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days' written
notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The availability of
Fund Exchanges may be modified or terminated at any time upon notice to
shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of other funds in the
Dreyfus Family of Funds of which you are currently an investor. The amount
you designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege may be modified
or cancelled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. See "Dividends, Distributions and Taxes." For more information
concerning this Privilege and the funds in the Dreyfus Family of Funds eligible
to participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
Page 11
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-Automatic Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-Automatic Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, and the
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS PAYROLL SAVINGS PLAN _ Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
DREYFUS STEP PROGRAM _ Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step
Program account, you must supply the necessary information on the Fund's
Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time.
DREYFUS DIVIDEND OPTIONS _ Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the
Page 12
Dreyfus Family of Funds of which you are a shareholder. Shares of the other
fund will be purchased at the then-current net asset value; however, a sales
load may be charged with respect to investments in shares of a fund sold with
a sales load. If you are investing in a fund that charges a sales load, you
may qualify for share prices which do not include the sales load or which
reflect a reduced sales load. See "Shareholder Services" in the Statement of
Additional Information. Dreyfus Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if any,
from the Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividends Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
Application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
HOW TO REDEEM FUND SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge their clients a
nominal fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK
REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE
Page 13
PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL
OWNERSHIP. Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account has a balance of 50
shares or less and remains so during the notice period.
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, the Check Redemption Privilege, or, if you have
checked the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form with the
Transfer Agent, through the Wire Redemption Privilege, the Telephone
Redemption Privilege or the Dreyfus TELETRANSFER Privilege. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. TheFund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you and
reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as requiring
a form of personal identification, to confirm that instructions are genuine
and, if it does not follow such procedures, the Fund or the Transfer Agent
may be liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
your shares by written request mailed to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP"), and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may request on the Account Application,
Shareholder Services Form or by later written request that the Fund provide
Redemption Checks drawn on the Fund's
Page 14
account. Redemption Checks may be made payable to the order of any person in
the amount of $500 or more. Potential fluctuations in the net asset value of
the Fund's shares should be considered in determining the amount of the check.
Redemption Checks should not be used to close your account. Redemption
Checks are free, but the Transfer Agent will impose a fee for stopping
payment of a Redemption Check upon your request or if the Transfer Agent
cannot honor the Redemption Check because of insufficient funds or other
valid reason. You should date your Redemption Checks with the current date
when you write them. Please do not postdate your Redemption Checks. If you do,
the Transfer Agent will honor, upon presentment, even if presented before
the date of the check, all postdated Redemption Checks which are dated within
six months of presentment for payment, if they are otherwise in good order.
Shares for which certificates have been issued may not be redeemed by
Redemption Check. This Privilege will be terminated immediately, without
notice, with respect to any account which is, or becomes, subject to backup
withholding on redemptions (see "Dividends, Distributions and Taxes"). Any
Redemption Check written on an account which has become subject to backup
withholding on redemptions will not be honored by the Transfer Agent.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day)made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire. Shares for which certificates have been issued
are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares for which certificates have been issued are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE _ You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be so
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. Shares issued in certificate form are not eligible for this
Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary
of The Dreyfus Corporation, an amount not to exceed an annual rate of .25
of 1% of the value of the Fund's average daily net assets for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts.
Page 15
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. Fund shares begin
earning dividends on the day following the date of purchase. Dividends
usually are paid on the last business day of each month and are reinvested in
additional Fund shares at net asset value or, at your option, paid in cash.
The Fund's earnings for Saturdays, Sundays and holidays are declared as
dividends on the next business day. If you redeem all shares in your account
at any time during the month, all dividends to which you are entitled will be
paid to you along with the proceeds of the redemption. If you are an omnibus
accountholder and indicate in a partial redemption request that a portion of
any accrued dividends to which such account is entitled belongs to an
underlying accountholder who has redeemed all shares in his or her account,
such portion of the accrued dividends will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities gains,
if any, generally are declared and paid once a year, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the provis
ions of the 1940 Act. The Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any, have been utilized
or have expired. You may choose whether to receive distributions in cash or
to reinvest in additional Fund shares at net asset value. All expenses are
accrued daily and deducted before declaration of dividends to investors.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to
Federal income tax. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, are taxable as ordinary income whether or not
reinvested. No dividend paid by the Fund will qualify for the dividends
received deduction allowable to certain U.S. corporations. Distributions from
net realized long-term securities gains of the Fund generally are taxable as
long-term capital gains for Federal income tax purposes if you are a citizen
or resident of the United States. The Code provides that the net capital gain
of an individual generally will not be subject to Federal income tax at a
rate in excess of 28%. Under the Code, interest on indebtedness incurred or
continued to purchase or carry Fund shares which is deemed to relate to
exempt-interest dividends is not deductible.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private activity
bonds, the interest from which may be (i) a preference item for purposes of
the alternative minimum tax, (ii) a component of the "adjusted current
earnings" preference item for purposes of the corporate alternative minimum
tax as well as a component in computing the corporate environmental tax or
(iii) a factor in determining the extent to which a shareholder's Social
Security benefits are taxable. If the Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized by the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Page 16
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth
the dollar amount of income exempt from Federal tax and the dollar amount, if
any, subject to Federal tax. These dollar amounts will vary depending on the
size and length of time of your investment in the Fund. If the Fund derives
dividends from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividends or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines that a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended August 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interest of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. In
addition, the Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, tax equivalent yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment income
per share over a 30-day period, expressed as a percentage of the net asset
value per share at the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that 30-day
period, computed in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a second six-month
period which, when added to the result for the first six months, provides an
"annualized" yield for an entire one-year period. Calculations of the Fund's
current yield may reflect absorbed expenses pursuant to any undertaking that
may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
current yield calculated as described above.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased with an
initial payment of $1,000 and that the investment was redeemed at the end of
a stated period of time, after giving effect to the reinvestment of dividends
and
Page 17
distributions during the period. The return is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total return
for one, five and ten year periods.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from CDA
Technologies, Inc., Lipper Analytical Services, Inc., Moody's Bond Survey
Bond Index, Lehman Brothers Municipal Bond Index, Morningstar, Inc. and other
industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on July 12, 1976, and
commenced operations on October 4, 1976. On January 22, 1993 the Fund's name
was changed from Dreyfus Tax Exempt Bond Fund, Inc. to Dreyfus Municipal Bond
Fund, Inc. The Fund is authorized to issue 600 million shares of Common
Stock, par value $.01 per share. Each share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Fund's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require
the Fund to hold a special meeting of shareholders for purposes of removing a
Director from office and the holders of at least 25% of such shares may
require the Fund to hold a special meeting of shareholders for any other
purpose. Fund shareholders may remove a Director by the affirmative vote of a
majority of the Fund's outstanding voting shares. In addition, the Board of
Directors will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors then holding
office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call 1-718-895-1206; outside of the U.S.
and Canada, call 516-794-5452.
Page 18
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY _ The Fund is permitted to borrow to the extent permitted
under the 1940 Act, which permits an investment company to borrow in an
amount up to 33-1/3% of the value of such company's total assets. The Fund
currently intends to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the Fund's total assets, the Fund will
not make any additional investments.
USE OF DERIVATIVES _ Although the Fund will not be a commodity pool,
Derivatives subject the Fund to the rules of the Commodity Futures Trading
Commission which limit the extent to which the Fund can invest in certain
Derivatives. The Fund may invest in futures contracts and options with
respect thereto for hedging purposes without limit. However, the Fund may not
invest in such contracts and options for other purposes if the sum of the
amount of initial margin deposits and premiums paid for unexpired options
with respect to such contracts, other than for bona fide hedging purposes,
exceed 5% of the liquidation value of the Fund's assets, after taking into
account unrealized profits and unrealized losses on such contracts and
options; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5% limitation.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund may write
(i.e., sell) covered call and put option contracts to the extent of 20% of
the value of its net assets at the time such option contracts are written.
When required by the Securities and Exchange Commission, the Fund will set
aside permissible liquid assets in a segregated account to cover its
obligations relating to its purchase of Derivatives. To maintain this require
d cover, the Fund may have to sell portfolio securities at disadvantageous
prices or times since it may not be possible to liquidate a Derivative
position at a reasonable price.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its Derivatives
were poorly correlated with its other investments, or if the Fund were unable
to liquidate its position because of an illiquid secondary market. The market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
LENDING PORTFOLIO SECURITIES _ The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. In connection with such
loans, the Fund continues to be entitled to payments in amounts equal to the
interest, dividends or other distributions payable on the loaned securities.
Loans of portfolio securities afford the Fund an opportunity to earn interest
on the amount of the loan and at the same time to earn income on the loaned
securities' collateral. Loans of portfolio securities may not exceed 331/3%
of the value of the Fund's total assets. In connection with such loans, the
Fund will receive collateral consisting of cash, U.S. Government securities
or irrevocable letters of credit which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. Such loans are terminable by the Fund at any time upon specified
notice. TheFund might experience risk of loss if the institution with which
it has engaged in a portfolio loan transaction breaches its agreement with
the Fund.
FORWARD COMMITMENTS _ The Fund may Municipal Obligations and other
securities on a forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date of the
commitment to purchase. The payment obligation and the interest rate that
will be
Page 19
received on a forward commitment or when-issued security are fixed at
the time the Fund enters into the commitment. However, the Fund does not make
a payment until it receives delivery from the other party to the transaction.
The Fund will make commitments to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. A segregated
account of the Fund consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least equal at all
times to the amount of the commitments will be established and maintained at
the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS _ The Fund may purchase floating and variable
rate demand notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess of one year, but which permit the holder
to demand payment of principal at any time, or at specified intervals.
Variable rate demand notes include master demand notes which are obligations
that permit the Fund to invest fluctuating amounts, at varying rates of
interest, pursuant to direct arrangements between the Fund, as lender, and
the borrower. These obligations permit daily changes in the amount borrowed.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit
support arrangements, the Fund's right to redeem is dependent on the ability
of the borrower to pay principal and interest on demand. Each obligation
purchased by the Fund will meet the quality criteria established for the
purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS _ The Fund may purchase from financial
institutions participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to
the total principal amount of the Municipal Obligation. These instruments may
have fixed, floating or variable rates of interest. If the participation
interest is unrated, it will be backed by an irrevocable letter of credit or
guarantee of a bank that the Board of Directors has determined meets the
prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
TENDER OPTION BONDS _ The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a
fixed rate substantially higher than prevailing short-term tax exempt rates,
that has been coupled with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face value
thereof. As consideration for providing the option, the financial institution
receives periodic fees equal to the difference between the Municipal
Obligation's fixed coupon rate and the rate, as determined by a remarketing
or similar agent at or near the commencement of such period, that would cause
the securities, coupled with the tender option, to trade at par on the date
of such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the Fund,
will consider on an ongoing basis the creditworthiness of the issuers of the
underlying Municipal Obligations, of any custodian and of the third party
provider of the tender option. In certain instances and for certain tender
option bonds, the option
Page 20
may be terminable in the event of a default in payment of principal or
interest on the underlying Municipal Obligations and for other reasons.
CUSTODIAL RECEIPTS _ The Fund may purchase custodial receipts representing
the right to receive certain future principal and interest payments on
Municipal Obligations which underlie the custodial receipts. A number of
different arrangements are possible. In a typical custodial receipt
arrangement, an issuer or a third party owner of Municipal Obligations
deposits such obligations with a custodian in exchange for two classes of
custodial receipts. The two classes have different characteristics, but, in
each case, payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the characteristics of a
typical auction mechanism. This class's interest rate generally is expected
to be below the coupon rate of the underlying Municipal Obligations and
generally is at a level comparable to that of a Municipal Obligation of
similar quality and having a maturity equal to the period between interest
rate adjustments. The second class bears interest at a rate that exceeds the
interest rate typically borne by a security of comparable quality and
maturity; this rate also is adjusted, but in this case inversely to changes
in the rate of interest of the first class. If the interest rate on the first
class exceeds the coupon rate of the underlying Municipal Obligations, its
interest rate will exceed the rate paid on the second class. In no event will
the aggregate interest paid with respect to the two classes exceed the
interest paid by the underlying Municipal Obligations. The value of the
second class and similar securities should be expected to fluctuate more than
the value of a Municipal Obligation of comparable quality and maturity and
their purchase by the Fund should increase the volatility of its net asset
value and, thus, its price per share. These custodial receipts are sold in
private placements. The Fund also may purchase directly from issuers, and not
in a private placement, Municipal Obligations having characteristics similar
to custodial receipts. These securities may be issued as part of a
multi-class offering and the interest rate on certain classes may be subject
to a cap or floor.
STAND-BY COMMITMENTS _ The Fund may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to repurchase, at the
Fund's option, specified securities at a specified price and, in this
respect, stand-by commitments are comparable to put options. The exercise of
a stand-by commitment, therefore, is subject to the ability of the seller to
make payment on demand. The Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. The Fund may pay for stand-by commitments if
such action is deemed necessary, thus increasing to a degree the cost of the
underlying Municipal Obligation and similarly decreasing such security's
yield to investors. The Fund also may acquire call options on specific
Municipal Obligations. The Fund generally would purchase these call options
to protect the Fund from the issuer of the related Municipal Obligation
redeeming, or other holder of the call option from calling away, the
Municipal Obligation before maturity. The sale by the Fund of a call option
that it owns on a specific Municipal Obligation could result in the receipt
of taxable income by the Fund.
ZERO COUPON SECURITIES _ The Fund may invest in zero coupon securities which
are debt securities issued or sold at a discount from their face value which
do not entitle the holder to any periodic payment of interest prior to
maturity or a specified redemption date (or cash payment date). The amount of
the discount varies depending on the time remaining until maturity or cash
payment date, prevailing interest rates, liquidity of the security and
perceived credit quality of the issuer. Zero coupon securities also may take
the form of debt securities that have been stripped of their unmatured
interest coupons, the coupons themselves and receipts or certificates
representing interest in such stripped debt obligations and coupons. The
market prices of zero coupon securities generally are more volatile than the
market prices of interest-bearing securities and are likely to respond to a
greater degree to changes in interest rates than interest-bearing securities
having similar maturities and credit qualities. The Fund may invest up to 5%
of its net assets in zero coupon bonds which are rated below investment
grade. See
Page 21`
"Description of the Fund - Investment Considerations and Risks,"
and "Investment Objective and Management Policies-Investment Considerations
and Risks-Lower Rated Bonds" and "Dividends, Distributions and Taxes" in the
Statement of Additional Information.
ILLIQUID SECURITIES _ The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price that the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
TAXABLE INVESTMENTS _ From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the
Fund's net assets) or for temporary defensive purposes, the Fund may invest
in taxable short-term investments ("Taxable Investments") consisting of:
notes of issuers having, at the time of purchase, a quality rating within the
three highest grades of Moody's, S&P or Fitch; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper rated not
lower than P-l by Moody's, A-l by S&P or F-l by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic banks,
with assets of one billion dollars or more; time deposits; bankers'
acceptances and other short-term bank obligations; and repurchase agreements
in respect of any of the foregoing. Dividends paid by the Fund that are
attributable to income earned by the Fund from Taxable Investments will be
taxable to investors. See "Dividends, Distributions and Taxes." Except for
temporary defensive purposes, at no time will more than 20% of the value of
the Fund's net assets be invested in Taxable Investments. Under normal market
conditions, the Fund anticipates that not more than 5% of its total assets
will be invested in any one category of Taxable Investments. Taxable
Investments are more fully described in the Statement of Additional
Information, to which reference hereby is made.
RATINGS _ Bonds rated Ba by Moody's are judged to have speculative elements;
their future cannot be considered as well assured and often the protection of
interest and principal payments may be very moderate. Bonds rated BB by S&P
are regarded as having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. Bonds
rated BB by Fitch are considered speculative and the payment of principal and
interest may be affected at any time by adverse economic changes. Bonds rated
C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in default
and the payment of interest and/or repayment of principal is in arrears.
Bonds rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the issuer; DDD represents
the highest potential for recovery of such bonds; and D represents the lowest
potential for recovery. Such bonds, though high yielding, are characterized
by great risk. See "Appendix" in the Statement of Additional Information for
a general description of Moody's, S&P and Fitch ratings of Municipal
Obligations.
The ratings of Moody's, S&P and Fitch represent their opinions as to
the quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
bonds. Therefore, although these ratings may be an initial criterion for
selection of portfolio investments, The Dreyfus Corporation also will evaluate
these securities and the ability of the issuers of such securities to pay
interest and principal. The Fund's ability to achieve its investment
objective may be more dependent on The Dreyfus Corporation's credit
Page 22
analysis than might be the case for a fund that invested in higher rated
securities. Once the rating of a portfolio security has been changed, the
Fund will consider all circumstances deemed relevant in determining whether
to continue to hold the security.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 23
DREYFUS
Municipal
Bond Fund, Inc.
Prospectus
(LION LOGO)
Registration Mark
Copy Rights 1995, Dreyfus Service Corporation
054p19122995
__________________________________________________________________________
DREYFUS MUNICIPAL BOND FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
DECEMBER 29, 1995
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Municipal Bond Fund, Inc. (the "Fund"), dated December 29,
1995, as it may be revised from time to time. To obtain a copy of the
Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call the following numbers:
Outside New York State--Call Toll Free 1-800-645-6561
In New York City--Call 1-718-895-1206
Ouside the U.S. and Canada--Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . . .B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . .B-12
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .B-15
Shareholder Services Plan. . . . . . . . . . . . . . . . . . . . . . . .B-17
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . .B-18
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . .B-19
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . .B-21
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . .B-23
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .B-24
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . .B-25
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . .B-26
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . .B-28
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . . . . . . . .B-28
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-29
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .B-38
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . .B-63
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
Portfolio Securities
The average distribution of investments (at value) in Municipal
Obligations (including notes) by ratings for the fiscal year ended August
31, 1995, computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
Fitch Investors Moody's Standard &
Services, Inc. Investors Service, Poor's Corporation Percentage
("Fitch") and/or Inc. ("Moody's") and/or ("S&P") of Value
---------------- ------------------ ------------------- ----------
<S> <C> <C> <C>
AAA Aaa AAA 24.8%
AA Aa AA 27.9
A A A 17.9
BBB Baa BBB 18.5
BB Ba BB .7
F-1, F-1+(1) MIG 1, P1 (1) SP-1, A-1 (1) 4.2
Not Rated Not Rated Not Rated 6.0 (2)
-----
100.0%
======
</TABLE>
_______________________________
(1) Included in these categories are tax exempt notes rated within the
two highest grades by Fitch, Moody's or S&P. Therefore, these
securities, together with Municipal Obligations rated A or better by
Fitch, Moody's or S&P, are taken into account at the time of a
purchase to ensure that the Fund's portfolio meets the 75% minimum
quality standard discussed in the Fund's Prospectus.
(2) Included in the Not Rated category are securities comprising 6.0% of
the Fund's market value which, while not rated, have been determined
by the Manager to be of comparable quality to securities in the
following rating categories: Aaa/AAA (.8%), Aa/AA (.1%), A/A (1.0%),
Baa/BBB (3.9%), B/B (.1%) and F-1, F-1+/MIG 1, P-1/SP-1, A-1 (.1%).
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity or sewage or solid waste disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time, or at
specified intervals. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act
of 1940, as amended (the "1940 Act"), the identification of the issuer of
Municipal Obligations depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the
non-governmental user, then such non-governmental user would be deemed to
be the sole issuer. If, however, in either case, the creating government
or some other entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue of such
government or other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. The staff of
the Securities and Exchange Commission currently considers certain lease
obligations to be illiquid. Determination as to the liquidity of such
securities is made in accordance with guidelines established by the Fund's
Board. Pursuant to such guidelines, the Board has directed the Manager to
monitor carefully the Fund's investment in such securities with particular
regard to (1) the frequency of trades and quotes for the lease obligation;
(2) the number of dealers willing to purchase or sell the lease obligation
and the number of other potential buyers; (3) the willingness of dealers
to undertake to make a market in the lease obligation; (4) the nature of
the marketplace trades including the time needed to dispose of the lease
obligation, the method of soliciting offers and the mechanics of transfer;
and (5) such other factors concerning the trading market for the lease
obligation as the Manager may deem relevant. In addition, in evaluating
the liquidity and credit quality of a lease obligation that is unrated,
the Fund's Board has directed the Manager to consider (a) whether the
lease can be cancelled; (b) what assurance there is that the assets
represented by the lease can be sold; (c) the strength of the lessee's
general credit (e.g., its debt, administrative, economic, and financial
characteristics); (d) the likelihood that the municipality will
discontinue appropriating funding for the leased property because the
property is no longer deemed essential to the operations of the
municipality (e.g., the potential for an "event of nonappropriation"); (e)
the legal recourse in the event of failure to appropriate; and (f) such
other factors concerning credit quality as the Manager may deem relevant.
The Fund will not invest more than 15% of the value of its net assets in
lease obligations that are illiquid and in other illiquid securities.
Accordingly, not more than 15% of the value of the Fund's net assets will
be invested in lease obligations that are illiquid and in other illiquid
securities.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund. Based
on the tender option bond agreement, the Fund expects to be able to value
the tender option bond at par; however, the value of the instrument will
be monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the extent
that the ratings given by Moody's, S&P or Fitch for Municipal Obligations
may change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
its investments in accordance with the investment policies contained in
the Prospectus and this Statement of Additional Information. The ratings
of Moody's, S&P and Fitch represent their opinions as to the quality of
the Municipal Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and are not
absolute standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments, the Manager also will
evaluate these securities.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain restricted securities held by the
Fund, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board of Directors.
Because it is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the Fund's Board
of Directors has directed the Manager to monitor carefully the Fund's
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information.
To the extent that for a period of time, qualified institutional buyers
cease purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level
of illiquidity in the Fund's portfolio during such period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home
Loan Banks, by the right of the issuer to borrow from the U.S. Treasury;
others, such as those issued by the Federal National Mortgage Association,
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies or instrumentalities,
no assurance can be given that it will always do so, since it is not so
obligated by law.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. The Fund's
custodian or sub-custodian will have custody of, and will hold in a
segregated account, securities acquired by the Fund under a repurchase
agreement. Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Fund. In an attempt
to reduce the risk of incurring a loss on a repurchase agreement, the Fund
will enter into repurchase agreements only with domestic banks with total
assets in excess of one billion dollars or primary government securities
dealers reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. Repurchase agreements could
involve risks in the event of a default or insolvency of the other party
to the agreement, including possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities.
Management Policies
Derivatives. The Fund may invest in Derivatives (as defined in the
Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide
a cheaper, quicker or more specifically focused way for the Fund to invest
than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit the Fund to increase,
decrease or change the level of risk to which its portfolio is exposed in
much the same way as the Fund can increase, decrease or change the risk of
its portfolio by making investments in specific securities.
When required by the Securities and Exchange Commission, the Fund
will set aside permissible liquid assets in a segregated account to cover
its obligations relating to its purchase of Derivatives. To maintain this
required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate
a Derivative position at a reasonable price. Derivatives may be purchased
on established exchanges or through privately negotiated transactions
referred to as over-the-counter Derivatives. Exchange-traded Derivatives
generally are guaranteed by the clearing agency which is the issuer or
counterparty to such Derivatives. This guarantee usually is supported by
a daily payment system (i.e., margin requirements) operated by the
clearing agency in order to reduce overall credit risk. As a result,
unless the clearing agency defaults, there is relatively little
counterparty credit risk associated with Derivatives purchased on an
exchange. By contrast, no clearing agency guarantees over-the-counter
Derivatives. Therefore, each party to an over-the-counter Derivative
bears the risk that the counterparty will default. Accordingly, the
Manager will consider the creditworthiness of counterparties to over-the-
counter Derivatives in the same manner as it would review the credit
quality of a security to be purchased by the Fund. Over-the-counter
Derivatives are less liquid than exchange-traded Derivatives since the
other party to the transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding for it.
Futures Transactions--In General. The Fund may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade.
Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets. Although the
Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once
the daily limit has been reached in a particular contract, no trades may
be made that day at a price beyond that limit or trading may be suspended
for specified periods during the trading day. Futures contract prices
could move to the limit for several consecutive trading days with little
or no trading, thereby preventing prompt liquidation of futures positions
and potentially subjecting the Fund to substantial losses.
Successful use of futures by the Fund also is subject to the ability
of the Manager to predict correctly movements in the direction of the
relevant market and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract.
For example, if the Fund uses futures to hedge against the possibility of
a decline in the market value of securities held in its portfolio and the
prices of such securities instead increase, the Fund will lose part or all
of the benefit of the increased value of securities which it has hedged
because it will have offsetting losses in its futures positions.
Furthermore, if in such circumstances the Fund has insufficient cash, it
may have to sell securities to meet daily variation margin requirements.
The Fund may have to sell such securities at a time when it may be
disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, the Fund may be required to segregate cash or
high quality money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect of
limiting a Fund's ability otherwise to invest those assets.
Specific Futures Transactions. The Fund may purchase and sell
interest rate futures contracts. An interest rate future obligates the
Fund to purchase or sell an amount of a specific debt security at a future
date at a specific price.
Options--In General. The Fund may purchase and write (i.e., sell)
call or put options with respect to specific securities. A call option
gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security or securities at the exercise
price at any time during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option the right to
sell, and obligates the writer to buy, the underlying security or
securities at the exercise price at any time during the option period.
A covered call option written by the Fund is a call option with
respect to which the Fund owns the underlying security or otherwise covers
the transaction by segregating cash or other securities. A put option
written by the Fund is covered when, among other things, cash or liquid
securities having a value equal to or greater than the exercise price of
the option are placed in a segregated account with the Fund's custodian to
fulfill the obligation undertaken. The principal reason for writing
covered call and put options is to realize, through the receipt of
premiums, a greater return than would be realized on the underlying
securities alone. The Fund receives a premium from writing covered call
or put options which it retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain of the clearing facilities
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading
halts or suspensions in one or more options. There can be no assurance
that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it
might not be possible to effect closing transactions in particular
options. If, as a covered call option writer, the Fund is unable to
effect a closing purchase transaction in a secondary market, it will not
be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise or it otherwise covers its
position.
Future Developments. The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other Derivatives which are not presently contemplated for use by
the Fund or which are not currently available but which may be developed,
to the extent such opportunities are both consistent with the Fund's
investment objective and legally permissible for the Fund. Before
entering into such transactions or making any such investment, the Fund
will provide appropriate disclosure in its Prospectus or Statement of
Additional Information.
Forward Commitments. Municipal obligations and other securities
purchased on a forward commitment or when-issued basis are subject to
changes in value (generally changing in the same way, i.e., appreciating
when interest rates decline and depreciating when interest rates rise)
based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may
expose the Fund to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued
basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.
Lending Portfolio Securities. In connection with its securities
lending transactions, the Fund may return to the borrower or a third party
which is unaffiliated with the Fund, and which is acting as a "placing
broker," a part of the interest earned from the investment of collateral
received from securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value
of the securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Investment Considerations and Risks
Lower Rated Bonds. The Fund is permitted to invest in securities
rated below Baa by Moody's and below BBB by S&P and Fitch (collectively,
the "Rating Agencies"). Such bonds, though high yielding, are
characterized by risk. See in the Prospectus "Description of the
Fund--Investment Considerations and Risks--Lower Rated Bonds" for a
discussion of certain risks and "Appendix" in the Statement of Additional
Information for a general description of the Rating Agencies' ratings of
Municipal Obligations. Although ratings may be useful in evaluating the
safety of the interest and principal payments, they do not evaluate the
market value risk of these bonds. The Fund will rely on the Manager's
judgment, analysis and experience in evaluating the creditworthiness of an
issuer.
Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities. These bonds are considered by the Rating Agencies to
be, on balance, predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in
the higher rating categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally
is not as liquid as the secondary market for higher rated securities. The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues
when necessary to meet the Fund's liquidity needs or in response to a
specific economic event such as a deterioration in the creditworthiness of
the issuer. The lack of a liquid secondary market for certain securities
also may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and calculating
net asset value. Adverse publicity and investor perceptions, whether or
not based on fundamental analysis, may decrease the values and liquidity
of these securities. In such cases, judgment may play a greater role in
valuation because less reliable, objective data may be available.
These bonds may be particularly susceptible to economic downturns.
It is likely that an economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default of such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The
Fund has no arrangement with any persons concerning the acquisition of
such securities, and the Manager will review carefully the credit and
other characteristics pertinent to such new issues.
Lower rated zero coupon securities and pay-in-kind bonds, in which
the Fund may invest up to 5% of the value its net assets, involve special
considerations. The credit risk factors pertaining to lower rated
securities also apply to lower rated zero coupon bonds and pay-in-kind
bonds. Such zero coupon, pay-in-kind or delayed interest bonds carry an
additional risk in that, unlike bonds which pay interest throughout the
period to maturity, the Fund will realize no cash until the cash payment
date unless a portion of such securities are sold and, if the issuer
defaults, the Fund may obtain no return at all on its investment. See
"Dividends, Distributions and Taxes."
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 8 as fundamental policies, which cannot be
changed without approval by the holders of a majority (as defined in the
1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 9 through 14 are not fundamental policies and may be
changed by vote of a majority of the Directors at any time. The Fund may
not:
1. Invest more than 5% of its assets in the obligations of any
single issuer, except that up to 25% of the value of the Fund's total
assets may be invested, and securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities may be purchased, without
regard to any such limitation.
2. Hold more than 10% of the voting securities of any single
issuer. This Investment Restriction applies only with respect to 75% of
the Fund's total assets.
3. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no limitation
on the purchase of Municipal Obligations and, for temporary defensive
purposes, obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
4. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this investment restriction,
the entry into options, forward contracts, futures contracts, including
those relating to indices, and options on futures contracts or indices
shall not constitute borrowing.
5. Purchase or sell real estate, commodities or commodity
contracts, or oil and gas interests, but this shall not prevent the Fund
from investing in Municipal Obligations secured by real estate or interest
therein, or prevent the Fund from purchasing and selling options, forward
contracts, futures contracts, including those relating to indices, and
options on futures contracts or indices.
6. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take
advantage of the lower purchase price available, and except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.
7. Make loans to others except through the purchase of debt
obligations and the entry into repurchase agreements; however, the Fund
may lend its portfolio securities in an amount not to exceed 33-1/3% of
the value of its total assets. Any loans of portfolio securities will be
made according to guidelines established by the Securities and Exchange
Commission and the Fund's Board of Directors.
8. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent that the activities permitted
in Investment Restrictions numbered 4, 5 and 12 may be deemed to give rise
to a senior security.
9. Sell securities short or purchase securities on margin, but the
Fund may make margin deposits in connection with transactions in futures
contracts, including those relating to indices, and options on futures
contracts or indices.
10. Purchase securities other than Municipal Obligations and Taxable
Investments and those arising out of transactions in futures and options
or as otherwise provided in the Fund's Prospectus.
11. Invest in securities of other investment companies, except to
the extent permitted under the 1940 Act.
12. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements with respect to
options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
13. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid (which securities could include participation interests
(including municipal lease/purchase agreements) that are not subject to
the demand feature described in the Fund's Prospectus, and floating and
variable rate demand obligations as to which the Fund cannot exercise the
demand feature described in the Fund's Prospectus on less than seven days'
notice and as to which there is no secondary market) if, in the aggregate,
more than 15% of its net assets would be so invested.
14. Invest in companies for the purpose of exercising control.
For purposes of Investment Restriction No. 3, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry."
If a percentage restriction is adhered to at the time of an
investment, a later increase in percentage resulting from a change in
values or assets will not constitute a violation of that restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the 1940 Act, is indicated by an asterisk.
Directors of the Fund
*DAVID W. BURKE, Director. Consultant to the Manager since August, 1994.
From October 1990 to August, 1994, Vice President and Chief
Administrative Officer of the Manager. From 1977 to 1990, Mr. Burke
was involved in the management of national television news, as Vice
President and Executive Vice President of ABC News, and subsequently
as President of CBS News. He is 58 years old and his address is 200
Park Avenue, New York, New York 10166.
HODDING CARTER, III, Director. President of MainStreet, a television
production company. Since 1991, a syndicated columnist for United
Media-NEA. From 1985 to 1986, he was editor and chief correspondent
of "Capitol Journal," a weekly Public Broadcasting System ("PBS")
series on Congress. From 1981 to 1984, he was anchorman and chief
correspondent for PBS's "Inside Story," a regularly scheduled
half-hour critique of press performance. From 1977 to July 1980, Mr.
Carter served as Assistant Secretary of State for Public Affairs and
as Department of State spokesman. He is 59 years old and his address
is MainStreet, 918 Sixteenth Street, N.W., Washington, D.C. 20006.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and, until
August 24, 1994, the Fund's distributor. From August 1994 to ecember
31, 1994, he was a director of Mellon Bank Corporation. He is
Chairman of the Board of Noel Group, Inc., a venture capital company;
a trustee of Bucknell University; and a director of the Muscular
Dystrophy Association, HealthPlan Services Corporation, Belding
Heminway, Inc., a manufacturer and marketer of industrial threads,
specialty yarns, home furnishings, and fabrics, Curtis Industries,
Inc., a national distributor of security products, chemicals and
automotive and other hardware, and Simmons Outdoor Corporation and
Staffing Resources, Inc. He is 52 years old and his address is 200
Park Avenue, New York, New York 10166.
EHUD HOUMINER, Director. Since July 1991, Professor and Executive-in-
Residence at the Columbia Business School, Columbia University. From
1992 to 1995 he was a Consultant to Bear, Stearns & Co. Inc.,
investment bankers. He was President and Chief Executive Officer of
Philip Morris USA, manufacturers of consumer products, from December
1988 until September 1990. He also is a Director of Avnet Inc. He
is 55 years old and his address is c/o Columbia Business School,
Columbia University, Uris Hall, Room 526, New York, New York 10027.
RICHARD C. LEONE, Director. President of The Twentieth Century Fund, a
tax exempt research foundation engaged in economic, political and
social policy studies. Since April 1990, Chairman, and since April
1988, a Commissioner of The Port Authority of New York and New
Jersey. A member in 1985, and from January 1986 to January 1989,
Managing Director of Dillon, Read & Co. Inc. and from May 1982 to
December 1984, President of Atlantic Inc., a wholly-owned subsidiary
of Amerada Hess Corporation. Mr. Leone is also a director of
Resource Mortgage Capital, Inc. He is 55 years old and his address
is 41 East 70th Street, New York, New York 10021.
HANS C. MAUTNER, Director. Chairman, Trustee and Chief Executive Officer
of Corporate Property Investors, a real estate investment company.
Since January 1986, a Director of Julius Baer Investment Management,
Inc., a wholly-owned subsidiary of Julius Baer Securities, Inc. He
is 58 years old and his address is 305 East 47th Street, New York,
New York 10017.
ROBIN A. SMITH, Director. Since 1993, Vice President, and from March 1992
to October 1993, Executive Director, of One to One Partnership, Inc.,
a national non-profit organization that seeks to promote mentoring
and economic empowerment for at-risk youths. From June 1986 to
February 1992, she was an investment banker with Goldman, Sachs, &
Co. She is also a Trustee of Westover School and a Board member of
the Jacobs A. Riis Settlement House and the High/Slop Education
Research Foundation. She is 32 years old and her address is 280 Park
Avenue, New York, New York 10010.
JOHN E. ZUCCOTTI, Director. President and Chief Executive Officer of
Olympia & York Companies (U.S.A.), and of member of its Board of
Directors since the inception of a Board on July 27, 1993. From 1986
to 1990, he was partner in the law firm of Brown & Wood and from 1978
to 1986 a partner in the law firm of Tufo & Zuccotti. First Deputy
Mayor of the City of New York from December 1975 to June 1977, and
Chairman of the City Planning Commission for the City of New York
from 1973 to 1975. Mr. Zuccotti is also a director of Empire Blue
Cross & Blue Shield, Catellus Development Corporation, a real estate
development corporation, and Starrett Housing Corporation, a
construction, development and management of real estate properties
corporation. He is 58 years old and his address is 237 Park Avenue,
New York, New York 10017.
For so long as the Fund's Plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members of the
Fund who are not "interested persons" (as defined in the 1940 Act) will be
selected and nominated by the Board members who are not "interested
persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a
per meeting fee and reimburses them for their expenses. The Chairman of
the Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee
of one-half the amount paid to them as Board members. The aggregate
amount of compensation paid to each Board member by the Fund for the
fiscal year ended August 31, 1995, and by all other funds in the Dreyfus
Family of Funds for which such person is a Board member (the number of
which is set forth in parenthesis next to each Board member's total
compensation) for the year ended December 31, 1994, is as follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund* Fund's Expenses Retirement Board Member
------------- ------------------ -------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
David W. Burke $6,000 none none $ 27,898 (52)
Hodding Carter, III $6,500 none none $ 33,625 (7)
Joseph S. DiMartino $4,530 none none $362,400 ** (93)
Ehud Houminer $6,500 none none $ 25,701 (11)
Richard C. Leone $6,500 none none $ 33,125 (7)
Hans C. Mautner $6,000 none none $ 33,625 (7)
Robin A. Smith $2,899 none none $ 30,000 ** (7)
John E. Zuccotti $6,500 none none $ 33,625 (7)
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $764 for all Directors as a group.
** Estimated amount for the year ending December 31, 1995.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., the ultimate parent company of which is Boston
Institutional Group, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President
and General Counsel of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
February 1992 to July 1994, he served as Counsel for The Boston
Company Advisors, Inc. From August 1990 to February 1992, he was
employed as an Associate at Ropes & Gray. He is 30 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was manager of the High Performance Fabric Division
of Springs Industries Inc. He is 33 years old.
JOSEPH S. TOWER,III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in
the Corporate Finance and Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was
Assistant Vice President in the Mutual Fund Accounting Department of
the Manager. He is 59 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts. She is 50 years old.
The address of each of the Fund's officers is 200 Park Avenue, New
York, New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's Common Stock outstanding on October 24, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") with the Fund dated August 24, 1994, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Directors who are not "interested
persons" (as defined in the 1940 Act) of the Fund or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such
approval. The Agreement was approved by shareholders on August 4, 1994.
The Agreement was last approved by the Fund's Board of Directors,
including a majority of the Directors who are not "interested persons" of
any party to the Agreement, at a meeting held on October 30, 1995. The
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board of Directors or by vote of the holders of a majority of the Fund's
outstanding voting shares or, on not less than 90 days' notice, by the
Manager. The Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Phillip L. Toia, Vice Chairman--Operations
and Administration and a director; Barbara E. Casey, Vice President--
Retirement Services; Diane M. Coffey, Vice President--Corporate
Communications; Elie M. Genadry, Vice President--Institutional Sales;
William F. Glavin, Jr., Vice President--Corporate Development; Henry D.
Gottmann, Vice President--Retail Sales and Services; Mark N. Jacobs, Vice
President--Legal and Secretary; Daniel C. Maclean, Vice President and
General Counsel; Jeffrey N. Nachman, Vice President--Mutual Fund
Accounting; Katherine C. Wickham, Vice President--Human Resources;
Maurice Bendrihem, Controller; Elvira Oslapas, Assistant Secretary;
and Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence
M. Greene, Julian M. Smerling and David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Directors. The Manager is responsible for investment
decisions and provides the Fund with portfolio managers who are authorized
by the Board of Directors to execute purchases and sales of securities.
The Fund's portfolio managers are Joseph P. Darcy, A. Paul Disdier, Karen
M. Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L.
Lawrence Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The
Manager also maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research services
for the Fund as well as for other funds advised by the Manager. All
purchases and sales are reported for the Directors' review at the meeting
subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include without limitation: taxes, interest,
loan commitment fees, interest and distributions paid on securities sold
short, brokerage fees and commissions, if any, fees of Directors who are
not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Manager, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory fees, charges
of custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of maintaining
corporate existence, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of
shareholders' reports and corporate meetings, costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders, and any
extraordinary expenses.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services, the Fund has agreed to
pay the Manager a monthly management fee at the annual rate of .60 of 1%
of the value of the Fund's average daily net assets. This amount is
reduced, pursuant to the terms of a Stipulation of Settlement of
Litigation, which became effective on October 15, 1988, by annual amounts
ranging from $90,000 per year to $1 million per year, depending on the
size of the Fund's average daily net assets, for a period of 10 years from
the effective date. The management fees paid for the fiscal years ended
August 31, 1993, 1994 and 1995 amounted to $26,589,276, $25,447,556 and
$22,188,564, respectively. The management fees for the fiscal years ended
August 31, 1993, 1994 and 1995 were reduced by $350,000 in each year
pursuant to the Stipulation of Settlement of Litigation. All fees and
expenses are accrued daily and deducted before the declaration of
dividends to investors.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% of the value of the Fund's average net
assets for the fiscal year, the Fund may deduct from the payment to be
made to the Manager under the Agreement, or the Manager will bear, such
excess expense. Such deduction or payment, if any, will be estimated,
reconciled and effected or paid, as the case may be, on a monthly basis.
During the fiscal year ended August 31, 1995, no expense reimbursements
were made pursuant to such limitation.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund reimburses Dreyfus Service Corporation for
certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the 1940
Act) of the Fund and have no direct or indirect financial interest in the
operation of the Plan by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan is subject to annual
approval by such vote of the Directors cast in person at a meeting called
for the purpose of voting on the Plan. The Plan is terminable at any time
by vote of a majority of the Directors who are not "interested persons"
and have no direct or indirect financial interest in the operation of the
Plan.
For the fiscal year ended August 31, 1995, $1,520,849 was chargeable
to the Fund under the Plan.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies. In some states, banks
or other institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time,
on any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for purchase
of Fund shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and signature-guaranteed. See "Redemption of Fund
Shares--Dreyfus TeleTransfer Privilege."
Transactions Through Securities Dealers. Fund shares may be
purchased and redeemed through securities dealers which may charge a
nominal transaction fee for such services. Some dealers will place the
Fund's shares in an account with their firm. Dealers also may require
that the customer invest more than the $1,000 minimum investment; the
customer not take physical delivery of share certificates; the customer
not request redemption checks to be issued in the customer's name;
fractional shares not be purchased; or other conditions. There are no
sales or service charges by the Fund or the Distributor although
investment dealers, banks and other financial institutions may make
reasonable charges to investors for their services. The services provided
and fees therefor are established by each institution acting independently
of the Fund. The Fund has been given to understand that these fees may be
charged for customer services including, but not limited to, same-day
investment of client funds; same-day access to client funds; advice to
customers about the status of their accounts, yield currently being paid
or income earned to date; provision of periodic account statements showing
security and money market positions; other services available from the
dealer, bank or other financial institution; and assistance with inquiries
related to their investments. Any such fees will be deducted monthly from
the investor's account, which on smaller accounts could constitute a
substantial portion of distributions. Small, inactive, long-term accounts
involving monthly service charges may not be in the best interest of
investors. Investors should be aware that they may purchase shares of the
Fund directly from the Fund without the imposition of any maintenance or
service charges, other than those already described herein.
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only to
the registered owner(s) of the account and only to the address of record.
The Account Application or later written request must be manually signed
by the registered owner(s). Checks may be made payable to the order of
any person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of shares in the
investor's account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check will be
returned to the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although election
of this Privilege creates only a shareholder-transfer agent relationship
with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the Transfer
Agent of the redemption request in proper form. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form, or to a correspondent bank if
the investor's bank is not a member of the Federal Reserve System. Fees
ordinarily are imposed by such bank and usually borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
--------------------- -------------------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have also selected the Dreyfus TeleTransfer Privilege, any request
for a wire redemption will be effected as a Dreyfus TeleTransfer
transaction through the Automated Clearing House ("ACH") system unless
more prompt transmittal specifically is requested. Redemption proceeds
will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any stock certificate representing
Fund shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP"), and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians, and may accept other
suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to signature-
guarantees, please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in
whole or in part in securities or other assets in case of an emergency or
any time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If
the recipient sold such securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of any funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of any funds purchased with a sales load, shares of any
funds acquired by a previous exchange from shares purchased with
a sales load, and additional shares acquired through
reinvestment of dividends or distributions of any such funds
(collectively referred to herein as "Purchased Shares") may be
exchanged for shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum
sales load that could have been imposed in connection with the
Purchased Shares (at the time the Purchased Shares were
acquired), without giving effect to any reduced loads, the
difference will be deducted.
To accomplish an exchange under item D above, shareholders must
notify the Transfer Agent of their prior ownership of fund shares and
their account number.
To request an exchange, an investor must give exchange instructions
to the Transfer Agent in writing or by telephone. The ability to issue
exchange instructions by telephone is given to all Fund sharholders
automatically, unless the investor checks the applicable "NO" box on the
Account Application, indicating that the investor specifically refuses
this Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares issued in certificate form are not
eligible for telephone exchanges.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and SEP-IRAs with only one
participant, the minimum initial investment is $750. To exchange shares
held in corporate plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is $100 if the plan has at
least $2,500 invested among the funds in the Dreyfus Family of Funds. To
exchange shares held in personal retirement plans, the shares exchanged
must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
Transaction. Shares held under IRA and other retirement plans are
eligible for this Privilege. Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. There is a service charge of $.50 for each
withdrawal check. Automatic Withdrawal may be terminated at any time by
the investor, the Fund or the Transfer Agent. Shares for which stock
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on their payment date the dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares
of other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of
other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of
other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect
to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon
redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Board of Directors. When, in the judgment of the Service,
quoted bid prices for investments are readily available and are
representative of the bid side of the market, these investments are valued
at the mean between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other
investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions. The Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations. The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Board of Directors. Expenses and
fees, including the management fee (reduced by the expense limitation, if
any), are accrued daily and are taken into account for the purpose of
determining the net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to
that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities
firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
The Fund's portfolio turnover rate for the fiscal years ended August
31, 1994 and 1995 was 36.25% and 51.55%, respectively. The Fund
anticipates that its annual portfolio turnover rate generally will not
exceed 100%, but the turnover rate will not be a limiting factor when the
Fund deems it desirable to sell or purchase securities. Therefore,
depending upon market conditions, the Fund's annual portfolio turnover
rate may exceed 100% in particular years.
The amount of the transactions during the fiscal year ended August
31, 1995 in newly issued debt instruments in fixed price public offerings
directed to an underwriter, underwriters in consideration of, among other
things, research services provided was $_________.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund has qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code"), for the fiscal year ended August 31, 1995, and the Fund
intends to continue to so qualify if such qualification is in the best
interests of its shareholders. As a regulated investment company, the
Fund will pay no Federal income tax on net investment income and net
realized capital gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable provisions of
the Code. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.
Any dividend or distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of his shares
below the cost of his investment. Such a distribution would be a return
on the investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus. In addition, the
Code provides that if a shareholder has not held his Fund shares for more
than six months (or such shorter period as the Internal Revenue Service
may prescribe by regulation) and has received an exempt-interest dividend
with respect to such shares, any loss incurred on the sale of such shares
will be disallowed to the extent of the exempt-interest dividend received.
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gains or losses. However, all or a portion of
any gains realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Code. In addition, all or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income
under Section 1258 of the Code. "Conversion transactions" are defined to
include certain forward, futures, options and "straddles" transactions,
transactions marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss the Fund realizes from
certain futures and options transactions will be treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. Gain or
loss will arise upon exercise or lapse of such futures and options as well
as from closing transactions. In addition, any such futures or options
remaining unexercised at the end of the Fund's taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain futures and
options transactions may be considered, for tax purposes, to constitute
"straddles." "Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, overrides or modifies the provisions of Section 1256 of the
Code. As such, all or a portion of any short- or long-term capital gain
from certain "straddle" transactions may be recharacterized to ordinary
income.
If the Fund were treated as entering into "straddles" by reason of
its engaging in certain futures or options transactions, such "straddles"
could be characterized as "mixed straddles" if the futures or options
transactions comprising a part of such "straddles" were governed by
Section 1256 of the Code. The Fund may make one or more elections with
respect to "mixed straddles." Depending on which election is made, if
any, the results to the Fund may differ. To the extent the "straddle"
rules apply to positions established by the Fund, losses realized by the
Fund will be deferred to the extent of unrealized gain in the offsetting
position. Moreover, as a result of the "straddle" and conversion
transaction rules, short-term capital losses on "straddle" positions may
be recharacterized as long-term capital losses, and long-term capital
gains may be treated as short-term capital gains or ordinary income.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders. For example, the
Fund could be required to take into account annually a portion of the
discount (or deemed discount) at which such securities were issued and to
distribute such portion in order to maintain its qualification as a
regulated investment company. In such case, the Fund may have to dispose
of securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Fund's current yield for the 30-day period ended August 31, 1995
was 5.42%. Current yield is computed pursuant to a formula which operates
as follows: The amount of the Fund's expenses accrued for the 30-day
period (net of reimbursements) is subtracted from the amount of the
dividends and interest earned (computed in accordance with regulatory
requirements) by the Fund during the period. That result is then divided
by the product of: (a) the average daily number of shares outstanding
during the period that were entitled to receive dividends, and (b) the net
asset value per share on the last day of the period less any undistributed
earned income per share reasonably expected to be declared as a dividend
shortly thereafter. The quotient is then added to 1, and that sum is
raised to the 6th power, after which 1 is subtracted. The current yield
is then arrived at by multiplying the result by 2.
Based upon a 1995 Federal income tax rate of 39.60%, the Fund's tax
equivalent yield for the 30-day period ended August 31, 1995 was 8.97%.
Tax equivalent yield is computed by dividing that portion of the current
yield (calculated as described above) which is tax exempt by 1 minus a
stated tax rate and adding the quotient to that portion, if any, of the
yield of the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of
the highest Federal marginal personal income tax rate presently in effect.
The tax equivalent figure, however, does not include the potential effect
of any state or local (including, but not limited to, county, district or
city) taxes, including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rate or yield.
Each investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
The Fund's average annual total return for the 1, 5 and 10 year
periods ended August 31, 1995 was 6.93%, 7.82% and 8.41%, respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.
The Fund's total return for the period from October 4, 1976
(commencement of operations) to August 31, 1995 was 254.05%. Total return
is calculated by subtracting the amount of the Fund's net asset value per
share at the beginning of a stated period from the net asset value per
share at the end of the period (after giving effect to the reinvestment of
dividends and distributions during the period), and dividing the result by
the net asset value per share at the beginning of the period.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and are not indicative of the
Fund's past or future performance.
Advertising materials for the Fund also may refer to or discuss then-
current or past economic conditions, developments and/or events, including
those relating to actual or proposed tax legislation, and may refer to
statistical or other information concerning trends relating to investment
companies, as compiled by industry associations such as the Investment
Company Institute.
From time to time, advertising materials for the Fund also may refer
to Morningstar ratings and related analysis supporting the rating.
From time to time, the Fund may advertise that it was established in
1976 as the first incorporated tax exempt fund, and may discuss historical
events and circumstances surrounding its formation. As of August 31,
1995, there were approximately $3.9 billion of net assets invested in tax
exempt funds throughout the investment company industry.*
_________________________________________
*** Source: Lipper Analytical Services, Inc.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
portfolio securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of Common Stock being sold pursuant to the Fund's
Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature of and provisions
of the obligation; and (3) protection afforded by, and relative position
of, the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree.
A
Principal and interest payments on bonds in this category are
regarded as safe. This rating describes the third strongest capacity for
payment of debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local
economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse
circumstances, any one such weakness might impair the ability of the
issuer to meet debt obligations at some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management
performance appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of
debt service. The difference between "A" and "BBB" rating is that the
latter shows more than one fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only one deficiency among
the factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the
pledged revenues could show substantial variations, with the revenue flow
possibly being subject to erosion over time. Basic security provisions
are no more than adequate. Management performance could be stronger.
BB, B, CCC, CC, C
Debt rated BB, B, CCC, CC and C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation and C the
highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic
conditions to meet timely payments of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
C
The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus designation to show relative standing
within the major ratings categories.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+)
designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
Commercial Paper Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation. Capacity for timely payment on
issues with an A-2 designation is strong. However, the relative degree of
safety is not as high as for issues designated A-1.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa
Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category
and in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower
end of a rating category.
Municipal Note Ratings
Moody's ratings for state municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements
are critical in short-term ratings, while other factors of major
importance in bond risk, long-term secular trends for example, may be less
important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns a MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
MIG 3/VMIG 3
This designation denotes favorable quality. All security elements
are accounted for but there is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
MIG 4/VMIG 4
This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and although not
distinctly or predominantly speculative, there is specific risk.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a wide range of financial
markets and assured sources of alternative liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations.
This ordinarily will be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal
is considered to be strong, but may be more vulnerable to adverse changes
in economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have adverse
impact on these bonds, and therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment
grade is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of
interest and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor. DDD represents the highest
potential for recovery on these bonds and D represents the lowest
potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the DDD, DD, or D
categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
Fitch short-term ratings are as follows:
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not
as great as the F-1+ and F-1 categories.
Demand Bond or Notes Ratings
Certain demand securities empower the holder at his option to require
the issuer, usually through a remarketing agent, to repurchase the
security upon notice at par with accrued interest. This is also referred
to as a put option. The ratings of the demand provision may be changed or
withdrawn at any time if, in Fitch's judgment, changing circumstances
warrant such action.
Fitch demand provision ratings carry the same symbols and related
definitions as its short-term ratings.
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-93.0% AMOUNT VALUE
---------------- ----------------
<S> <C> <C>
ALABAMA-1.0%
Alabama Housing Finance Authority, SFMR:
6.80%, 4/1/2025......................................................... $ 5,000,000 $ 5,190,600
6.45%, 10/1/2025........................................................ 8,000,000 8,097,040
Columbia Industrial Development Board, PCR (Alabama Power Farley Plant
Project)
9.25%, 12/1/2015........................................................ 3,800,000 3,925,514
Industrial Development Board of the Town of Courtland, SWDR
(Champion International Corp. Project) 7%, 11/1/2022.................... 8,100,000 8,415,009
West Jefferson Industrial Development Board, PCR, Refunding
(Alabama Power Co. - Miller Plant) 6.05%, 5/1/2023 (Insured; MBIA)...... 15,000,000 15,016,500
ALASKA-1.1%
Alaska Housing Finance Corp. (Collateralized Veterans Mortgage Program)
6.375%, 12/1/2027....................................................... 9,135,000 9,182,593
Valdez, Marine Terminal Revenue, Refunding (BP Pipeline Inc. Project)
5.85%, 8/1/2025......................................................... 37,000,000 34,767,790
CALIFORNIA-5.6%
Airport Commission City and County of San Francisco,
(San Francisco International Airport)
6.50%, 5/1/2015 (Insured; FGIC)......................................... 10,100,000 10,532,987
California:
5.50%, 3/1/2010......................................................... 13,330,000 12,941,430
5.90%, 4/1/2023......................................................... 25,000,000 24,253,750
California Higher Education Loan Authority, Inc.,
Student Loan Revenue, Refunding 6.50%, 6/1/2005......................... 19,250,000 20,417,127
California Housing Finance Agency, Single Family Mortgage
6.45%, 8/1/2025......................................................... 13,125,000 13,327,781
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
6.50%, 1/1/2032......................................................... 39,875,000 39,377,360
Los Angeles Department Water and Power, Electric Plant Revenue, Crossover
Refunding
5.875%, 9/1/2030........................................................ 18,125,000 17,563,487
San Diego County, COP, Refunding (Interim Justice Facilities Project)
6.50%, 8/1/2007......................................................... 10,110,000 10,559,996
San Marcos Public Facilities Authority, Revenue, Refunding, Public
Improvement
(Civic Center) 6.20%, 8/1/2022.......................................... 4,000,000 3,785,120
Southern California Public Power Authority, Power Project Revenue, Refunding
5.50%, 7/1/2012......................................................... 5,000,000 4,782,800
State Public Works Board of the State of California, LR:
(Department of Corrections - California State Prison-Madera County)
5.50%, 6/1/2015....................................................... 19,000,000 17,556,000
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
CALIFORNIA (CONTINUED)
State Public Works Board of the State of California, LR (continued):
(Various University of California Projects)
6.375%, 10/1/2019..................................................... $ 5,000,000 $ 5,045,100
University of California, Revenue (Multi-Purpose Project)
6.75%, 9/1/2023 (Insured; AMBAC) (Prerefunded 9/1/1999) (a,b)........... 37,000,000 41,139,930
COLORADO-2.2%
City and County of Denver, Airport Revenue:
4.25%, 9/1/1995......................................................... 10,000,000 10,000,000
8%, 11/15/2017.......................................................... 8,175,000 8,762,782
6.75%, 11/15/2022....................................................... 12,000,000 12,096,360
7.25%, 11/15/2023....................................................... 25,765,000 27,047,839
8.50%, 11/15/2023....................................................... 12,750,000 14,434,530
7.50%, 11/15/2025....................................................... 15,000,000 15,564,300
CONNECTICUT-1.0%
Connecticut Housing Finance Authority (Housing Mortgage Finance Program):
6.70%, 11/15/2012....................................................... 4,000,000 4,163,800
6.30%, 5/15/2024........................................................ 8,000,000 8,050,960
6.50%, 5/15/2027........................................................ 18,500,000 18,633,200
Eastern Connecticut Resource Recovery Authority (American Fuel Co. Project)
6.45%, 11/15/2022....................................................... 7,325,000 7,411,435
DELAWARE-.5%
Delaware Economic Development Authority, Water Development Revenue
(Wilmington Suburban Water Corp. Project) 6.80%, 12/1/2023.............. 8,000,000 8,319,360
Delaware Housing Authority, Senior Single Family Mortgage Revenue
6.45%, 1/1/2026......................................................... 13,200,000 13,198,416
DISTRICT OF COLUMBIA-1.9%
District of Columbia, Revenue 6.562%, 4/1/2022.............................. 8,000,000 8,200,560
Metropolitan Washington Airports Authority, Airport System Revenue:
6.625%, 10/1/2012 (Insured; MBIA) (a)................................... 40,400,000 42,289,508
6.625%, 10/1/2019 (Insured; MBIA)....................................... 23,600,000 24,369,596
FLORIDA-5.1%
Brevard County Housing Finance Authority, SFMR
6.80%, 3/1/2028......................................................... 9,500,000 9,892,350
Charlotte County, HR (Bon Secours Health System - Saint Joseph's Hospital
Project)
8.25%, 8/15/2018 (Prerefunded 8/15/1998) (b)............................ 7,000,000 7,929,040
Escambia County, PCR (Champion International Corp. Project)
6.90%, 8/1/2022......................................................... 9,000,000 9,442,710
Florida (Jacksonville Transportation Authority) 9.20%, 1/1/2015............. 2,000,000 2,766,440
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
FLORIDA (CONTINUED)
Florida Community Services Corp. Walton County Water and Sewer Revenue
(South Walton County Regional Utility):
6.95%, 3/1/2012....................................................... $ 3,000,000 $ 3,352,290
7%, 3/1/2018.......................................................... 3,500,000 3,822,770
Hospital Board of Directors of Lee County, HR, Refunding
(Lee Memorial Hospital Project):
6.206%, 4/1/2020 (Insured; MBIA)...................................... 31,000,000 31,546,840
6.348%, 4/1/2020 (Insured; MBIA)...................................... 4,000,000 4,070,560
Orange County Health Facilities Authority, Pooled Hospital Loan Revenue,
Refunding:
7.875%, Series A, 12/1/2025 (Insured; FGIC) (c)......................... 26,790,000 28,958,383
7.875%, Series B, 12/1/2025 (Insured; BIGI)............................. 16,470,000 17,803,082
Palm Beach County, Solid Waste Industrial Development Revenue:
(Okeelanta Power Limited Partnership Project) 6.70%, 2/15/2015.......... 23,400,000 22,755,564
(Osceola Power Limited Partnership) 6.95%, 1/1/2022..................... 33,800,000 33,313,618
Tampa, Water and Sewer System Revenue
6.60%, 10/1/2014 (Insured; FGIC) (Prerefunded 10/1/2002) (b,c).......... 20,000,000 22,668,200
Volusia County, Airport System Revenue (Daytona Beach Regional Airport):
7%, 10/1/2021 (Insured; MBIA) (Prerefunded 10/1/2000) (b)............... 810,000 920,322
7%, 10/1/2021 (Insured; MBIA)........................................... 2,390,000 2,612,198
GEORGIA-.9%
Fulco Hospital Authority, Revenue Anticipation Certificates
(Saint Joseph's Hospital of Atlanta, Inc.) 5.50%, 10/1/2014............. 9,200,000 8,317,904
Georgia Housing and Finance Authority:
Homeownership Mortgage Zero Coupon, 12/1/2031........................... 135,825,000 10,200,457
Single Family Mortgage:
7.125%, 12/1/2026..................................................... 10,000,000 10,549,100
6.55%, 12/1/2027...................................................... 5,495,000 5,561,380
Georgia Residential Finance Authority, Single Family Insured Mortgage
8.30%, 12/1/2019 (Insured; FHA)......................................... 2,000,000 2,139,560
IDAHO-.8%
Idaho Housing Agency:
Multi-Family Housing Refunding 6.70%, 7/1/2024.......................... 10,050,000 10,473,205
Single Family Mortgage:
6.40%, 7/1/2027....................................................... 8,345,000 8,357,351
6.45%, 7/1/2027....................................................... 8,460,000 8,507,714
6.60%, 7/1/2027....................................................... 4,365,000 4,441,126
ILLINOIS-7.4%
Bryant, PCR, Refunding (Central Illinois Light Co. Project)
5.90%, 8/1/2023......................................................... 11,000,000 10,763,720
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
ILLINOIS (CONTINUED)
Chicago, Gas Supply Revenue (Peoples Gas Light and Coke Co. Project)
5.75%, 12/1/2023....................................................... $ 6,900,000 $ 6,392,712
Chicago O'Hare International Airport, Special Facilities Revenue:
(Lufthansa German Airlines Project)
7.125%, 5/1/2018 (LOC; Bayerische Vereinsbank) (d).................... 4,650,000 4,871,247
(United Airlines Inc. Project):
8.20%, 5/1/2018....................................................... 19,215,000 20,936,280
8.40%, 5/1/2018....................................................... 20,135,000 21,926,411
8.50%, 5/1/2018....................................................... 6,500,000 7,108,855
8.85%, 5/1/2018....................................................... 15,415,000 17,517,760
Illinois Development Finance Authority, Revenue:
(Community Rehabilitation Providers Facilities) 8.75%, 3/1/2010......... 19,365,000 20,892,898
Environmental Facilities (Citizens Utilities Co. Project) 5.90%, 11/15/2028 5,490,000 5,236,472
Pollution Control, Refunding (Central Illinois Public Service Co.):
5.70%, 8/15/2026...................................................... 8,650,000 8,286,527
6.375%, 1/1/2028...................................................... 14,000,000 14,283,640
Illinois Educational Facilities Authority, Revenue:
(Art Institute of Chicago) 5.80%, 3/1/2027.............................. 4,475,000 4,181,664
(Illinois Institute of Technology), Refunding 6.875%, 12/1/2015......... 7,250,000 7,440,312
Illinois Health Facilities Authority, Revenue:
(Beverly Farm Foundation) 9.125%, 12/15/2015............................ 3,730,000 4,041,828
Refunding:
(Evangelical Hospitals) 6.50%, 4/15/2009 (Insured; FSA)............... 5,000,000 5,295,250
(Mercy Hospital and Medical Center) 7%, 1/1/2015...................... 7,500,000 7,669,725
(Southern Illinois Hospital Services) 5.85%, 3/1/2014 (Insured; MBIA)... 7,275,000 7,154,017
(Trinity Medical Center) 7%, 7/1/2012................................... 3,000,000 3,033,000
Illinois Housing Development Authority:
Homeowner Mortgage Revenue:
6.45%, 8/1/2017....................................................... 6,500,000 6,611,540
6.70%, 8/1/2025....................................................... 4,980,000 5,083,933
6.625%, Subseries B-2, 8/1/2026....................................... 15,385,000 15,626,698
6.625%, Subseries C-2, 8/1/2026....................................... 2,200,000 2,235,156
Multi-Family Housing (Lawndale Redevelopment Project)
6.90%, 12/1/2026...................................................... 8,750,000 9,026,325
Multi-Family Program 6.75%, 9/1/2021.................................... 8,750,000 8,990,538
Residential Mortgage Revenue 6.874%, 2/1/2018 .......................... 14,600,000 15,034,788
Section 8 Elderly Housing Revenue (Morningside North Development)
6.85%, 1/1/2021....................................................... 11,220,000 11,551,102
Peru, Electric System Revenue 5.75%, 5/1/2025 (Insured; FGIC)............... 6,750,000 6,498,697
Robbins, RRR (Robbins Resource Recovery Partners)
9.25%, 10/15/2014....................................................... 32,000,000 35,213,440
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
INDIANA-6.3%
Allen County, COP:
8.125%, 11/1/2017 (Prerefunded 5/1/1997) (b)............................ $ 5,000,000 $ 5,419,950
Refunding 6.50%, 11/1/2008.............................................. 5,000,000 5,260,950
Brownsburg School Building Corp., First Mortgage
6.10%, 2/1/2013 (Insured; CGIC)......................................... 7,500,000 7,604,175
Burns Harbor Solid Waste Disposal Facilities, Revenue
(Bethlehem Steel Corp. Project) 8%, 4/1/2024............................ 6,000,000 6,403,980
Danville Community Elementary School Building Corp., First Mortgage
6.90%, 1/15/2010........................................................ 4,400,000 4,720,364
Fort Wayne Hospital Authority, HR (Lutheran Hospital)
8%, 2/15/2003 (Prerefunded 2/15/1998) (b)............................... 7,000,000 7,627,130
Hammond Multi-School Building Corp., First Mortgage:
6%, 1/15/2013........................................................... 1,760,000 1,847,419
7.10%, 1/15/2015 (Prerefunded 7/15/2001) (b)............................ 5,585,000 6,403,258
6%, 1/15/2018........................................................... 1,250,000 1,318,162
Indiana Development Finance Authority, Environmental Revenue (PSI Energy
Inc.)
5.75%, 2/15/2028........................................................ 8,000,000 7,573,600
Indiana Health Facility Financing Authority, HR
Refunding (Welborn Memorial Baptist Hospital) 5.60%, 7/1/2018........... 3,195,000 2,897,162
Indiana Office Building Commission, Correctional Facilities Program Revenue
6.375%, 7/1/2016........................................................ 25,000,000 25,616,250
Indiana Transportation Finance Authority, Airport Facility LR
6.50%, 11/1/2007........................................................ 12,500,000 13,296,750
Indianapolis Airport Authority, Special Facility Revenue (United Airlines
Project)
6.50%, 11/15/2031....................................................... 22,900,000 22,398,032
Indianapolis Local Public Improvement Bond Bank
8.50%, 2/1/2018 (Prerefunded 2/1/1998) (b).............................. 73,000,000 81,592,830
IPS School Building Corp., First Mortgage 6.10%, 1/15/2020.................. 11,000,000 11,085,910
Jefferson County Hospital Authority, Hospital Facility Revenue, Refunding
(Kings Daughter's Hospital) 8.50%, 8/15/2013............................ 3,000,000 3,259,950
Lake Central Multi-District School Building Corp., First Mortgage Refunding
5.375%, 7/1/2012........................................................ 4,360,000 4,128,528
Lebanon High School Building Corp., First Mortgage Refunding
5.75%, 7/1/2005......................................................... 2,000,000 2,052,020
Logansport Multi - Purpose School Building Corp., First Mortgage Refunding
6%, 1/1/2009............................................................ 7,645,000 7,796,371
Monroe County Community School Corp., School Building Corp.,
First Mortgage Refunding 6.60%, 7/1/2009................................ 3,080,000 3,313,033
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
INDIANA (CONTINUED)
Noblesville High School Building Corp., First Mortgage 5.75%, 2/15/2015..... $ 20,060,000 $ 19,510,356
IOWA-.4%
Iowa Finance Authority, Revenue:
Hospital Facility Refunding (Jennie Edmundson Memorial Hospital)
7.65%, 11/1/2016...................................................... 4,850,000 5,067,377
Single Family Mortgage (Mortgage Backed Securities Program)
6.65%, 7/1/2028....................................................... 12,070,000 12,328,660
KANSAS-1.6%
Kansas Department of Transportation, Highway Revenue
6.50%, 3/1/2012 (Prerefunded 3/1/2002) (b).............................. 7,840,000 8,766,610
Wichita, HR 6.464%, 10/1/2022 (Insured; MBIA)............................... 51,300,000 52,838,487
KENTUCKY-2.2%
City of Ashland, Sewage and Solid Waste Revenue
(Ashland Inc. Project) 7.125%, 2/1/2022................................. 13,170,000 13,890,399
Kenton County Airport Board, Airport Revenue:
(Greater Cincinnati International Airport):
8.25%, 3/1/2015 (Prerefunded 3/1/1998) (b)............................ 2,395,000 2,668,533
8.25%, 3/1/2015....................................................... 10,945,000 12,098,384
Special Facilities (Delta Airlines Project) 7.125%, 2/1/2021............ 8,455,000 8,715,499
Mount Sterling, LR (Kentucky League Cities Funding):
6.15%, 3/1/2013......................................................... 3,000,000 3,004,260
6.10%, 3/1/2018......................................................... 7,955,000 8,062,313
Pendleton County, Multi-County Lease Revenue
(Kentucky Associates Counties Leasing Trust Program) 6.50%, 3/1/2019.... 26,000,000 26,798,200
Trimble County, PCR (Louisville Gas and Electric Co. Project):
7.625%, 11/1/2020 (Prerefunded 11/1/2000) (b)........................... 1,445,000 1,678,310
7.625%, 11/1/2020....................................................... 7,555,000 8,410,755
LOUISIANA-1.5%
Beauregard Parish, Revenue (Boise Cascade Corp. Project):
Refunding 7.75%, 6/1/2021............................................... 3,420,000 3,643,736
Solid Waste Disposal 6.30%, 8/1/2023.................................... 5,650,000 5,504,908
Louisiana Public Facilities Authority, Revenue
(Tulane University of Louisiana):
6.625%, 11/15/2021.................................................... 7,270,000 7,592,134
6.625%, 11/15/2021 (Prerefunded 11/15/2002) (b)....................... 2,150,000 2,433,886
Parish of Saint Charles, PCR (Louisiana Power and Lighting Co. Project)
8.25%, 6/1/2014......................................................... 7,500,000 8,361,975
Parish of West Feliciana, PCR:
(Gulf States Utilities Co. Project) 9%, 5/1/2015........................ 13,500,000 15,438,600
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
LOUISIANA (CONTINUED)
Parish of West Feliciana, PCR (continued):
(Gulf States Utilities-I) 7.70%, 12/1/2014.............................. $ 14,000,000 $ 14,901,740
MAINE-1.1%
Jay, SWDR (International Paper Co. Project) 6%, 12/1/2017................... 7,105,000 6,892,205
Maine Financial Authority, Solid Waste Revenue
Recycling Facilities (Great Northern Paper, Inc. Project-Bowater Inc.
Obligor)
7.75%, 10/1/2022........................................................ 8,165,000 8,706,258
Maine Health and Higher Education Facilities Authority, Revenue, Refunding
5.70%, 7/1/2013 (Insured; FSA).......................................... 5,000,000 4,879,350
Maine Housing Authority, Mortgage Purchase
6.875%, 11/15/2023...................................................... 14,000,000 14,442,680
Skowhegan, SWDR (S.D. Warren Co. Project) 8.40%, 10/1/2015.................. 7,700,000 8,544,767
MARYLAND-2.2%
Community Development Administration,
Department of Housing and Community Development State of Maryland,
Single Family Program Bonds:
6.80%, 4/1/2024....................................................... 33,980,000 34,920,566
6.55%, 4/1/2026....................................................... 9,260,000 9,386,862
6.75%, 4/1/2026....................................................... 20,000,000 20,561,600
Maryland Health and Higher Educational Facilities Authority,
Revenue (Maryland General Hospital Issue):
6.125%, 7/1/2019 (Insured; MBIA)...................................... 1,815,000 1,834,130
6.20%, 7/1/2024 (Insured; MBIA)....................................... 4,000,000 4,059,440
Northeast Waste Disposal Authority, Solid Waste Revenue
(Montgomery County Resource Recovery Project) 6.30%, 7/1/2016........... 15,000,000 15,052,800
MASSACHUSETTS-3.3%
Massachusetts Consolidated Loan 5.625%, 8/1/2015 (Insured; MBIA)............ 15,690,000 15,151,833
Massachusetts Housing Finance Agency, Revenue:
Housing:
6.65%, 7/1/2019 (Insured; AMBAC)...................................... 7,275,000 7,506,490
6.50%, 7/1/2025 (Insured; AMBAC)...................................... 4,140,000 4,194,068
6.60%, 1/1/2037 (Insured; AMBAC)...................................... 7,100,000 7,192,229
Single Family Housing:
6.60%, 12/1/2024...................................................... 19,550,000 19,802,390
7.125%, 6/1/2025...................................................... 26,975,000 28,210,994
6.65%, 12/1/2027...................................................... 7,200,000 7,322,328
Massachusetts Industrial Finance Agency, Revenue:
Museum (Norman Rockwell Stockbridge) 8.125%, 7/1/2011................... 3,160,000 3,346,693
(Provider Lease Program) 8.75%, 7/15/2009............................... 2,950,000 3,150,806
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
MASSACHUSETTS (CONTINUED)
Massachusetts Municipal Wholesale Electric Co., Power Supply System Revenue
5.45%, 7/1/2018......................................................... $ 20,600,000 $ 19,007,620
The New England Education Loan Marketing Corp., Student Loan Refunding
5.70%, 7/1/2005......................................................... 16,500,000 16,590,915
MICHIGAN-2.9%
Detroit:
Refunding 6.375%, 4/1/2006.............................................. 8,635,000 8,871,772
Water Supply System Revenue 6.375%, 7/1/2022 (Insured; FGIC)............ 8,400,000 8,537,676
The Economic Development Corp. of the County of Gratiot,
Limited Obligation Economic Development Revenue (Danly Die Set Project)
7.625%, 4/1/2007........................................................ 3,200,000 3,356,224
Michigan Hospital Finance Authority, Revenue:
Hospital Refunding (Genesys Health System Obligated Group):
8.125%, 10/1/2021..................................................... 15,000,000 16,156,050
7.50%, 10/1/2027...................................................... 13,000,000 13,312,390
(Metropolitan Hospital) 8.125%, 7/1/2018 (Prerefunded 7/1/1999) (b)..... 5,000,000 5,788,500
(Sisters of Mercy) 6.30%, 2/15/2022 (Insured; FSA)...................... 36,200,000 36,551,502
Western Townships Utilities Authority, Sewer Disposal System
(Limited Tax GO):
8.125%, 1/1/2009...................................................... 8,765,000 9,879,820
8.20%, 1/1/2018....................................................... 9,250,000 10,447,782
8.30%, 1/1/2019....................................................... 1,000,000 1,132,550
MINNESOTA-2.3%
Minneapolis, HR, Refunding (Lifespan Inc. Issue)
9.125%, 12/1/2014 (Prerefunded 12/1/1997) (b)........................... 4,000,000 4,518,000
Minnesota Housing Finance Agency, Single Family Mortgage:
6.40%, 7/1/2015......................................................... 6,000,000 6,081,360
6.40%, 7/1/2017......................................................... 8,500,000 8,601,490
6.90%, 7/1/2022......................................................... 7,265,000 7,569,113
6.50%, 7/1/2024......................................................... 15,870,000 16,071,232
6.45%, 7/1/2025......................................................... 30,210,000 30,472,223
Rochester Health Care Facilities, Revenue 6.026%, 11/15/2015................ 18,000,000 18,068,580
MISSOURI-.5%
Missouri Higher Education Loan Authority, Student Loan Revenue
6.75%, 2/15/2009........................................................ 11,500,000 11,900,315
Saint Louis, Airport Revenue, Refunding and Improvement
(Lambert-Saint Louis International Airport Project)
6.125%, 7/1/2015 (Insured; FGIC)........................................ 8,000,000 8,088,800
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
MONTANA-1.0%
Montana Board of Housing (Single Family Program)
6.35%, 12/1/2021 (e).................................................... $ 7,255,000 $ 7,290,840
Montana Health Facility Authority, HR
(Deaconess-Billings Clinic Health System Project) 5.342%, 2/15/2025..... 27,700,000 24,948,005
Montana Higher Education Student Assistance Corp., Student Loan Revenue
5.95%, 12/1/2012........................................................ 7,500,000 7,286,700
NEVADA-1.3%
Clark County, IDR (Nevada Power Co. Project) 6.70%, 6/1/2022 (Insured; FGIC) (a) 25,895,000 27,129,674
Nevada Housing Division (Single Family Program)
6.80%, 4/1/2027......................................................... 9,960,000 10,246,649
Washoe County:
Gas Facilities Revenue (Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA)...................................... 10,000,000 10,538,700
Gas and Water Facilities Revenue, Refunding (Sierra Pacific)
6.30%, 12/1/2014 (Insured; AMBAC)..................................... 4,375,000 4,513,819
NEW HAMPSHIRE-5.4%
Business Finance Authority of the State of New Hampshire,
State Guaranteed Airport Revenue (Manchester Airport Project):
6.50%, 1/1/2019....................................................... 12,600,000 12,825,288
6.375%, 1/1/2022...................................................... 8,650,000 8,785,718
New Hampshire Higher Educational and Health Facilities Authority, Revenue,
Refunding:
(Franklin Pierce College Issue) 6%, 10/1/2013........................... 4,655,000 4,490,632
(Wentworth - Douglas Hospital):
8.375%, 1/1/2006 (Prerefunded 1/1/1997) (b)........................... 2,300,000 2,475,950
8.50%, 1/1/2015 (Prerefunded 1/1/1997) (b)............................ 7,700,000 8,301,447
New Hampshire Housing Finance Authority:
Multi-Family Housing:
7.55%, 7/1/2013....................................................... 4,205,000 4,704,722
(Mariners Village Project):
6.50%, 7/1/2026 (Insured; FHA).................................... 3,195,000 3,222,669
6.60%, 1/1/2038 (Insured; FHA).................................... 7,365,000 7,428,413
Single Family Mortgage:
7.25%, 1/1/2016....................................................... 4,000,000 4,260,600
6.05%, 7/1/2025....................................................... 33,495,000 32,678,727
6.55%, 7/1/2026....................................................... 22,415,000 22,687,566
Single Family Residential Mortgage:
6.85%, 7/1/2016....................................................... 7,235,000 7,548,927
5.60%, 7/1/2017....................................................... 6,000,000 5,565,120
7.10%, 1/1/2023....................................................... 26,645,000 28,044,662
7.75%, 7/1/2023....................................................... 18,225,000 19,362,604
6.85%, 1/1/2025....................................................... 10,885,000 11,190,107
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
NEW HAMPSHIRE (CONTINUED)
New Hampshire Housing Finance Authority (continued):
Single Family Residential Mortgage (continued):
6.95%, 1/1/2026....................................................... $ 10,410,000 $ 10,809,952
New Hampshire Industrial Development Authority, Revenue
(Pollution Control Public Service Co. Project) 7.65%, 5/1/2021.......... 18,300,000 19,384,641
NEW JERSEY-3.8%
Howell Township Municipal Utilities Authority, Revenue
8.60%, 1/1/2014 (Prerefunded 7/1/1998) (b).............................. 4,000,000 4,535,080
New Jersey Economic Development Authority, PCR
(Public Service Electric and Gas Co. Project)
6.40%, 5/1/2032 (Insured; MBIA) (a)..................................... 32,040,000 33,265,850
New Jersey Health Care Facilities Financing Authority, Revenue:
(Atlantic City Medical Center) 8.375%, 8/1/2020 (Insured; FHA)
(Prerefunded 2/1/1998) (b)............................................ 8,510,000 9,482,267
(Kimball Medical Center) 8%, 7/1/2013................................... 16,550,000 17,586,527
(Newton Memorial Hospital) 7.50%, 7/1/2019.............................. 5,000,000 5,224,100
New Jersey Housing and Mortgage Finance Agency, Revenue:
6%, 11/1/2002........................................................... 5,440,000 5,727,014
6.20%, 11/1/2004........................................................ 9,300,000 9,845,259
6.45%, 11/1/2007........................................................ 15,260,000 15,989,123
New Jersey Transportation Trust Fund Authority,
Transportation System 5.75%, 6/15/2014 (Insured; MBIA).................. 30,000,000 30,098,700
New Jersey Wastewater Treatment Trust, Insured Loan Revenue
9%, 9/1/2007 (Prerefunded 9/1/1997) (b)................................. 6,000,000 6,693,120
Passaic County Utilities Authority, Solid Waste System Revenue 7%, 11/15/2007 6,740,000 6,818,656
Pollution Control Financing Authority of Salem County, PCR, Refunding
(Public Service Electric and Gas Co. Project)
6.25%, 6/1/2031 (Insured; MBIA)......................................... 6,500,000 6,673,225
NEW MEXICO-.8%
Albuquerque, HR, Refunding (Presbyterian Health Care Services)
6.375%, 8/1/2007 (Insured; MBIA)........................................ 4,500,000 4,844,925
New Mexico Educational Assistance Foundation, Student Loan Revenue
7.45%, 3/1/2010......................................................... 12,045,000 12,771,314
New Mexico Mortgage Financing Authority:
6.85%, 7/1/2015......................................................... 5,100,000 5,450,574
6.75%, 7/1/2025......................................................... 2,250,000 2,462,760
6.80%, 1/1/2026......................................................... 5,500,000 6,020,410
NEW YORK-4.8%
New York City:
8%, 6/1/1996............................................................ 3,685,000 3,783,611
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
NEW YORK (CONTINUED)
New York City (continued):
7.50%, 2/1/2003......................................................... $ 9,000,000 $ 9,953,910
8.25%, 6/1/2006......................................................... 2,750,000 3,236,998
7.25%, 8/15/2007........................................................ 6,790,000 7,427,513
6.375%, 8/15/2011....................................................... 31,285,000 31,348,509
New York City Industrial Development Agency, Special Facilities Revenue
(1994 American Airlines, Inc., Project) 6.90%, 8/1/2024................. 6,000,000 6,208,800
New York State Dormitory Authority, Revenue:
City University:
7.50%, 7/1/2010....................................................... 10,000,000 11,544,300
Refunding 8.125%, 7/1/2008............................................ 9,725,000 10,873,231
Judicial Facility Lease (Suffolk County Issue) 9.50%, 4/15/2014......... 8,000,000 9,377,040
New York State Energy, Research and Development Authority, Revenue,
Electric Facilities (Con Edison Co. Project) 7.50%, 1/1/2026............ 23,970,000 25,925,233
New York State Local Government Assistance Corp.
6.25%, 4/1/2021......................................................... 9,735,000 9,830,792
New York State Medical Care Facilities Finance Agency, Revenue
Mental Health Services Facilities Improvement 7.875%, 8/15/2020......... 12,125,000 13,294,820
New York State Mortgage Agency, Revenue (Homeowner Mortgage)
6.65%, 10/1/2025........................................................ 17,220,000 17,524,794
New York State Thruway Authority, Local Highway and Bridge Service Contract
6.45%, 4/1/2015 (e)..................................................... 16,385,000 16,718,762
New York State Urban Development Corp., Revenue (Correctional Capital Facilities)
6.25%, 1/1/2020......................................................... 12,100,000 12,038,774
NORTH CAROLINA-1.3%
Martin County Industrial Facilities and Pollution Control Financing
Authority,
Revenue (Solid Waste-Weyerhaeuser Co.) 5.65%, 12/1/2023................. 15,440,000 14,064,759
North Carolina Housing Finance Agency, Single Family Revenue
6.50%, 9/1/2026......................................................... 7,000,000 7,084,770
North Carolina Medical Care Community, HR:
(Alamance Health Services Inc. Project):
5.50%, 8/15/2013 (Insured; FSA)....................................... 5,000,000 4,817,650
Refunding 6.375%, 8/15/2012 (Insured; FSA)............................ 3,000,000 3,140,370
(Duke University Hospital Project) 7%, 6/1/2021 (Prerefunded 6/1/2001) (b) 2,000,000 2,289,300
Pitt County, Revenue (Pitt County Memorial Hospital) 6.90%, 12/1/2021....... 12,000,000 12,733,200
Winston Salem, COP 6.90%, 6/1/2011 (Prerefunded 6/1/2001) (b)............... 5,245,000 5,940,067
NORTH DAKOTA-.3%
North Dakota Housing Finance Agency:
(Housing Mortgage Finance Program) 6.75%, 7/1/2025...................... 6,610,000 6,772,408
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
NORTH DAKOTA (CONTINUED)
North Dakota Housing Finance Agency (continued):
SFMR:
8.375%, 7/1/2021...................................................... $ 2,275,000 $ 2,406,882
6.80%, 7/1/2023....................................................... 3,290,000 3,407,914
OHIO-.4%
Cuyahoga County, HR (Meridia Health System) 7%, 8/15/2023................... 7,000,000 7,347,200
Hamilton County, Hospital Facilities Revenue, Refunding (Bethesda Hospital)
6.25%, 1/1/2012......................................................... 3,115,000 3,167,488
Ohio Air Quality Development Authority, PCR (Cincinnati Gas and Electric)
10.125%, 12/1/2015...................................................... 5,500,000 5,721,320
OKLAHOMA-1.3%
Claremore Industrial and Redevelopment Authority, Economic Development
Revenue
(Yuba Project) 8.375%, 7/1/2011......................................... 7,500,000 7,999,050
Southern Oklahoma Memorial Hospital Authority, HR 6.60%, 12/1/2012.......... 5,725,000 5,887,705
Tulsa Municipal Airport Trust, Revenue:
(AMR Corp.) 7.60%, 12/1/2030............................................ 14,390,000 15,258,868
(American Airlines) 7.375%, 12/1/2020................................... 23,000,000 24,023,960
PENNSYLVANIA-1.2%
Delaware County Industrial Development Authority, Water Facilities Revenue
(Philadelphia Suburban Water) 6.35%, 8/15/2025 (Insured; FGIC).......... 10,000,000 10,141,800
Pennsylvania Economic Development Financing Authority,
Exempt Facilities Revenue (MacMillan Ltd. Partnership Project)
7.60%, 12/1/2020........................................................ 4,500,000 4,873,365
Philadelphia Hospitals and Higher Educational Facilities Authority, HR
(Philadelphia MR Project) 8.625%, 8/1/2011 (Prerefunded 8/1/1996) (b)... 3,000,000 3,191,790
Quakertown General Authority, Revenue (Community Mental Health/Retardation):
8.75%, 11/1/2000........................................................ 1,755,000 1,924,884
8.875%, 11/1/2010....................................................... 6,420,000 7,046,785
Ridley Park Hospital Authority, Revenue (Taylor Hospital)
8.625%, 12/1/2020 (Prerefunded 12/1/2000) (b)........................... 10,000,000 12,056,500
Schuykill County Industrial Development Authority, RRR, Refunding
(Schuykill Energy Resource Inc.) 6.50%, 1/1/2010........................ 7,675,000 7,754,590
RHODE ISLAND-1.5%
Rhode Island Health and Educational Building Corp., Revenue:
(Johnson and Wales University) 8.375%, 4/1/2020 (Prerefunded 4/1/2000) (b) 11,000,000 12,956,460
(Landmark Medical Center) 5.60%, 10/1/2012.............................. 5,000,000 4,711,400
Rhode Island Housing and Mortgage Finance Corp.
(Homeownership Opportunity):
6.95%, 4/1/2022....................................................... 9,250,000 9,590,308
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
RHODE ISLAND (CONTINUED)
Rhode Island Housing and Mortgage Finance Corp.
(Homeownership Opportunity) (continued):
6.60%, 10/1/2025...................................................... $ 10,270,000 $ 10,368,489
6.50%, 4/1/2027....................................................... 9,835,000 9,961,970
6.85%, 4/1/2027....................................................... 5,750,000 6,009,325
Rhode Island Port Authority and Economic Development Corp., Airport Revenue
5.25%, 7/1/2015 (Insured: FSA).......................................... 6,000,000 5,430,060
SOUTH CAROLINA-1.0%
Richland County, Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project) 7.125%, 9/1/2021............................. 6,250,000 6,640,625
South Carolina Housing Finance and Development Authority,
Mortgage Revenue:
6.55%, 7/1/2015....................................................... 3,950,000 4,039,823
6.65%, 7/1/2019....................................................... 3,500,000 3,570,525
6.75%, 7/1/2026....................................................... 7,000,000 7,188,510
6.70%, 7/1/2027....................................................... 8,000,000 8,193,600
Spartanburg County, Hospital Facilities Improvement Revenue, Refunding
(Mary Black Memorial Project) 8.25%, 10/1/2008 (Prerefunded 10/1/1998) (b) 5,000,000 5,652,050
York County, Industrial Revenue, Exempt Facility (Hoechst Celanese)
5.70%, 1/1/2024......................................................... 5,000,000 4,667,750
SOUTH DAKOTA-.1%
South Dakota Housing Development Authority, Homeownership Mortgage
5.70%, 5/1/2013......................................................... 2,250,000 2,165,018
TENNESSEE-2.6%
Humphreys County Industrial Development Board, SWDR
(E.I. Dupont Denemours and Co. Project) 6.70%, 5/1/2024................. 21,070,000 21,864,128
McMinn County Industrial Development Board, PCR (Calhoun Newsprint Co.
Project)
7.625%, 3/1/2016........................................................ 15,000,000 15,861,750
Metropolitan Government Nashville and Davidson County, Water and Sewer
Revenue
6.074%, 1/1/2022 (Insured; AMBAC)....................................... 15,000,000 14,988,750
Tennessee Housing Development Agency, Mortgage Finance:
6.45%, 7/1/2021......................................................... 11,565,000 11,668,391
6.90%, 7/1/2025......................................................... 4,150,000 4,313,137
6.55%, 7/1/2026......................................................... 31,735,000 32,280,207
TEXAS-6.1%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project):
7%, 12/1/2011......................................................... 12,330,000 12,890,645
7.50%, 12/1/2029...................................................... 25,905,000 27,242,475
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
TEXAS (CONTINUED)
Angelina and Neches River Authority, SWDR (Champion International Corp.
Project)
7.375%, 5/1/2015........................................................ $ 5,570,000 $ 5,868,218
Austin, Airport System Prior Lien Revenue 6.125%, 11/15/2025 (Insured MBIA) (e) 15,250,000 15,237,800
Bexar Metropolitan Water District, Waterworks System Revenue
6.35%, 5/1/2025 (Insured; MBIA)......................................... 3,200,000 3,281,856
Brazos County Health Facility Development Corp., Franciscan Services Corp.
Revenue,
Refunding (Saint Joseph's Hospital and Health Center)
8.875%, 1/1/2015 (Prerefunded 1/1/1998) (b)............................. 14,875,000 16,670,264
Denison Hospital Authority, HR, Refunding (Texoma Medical Center Project)
8%, 9/1/2016............................................................ 8,790,000 9,081,389
Gulf Coast Waste Disposal Authority, Revenue:
(Champion International Corp.):
7.375%, 10/1/2025..................................................... 12,000,000 12,775,320
6.875%, 12/1/2028..................................................... 6,000,000 6,183,720
Solid Waste Disposal (Occidental Petroleum Corp. Project) 7%, 11/1/2020. 7,725,000 7,933,961
Harris County Hospital District, Mortgage Revenue, Refunding
7.40%, 2/15/2010 (Insured; AMBAC)....................................... 5,000,000 5,867,200
Houston Hotel Occupancy Tax, Revenue 7%, 7/1/2009 (Insured; FGIC)
(Prerefunded 7/1/2001) (b).............................................. 12,225,000 13,756,670
Lower Neches Valley Authority Industrial Development Corp.,
Sewer Facilities Revenue (Mobil Oil Refining Corp. Project)
6.40%, 3/1/2030......................................................... 28,785,000 28,947,635
Rio Grande Valley Health Facilities Development Corp., HR, Refunding
(Valley Baptist Medical Center Project) 6.40%, 8/1/2016 ................ 11,200,000 11,544,064
Sabine River Authority, PCR (Collateralized-Texas Utilities Electric Project)
8.25%, 10/1/2020........................................................ 4,000,000 4,374,520
Texas, GO (Veterans Housing Assistance Program)
7%, 12/1/2025........................................................... 30,500,000 31,872,805
Texas General Service Commission, Lease Purchase Agreement
7.50%, 3/1/2012......................................................... 6,855,000 7,049,888
Texas Higher Education Coordinating Board,
College Student Loan Revenue (Senior Lien):
7.45%, 10/1/2006...................................................... 4,050,000 4,234,316
Zero Coupon, 10/1/2025................................................ 3,010,000 1,892,086
7.70%, 10/1/2025...................................................... 2,725,000 2,844,382
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation Project):
8.625%, 11/1/2000..................................................... 2,110,000 2,330,031
8.75%, 11/1/2010...................................................... 4,745,000 5,393,452
Texas Water Resources Finance Authority, Revenue 7.625%, 8/15/2008.......... 4,990,000 5,323,881
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
UTAH-1.4%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration) 9.25%, 7/1/2018..... $ 20,000,000 $ 21,846,800
Utah Housing Finance Agency, Single Family Mortgage:
6.55%, 1/1/2022......................................................... 5,340,000 5,403,226
6.65%, 7/1/2026......................................................... 3,600,000 3,671,316
6.40%, 1/1/2027......................................................... 6,875,000 6,949,113
6.65%, 7/1/2027......................................................... 10,340,000 10,551,039
7%, 7/1/2027............................................................ 5,250,000 5,488,613
Utah Municipal Finance Cooperative, Local Government Revenue
(Pooled Capital-Salt Lake):
Zero Coupon, 3/1/2013 (Insured: FSA).................................. 3,690,000 1,289,249
Zero Coupon, 3/1/2014 (Insured: FSA).................................. 3,190,000 1,042,045
Zero Coupon, 3/1/2015 (Insured: FSA).................................. 3,540,000 1,080,302
VERMONT-.3%
Vermont Housing Finance Agency, Single Family Housing 6.875%, 5/1/2025...... 10,500,000 10,793,160
VIRGINIA-2.1%
Giles County Industrial Development Authority,
Solid Waste Disposal Facility Revenue (Hoechst Celanese Corp. Project)
6.625%, 12/1/2022....................................................... 8,715,000 8,910,129
Henrico County Industrial Development Authority, Revenue
(Maryview Hospital Project) 7.50%, 9/1/2011 (Prerefunded 8/1/2000) (b).. 5,475,000 6,285,136
Virginia Housing Development Authority, Commonwealth Mortgage:
6.55%, 7/1/2017 (e)..................................................... 3,935,000 3,978,639
6.60%, 7/1/2020 (e)..................................................... 3,025,000 3,063,024
6.20%, 7/1/2021......................................................... 15,000,000 14,566,350
6.70%, 1/1/2022......................................................... 6,950,000 7,098,522
6.40%, 7/1/2022 (Insured; MBIA)......................................... 24,000,000 24,303,600
6.60%, 7/1/2022 (e)..................................................... 4,635,000 4,689,090
6.85%, 1/1/2027......................................................... 8,000,000 8,213,200
WASHINGTON-1.6%
Pilchuck Development Public Corp., Revenue, Special Facilities Airport
(Tramco Inc. Project) 6%, 8/1/2023...................................... 15,150,000 13,729,385
Public Utility District No. 1 of Chelan County,
Chelan Hydro Consolidated System Revenue 6.55%, 7/1/2023................ 10,000,000 10,224,100
Public Utility District No. 1 of Douglas County,
Wells Hydroelectric Revenue:
6.15%, 9/1/2013....................................................... 2,000,000 2,008,880
6.20%, 9/1/2018....................................................... 3,000,000 3,002,190
Puyallup School District No. 3, Pierce County:
6.65%, 12/1/2007 (Insured; AMBAC)....................................... 2,000,000 2,170,580
6.70%, 12/1/2008 (Insured; AMBAC)....................................... 4,515,000 4,879,631
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
WASHINGTON (CONTINUED)
Snohomish County School District No. 6, Mukilteo
6.50%, 12/1/2011........................................................ $ 7,700,000 $ 8,295,210
Tacoma, Electric System Revenue 6.513% 1/1/2015 (Insured; AMBAC)............ 12,000,000 12,373,320
Washington 10%, 10/1/2002 (Insured; MBIA) (Prerefunded 10/1/96) (b)......... 3,000,000 3,196,710
Washington Health Care Facilities Authority, Revenue
(Harrison Memorial Hospital, Bremerton) 5.30%, 8/15/2014 (Insured; AMBAC) 5,000,000 4,590,800
WEST VIRGINIA-.2%
Braxton County, Solid Waste Disposal Revenue (Weyerhaeuser Co. Project)
6.50%, 4/1/2025......................................................... 8,000,000 8,096,800
WISCONSIN-1.4%
Janesville, IDR (Simmons Manufacturing Co., Inc. Project)
7%, 10/15/2017.......................................................... 3,000,000 3,158,610
Madison, Industrial Development Revenue (Madison Gas and Electric Co.
Project)
6.75%, 4/1/2027......................................................... 10,000,000 10,476,200
Wisconsin Housing and Economic Development Authority,
Homeownership Revenue:
6.45%, 3/1/2017....................................................... 7,000,000 7,149,800
6.30%, 3/1/2026....................................................... 30,750,000 30,218,333
Wisconsin Municipal Mutual Insurance Co., Revenue
8.50%, 12/1/2007 (LOC; Fuji Bank) (d)................................... 2,500,000 2,712,225
WYOMING-.8%
Sweetwater County, SWDR (FMC Corp. Project):
7%, 6/1/2024............................................................ 6,080,000 6,250,118
6.90%, 9/1/2024......................................................... 16,225,000 16,588,602
Uinta County Hospital Facility, Revenue, Refunding
(IHC Hospitals Inc.) 7.25%, 2/15/2019................................... 7,350,000 7,866,558
U.S. RELATED-.5%
Commonwealth of Puerto Rico, 5.85%, 7/1/2010................................ 5,725,000 5,710,401
Puerto Rico Highway and Transportation Authority, Highway Revenue
5.50%, 7/1/2008......................................................... 14,000,000 13,463,380
----------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $ 3,536,616,661).................................................. $3,678,674,596
=================
SHORT-TERM MUNICIPAL INVESTMENTS-7.0%
ARIZONA-.0%
Apache County Industrial Development Authority, IDR, VRDN
(Tucson Electric Power-Springerville Project) 3.70% (f)................. $ 300,000 $ 300,000
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
ARIZONA (CONTINUED)
Pima County Industrial Development Authority,
Industrial Revenue, VRDN (Tuscon Electric):
3.65% (LOC; Bank America National Trust and Saving Association) (d,f). $ 1,000,000 $ 1,000,000
(Irvington Project) 3.65% (LOC; Societe Generale) (d,f)............... 100,000 100,000
COLORADO-.0%
Colorado Student Obligation Bond Authority, Student Loan Revenue, VRDN
3.55% (f)............................................................... 200,000 200,000
FLORIDA-1.0%
Dade County, Water and Sewer System Revenue, VRDN
3.45% (Insured; FGIC) (f)............................................... 17,100,000 17,100,000
Jacksonville, PCR, Refunding VRDN (Florida Power and Light Co. Project)
3.35% (f)............................................................... 22,840,000 22,840,000
IOWA-1.0%
Iowa Finance Authority, SWDR, VRDN (Cedar River Paper Co. Project):
3.50% (LOC; Swiss Bank Corp.) (d,f)..................................... 25,000,000 25,000,000
3.50% (LOC; Swiss Bank Corp.) (d,f)..................................... 13,000,000 13,000,000
LOUISIANA-.2%
West Feliciana Parish, PCR, VRDN (Gulf State Utilities Co. Project)
3.70% (LOC; Long Term Credit Bank of Japan) (d,f)....................... 6,300,000 6,300,000
MARYLAND-.4%
Frederick, VRDN 3.80% (LOC; The Fuji Bank and Trust Co.) (d,f).............. 800,000 800,000
Maryland Energy Financing Administration, Limited Obligation Revenue, VRDN
(Baltimore Ferst Project) 3.55% (f)..................................... 8,000,000 8,000,000
Northeast Waste Disposal Authority, RRR, Refunding, VRDN
(Harford County Resource) 3.40% (Insured; AMBAC) (f).................... 3,360,000 3,360,000
Prince Georges' County Housing Authority, Mortgage Revenue, VRDN
(Laurel-Oxford)
3.675% (LOC; Bankers Trust) (d,f)....................................... 4,500,000 4,500,000
MICHIGAN-1.2%
Michigan Higher Education Student Loan Authority, Revenue, VRDN
3.55% (Insured; AMBAC) (f).............................................. 2,000,000 2,000,000
Michigan Strategic Fund, Limited Obligation Revenue, VRDN:
(Coil Center Corp. Project) 4.55% (LOC; Tokai Bank) (d,f)............... 4,100,000 4,100,000
Refunding (Dow Chemical Co. Project) 3.45% (f).......................... 12,500,000 12,500,000
Midland County Economic Development Corp., Economic Development Ltd.
Obligation Revenue, VRDN (Dow Chemical Co. Project) 3.45% (f)........... 27,400,000 27,400,000
MISSISSIPPI-.2%
Jackson County, Port Facility Revenue, Refunding VRDN (Chevron USA Inc.
Project)
3.50% (f)............................................................... 9,600,000 9,600,000
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1995
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
NEVADA-.2%
Clark County IDR, VRDN (Nevada Cogeneration Associates)
3.65% (LOC; Swiss Bank Corp.) (d,f)..................................... $ 8,450,000 $ 8,450,000
NEW JERSEY-.3%
New Jersey Turnpike Authority, Turnpike Revenue, Refunding, VRDN
3.05% (Insured; FGIC) (f)............................................... 13,000,000 13,000,000
OREGON-.1%
Oregon Economic Development Revenue, VRDN (JAE Oregon Inc. Project)
4.075% (LOC; Bank of Tokyo) (d,f)....................................... 3,000,000 3,000,000
PENNSYLVANIA-.0%
Allegheny County Hospital Development Authority, Revenue, VRDN
(Presbyterian Health Center) 3.60% (Insured; MBIA) (f).................. 700,000 700,000
TENNESSEE-.3%
Franklin Industrial Development Board, Multi-Family Revenue, VRDN
(Landings Project) 3.55% (LOC; Citibank) (d,f).......................... 10,700,000 10,700,000
TEXAS-.7%
Brazos River Harbor Navigation District, Harbor Revenue, VRDN
(Dow Chemical Co. Project) 3.70% (f).................................... 5,200,000 5,200,000
El Paso Health Facilities Development Corp., Revenue, VRDN
(Providence Memorial Hospital) 3.55% (LOC; Fuji Bank) (d,f)............. 7,100,000 7,100,000
Gulf Coast Waste Disposal Authority, SWDR, VRDN
(Amoco Oil Co. Project) 3.65% (f)....................................... 14,100,000 14,100,000
UTAH-.6%
Salt Lake County, PCR, Refunding, VRDN (Service Station Holdings Project)
3.40% (f)............................................................... 24,200,000 24,200,000
WASHINGTON-.8%
Student Loan Finance Association, Revenue (Guaranteed Student Loan Program)
VRDN 3.55% (LOC; Sanwa Bank) (d,f)...................................... 32,800,000 32,800,000
----------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $277,350,000)..................................................... $ 277,350,000
================
TOTAL INVESTMENTS-100.0%
(cost $3,813,966,661)................................................... $3,956,024,596
================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL BOND FUND, INC.
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BIGI Bond Investors Guaranty Insurance LR Lease Revenue
CGIC Capital Guaranty Insurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FHA Federal Housing Administration RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GO General Obligation SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
IDR Industrial Development Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- ---------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aa AAA 24.4%
AA Aa AA 26.2
A A A 18.5
BBB Baa BBB 16.6
BB Ba BB .8
F1 MIG1/P1 SP1/A1 6.9
Not Rated (h) Not Rated (h) Not Rated (h) 6.6
--------------
100.0%
==============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Partially held by custodian as collateral for delayed delivery
security.
(b) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(c) Wholly held by custodian as collateral for delayed delivery
security.
(d) Secured by letters of credit.
(e) Purchased on a delayed delivery basis.
(f) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(g) Fitch currently provides creditworthiness information for a limited
number of investments.
(h) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
(i) At August 31, 1995, the Fund had $987,210,790 (25.1% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from housing projects.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $3,813,966,661)-see statement................................... $3,956,024,596
Interest receivable..................................................... 63,285,958
Prepaid expenses........................................................ 39,050
---------------------
4,019,349,604
LIABILITIES:
Due to The Dreyfus Corporation......................................... $ 2,150,354
Due to Custodian............................................ . 4,363,471
Payable for investment securities purchased............................. 75,671,154
Payable for Common Stock redeemed....................................... 112,832
Accrued expenses........................................................ 317,926 82,615,737
--------------------- ---------------------
NET ASSETS.................................................................. $3,936,733,867
=====================
REPRESENTED BY:
Paid-in capital......................................................... $3,839,031,716
Accumulated net realized (loss) on investments.......................... (44,355,784)
Accumulated net unrealized appreciation on investments-Note 3........... 142,057,935
---------------------
NET ASSETS at value applicable to 317,222,886 shares outstanding
(600 million shares of $.01 par value Common Stock authorized)......... $3,936,733,867
=====================
NET ASSET VALUE, offering and redemption price per share
($3,936,733,867 / 317,222,886 shares)................................... $12.41
==============
See notes to financial statements.
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $249,365,968
EXPENSES:
Management fee-Note 2(a).............................................. $ 22,188,564
Shareholder servicing costs-Note 2(b)................................. 3,282,191
Custodian fees........................................................ 242,444
Professional fees..................................................... 128,864
Registration fees..................................................... 128,055
Prospectus and shareholders' reports.................................. 117,328
Directors' fees and expenses-Note 2(c)................................ 48,523
Miscellaneous......................................................... 131,063
--------------------
TOTAL EXPENSES.................................................... 26,267,032
---------------------
INVESTMENT INCOME-NET............................................. 223,098,936
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $(44,338,112)
Net unrealized appreciation on investments.............................. 78,567,175
---------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 34,229,063
---------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $257,327,999
=====================
See notes to financial statements.
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED AUGUST 31,
----------------------------------------
1994 1995
----------------- -----------------
OPERATIONS:
Investment income-net................................................. $ 249,332,136 $ 223,098,936
Net realized gain (loss) on investments............................... 40,066,377 (44,338,112)
Net unrealized appreciation (depreciation) on investments for the year (349,064,340) 78,567,175
----------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..... (59,665,827) 257,327,999
----------------- ------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................. (249,332,136) (223,098,936)
Net realized gain on investments...................................... (110,423,674) (22,638,307)
----------------- ------------------
TOTAL DIVIDENDS..................................................... (359,755,810) (245,737,243)
----------------- ------------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold......................................... 3,541,071,359 4,846,241,789
Dividends reinvested.................................................. 239,678,805 155,978,774
Cost of shares redeemed............................................... (4,077,240,448) (5,085,554,561)
----------------- ------------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............ (296,490,284) (83,333,998)
----------------- ------------------
TOTAL (DECREASE) IN NET ASSETS.................................. (715,911,921) (71,743,242)
NET ASSETS:
Beginning of year..................................................... . 4,724,389,030 4,008,477,109
---------------- ------------------
End of year........................................................... $ 4,008,477,109 $ 3,936,733,867
================ ==================
SHARES SHARES
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold........................................................... 271,726,312 400,686,274
Shares issued for dividends reinvested................................ 18,369,588 12,969,173
Shares redeemed....................................................... (311,906,108) (419,990,511)
---------------- ---------------
NET (DECREASE) IN SHARES OUTSTANDING................................ (21,810,208) (6,335,064)
================ ===============
See notes to financial statements.
</TABLE>
DREYFUS MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to Page 4 of the Fund's Prospectus dated
December 29, 1995.
See notes to financial statements.
DREYFUS MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
(A) PORTFOLIO VALUATION: The Fund's investments are valued each business
day by an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the
Service are valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of municipal securities of
comparable quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately
$15,947,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to August 31,
1995. The carryover does not include net realized securities losses from
November 1, 1994 through August 31, 1995 which are treated for Federal income
tax purposes as arising in fiscal 1996. If not applied, the carryover expires
in fiscal 2003.
DREYFUS MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of 6/10ths of 1% of the
average daily value of the Fund's net assets and is payable monthly. However,
pursuant to the court approved settlement of previously disclosed litigation,
commencing October 15, 1988, the Manager has agreed to make payments to the
Fund for 10 years, ranging from $0 to $1 million per year depending upon
average daily net assets of the Fund. The management fee for the year ended
August 31, 1995 was reduced by $350,000 pursuant to the settlement of
litigation.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest
on borrowings and extraordinary expenses, exceed 1 1\2% of the average value
of the Fund's net assets for any full fiscal year. No expense reimbursement
was required for the year ended August 31, 1995.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average net assets, for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the year ended August 31, 1995, the Fund was charged an aggregate of
$1,520,849 pursuant to the Shareholder Services Plan.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $6,988,266,905 and $7,041,881,503, respectively, for the year
ended August 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At August 31, 1995, accumulated net unrealized appreciation on
investments was $142,057,935, consisting of $157,147,406 gross unrealized
appreciation and $15,089,471 gross unrealized depreciation.
At August 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS MUNICIPAL BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Municipal Bond Fund, Inc., including the statement of investments, as
of August 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights 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 and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1995 by correspondence with the custodian
and brokers. 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 and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Municipal Bond Fund, Inc. at August 31, 1995, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
New York, New York
October 4, 1995
DREYFUS MUNICIPAL BOND FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for each of the ten years in
the period ended August 31, 1995.
Included in Part B of the Registration Statement:
Statement of Investments-- August 31, 1995
Statement of Assets and Liabilities-- August 31, 1995
Statement of Operations--year ended August 31, 1995
Statement of Changes in Net Assets--for each of the
years ended August 31, 1994 and 1995
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors,
dated October 4, 1995
All schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1)(a) Articles of Incorporation and Articles of Amendment.
(b) The Registrant's Articles of Amendment are incorporated by
reference to Exhibit (1)(c) of Post-Effective Amendment No. 33
filed on October 29, 1993.
(2) By-Laws.
(5) The Registrant's Management Agreement dated August 24, 1994 is
incorporated by reference to Exhibit (5) of Post-Effective
Amendment No. 34 to the Registration Statement on Form N-1A, filed
on October 28, 1994.
(6)(a) The Registrant's Distribution Agreement dated August 24, 1994 is
incorporated by reference to Exhibit (6)(a) of Post-Effective
Amendment No. 34 to the Registration Statement on Form N-1A, filed
on October 28, 1994.
(8)(a) Amended and Restated Custody Agreement.
(8)(b) The Registrant's Sub-Custodian Agreements are incorporated by
reference to Exhibit 8(b) of Post-Effective Amendment No. 34 to
the Registration Statement on Form N-1A, filed on October 28,
1994.
(9) The Registrant's Shareholder Services Plan dated October 24, 1994
is incorporated by reference to Exhibit (9) of Post-Effective
Amendment No. 34 to the Registration Statement on Form N-1A, filed
on October 28, 1994.
(10) Opinion and consent of Registrant's counsel.
(11) Consent of Independent Auditors.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 33 to
the Registration Statement on Form N-1A, filed on October 29,
1993.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney for David W. Burke, Hodding Carter,
III, Ehud Houminer, Richard C. Leone, Hans C. Mautner
and John E. Zuccotti are incorporated by reference to
Other Exhibits (a) of Post-Effective Amendment No. 34 to
the Registration Statement on Form N-1A, filed on
October 28, 1994.
(b) Powers of Attorney for Joseph S. DiMartino and Robin A.
Smith.
(c) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Post-Effective Amendment No. 34 to
the Registration Statement on Form N-1A, filed on
October 24, 1994.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of October 24, 1995
______________ _______________________________
Common Stock
(Par value $.01) 68,393
Item 27. Indemnification
_______ _______________
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is indemnified,
is incorporated by reference to Item 4 of Post-Effective Amendment
No. 19 to the Registration Statement on Form N-1A, filed on
December 29, 1982.
The Management Agreement and Distribution Agreement are
incorporated by reference to Exhibits (5) and (6), respectively, of
Post-Effective Amendment No. 34 to the Registration Statement on
Form N-1A, filed on October 28, 1994.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for sponsored
investment companies registered under the Investment Company Act
of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of other investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as a registered broker-dealer of
shares of investment companies sponsored by Dreyfus and of other
investment companies for which Dreyfus acts as investment
adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund
JULIAN M. SMERLING None
Director
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
DAVID B. TRUMAN Former Director:
(cont'd) Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board and Dreyfus Acquisition Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
World Balanced Fund+++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation*;
Operating Officer, Former Executive Vice President:
and a Director Prudential Investment Corporation
751 Board Street
Newark, New Jersey 07102
STEPHEN E. CANTER Former Chairman and Chief Executive Officer:
Vice Chairman and Kleinwort Benson Investment Management
Chief Investment Officer, Americas Inc.*
and a Director Director:
The Dreyfus Trust Company++
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
Executive Vice President:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Director:
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization, Inc.***;
The Truepenny Corporation*;
PHILIP L. TOIA Formerly, Senior Vice President:
(cont'd) The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
Dreyfus Service Corporation*
DIANE M. COFFEY None
Vice President-
Corporate Communications
ELIE M. GENADRY President:
Vice President- Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Vice President:
The Dreyfus Trust Company++
HENRY D. GOTTMANN Executive Vice President:
Vice President-Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals, Inc.*
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Director and Secretary:
Dreyfus Acquisition Corporation*;
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director, Vice President and Treasurer:
Lion Management, Inc.*;
Director:
The Dreyfus Trust Company++;
Secretary:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President- Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
MARK N. JACOBS Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
Legal and Secretary Secretary:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation
Services One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit Corporation*;
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Edison Electric Index Fund, Inc.
18) Dreyfus Florida Intermediate Municipal Bond Fund
19) Dreyfus Florida Municipal Money Market Fund
20) Dreyfus Growth and Value Funds, Inc.
21) The Dreyfus Fund Incorporated
22) Dreyfus Global Bond Fund, Inc.
23) Dreyfus Global Growth, L.P. (A Strategic Fund)
24) Dreyfus GNMA Fund, Inc.
25) Dreyfus Government Cash Management
26) Dreyfus Growth and Income Fund, Inc.
27) Dreyfus Growth Opportunity Fund, Inc.
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Equity Fund, Inc.
33) Dreyfus Investors GNMA Fund
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) The Dreyfus/Laurel Investment Series
38) Dreyfus Life and Annuity Index Fund, Inc.
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus Michigan Municipal Money Market Fund, Inc.
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Insured Tax Exempt Bond Fund
54) Dreyfus New York Municipal Cash Management
55) Dreyfus New York Tax Exempt Bond Fund, Inc.
56) Dreyfus New York Tax Exempt Intermediate Bond Fund
57) Dreyfus New York Tax Exempt Money Market Fund
58) Dreyfus Ohio Municipal Money Market Fund, Inc.
59) Dreyfus 100% U.S. Treasury Intermediate Term Fund
60) Dreyfus 100% U.S. Treasury Long Term Fund
61) Dreyfus 100% U.S. Treasury Money Market Fund
62) Dreyfus 100% U.S. Treasury Short Term Fund
63) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
64) Dreyfus Pennsylvania Municipal Money Market Fund
65) Dreyfus Short-Intermediate Government Fund
66) Dreyfus Short-Intermediate Municipal Bond Fund
67) Dreyfus Short-Term Income Fund, Inc.
68) The Dreyfus Socially Responsible Growth Fund, Inc.
69) Dreyfus Strategic Growth, L.P.
70) Dreyfus Strategic Income
71) Dreyfus Strategic Investing
72) Dreyfus Tax Exempt Cash Management
73) The Dreyfus Third Century Fund, Inc.
74) Dreyfus Treasury Cash Management
75) Dreyfus Treasury Prime Cash Management
76) Dreyfus Variable Investment Fund
77) Dreyfus-Wilshire Target Funds, Inc.
78) Dreyfus Worldwide Dollar Money Market Fund, Inc.
79) General California Municipal Bond Fund, Inc.
80) General California Municipal Money Market Fund
81) General Government Securities Money Market Fund, Inc.
82) General Money Market Fund, Inc.
83) General Municipal Bond Fund, Inc.
84) General Municipal Money Market Fund, Inc.
85) General New York Municipal Bond Fund, Inc.
86) General New York Municipal Money Market Fund
87) Pacifica Funds Trust -
Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
88) Peoples Index Fund, Inc.
89) Peoples S&P MidCap Index Fund, Inc.
90) Premier Insured Municipal Bond Fund
91) Premier California Municipal Bond Fund
92) Premier Capital Growth Fund, Inc.
93) Premier Global Investing, Inc.
94) Premier GNMA Fund
95) Premier Growth Fund, Inc.
96) Premier Municipal Bond Fund
97) Premier New York Municipal Bond Fund
98) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Operating Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Assistant
and Chief Financial Officer Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Frederick C. Dey++ Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Associate Vice President
General Counsel and Assistant
Secretary
Lynn H. Johnson+ Vice President None
Ruth D. Leibert++ Assistant Vice President Assistant
Secretary
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of common stock and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and State of New York on
the 27th day of October, 1995.
DREYFUS MUNICIPAL BOND FUND, INC.
BY: /s/Marie E. Connolly*
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
date indicated.
Signatures Title Date
__________________________ ______________________________ __________
/s/Marie E. Connolly* President and Treasurer (Principal 10/27/95
____________________________ Executive Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 10/27/95
____________________________ Accounting and Financial Officer)
Joseph F. Tower, III
/s/ Joseph S. DiMartino Chairman and Director 10/27/95
____________________________
Joseph S. DiMartino
/s/David W. Burke* Director 10/27/95
_____________________________
David W. Burke
/s/Hodding Carter, III* Director 10/27/95
_____________________________
Hodding Carter, III
/s/Ehud Houminer* Director 10/27/95
_____________________________
Ehud Houminer
/s/Richard C. Leone* Director 10/27/95
_____________________________
Richard C. Leone
/s/Hans C. Mautner* Director 10/27/95
_____________________________
Hans C. Mautner
/s/Robin A. Smith* Director 10/27/95
_____________________________
Robin A. Smith
/s/John E. Zuccotti* Director 10/27/95
_____________________________
John E. Zuccotti
*BY: /s/ Eric B. Fischman
__________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
(1)(a) Articles of Incorporation and Articles of Amendment
(2) By-Laws
(8)(a) Amended and Restated Custody Agreement
(10) Opinion and consent of Registrant's counsel
(11) Consent of Ernst & Young LLP, Independent Auditors
OTHER EXHIBITS
(b) Power of Attorney
ARTICLES OF INCORPORATION
OF
OVERBROOK BOND FUND, INC.
For the purposes of forming a stock corporation for one or
more lawful purposes under the provisions of ARTICLE 23 of the
Annotated Code of Maryland (hereinafter sometimes referred to as
the "General Corporation Law"), the natural person hereinafter
named as the person acting as the incorporator of the said
corporation does hereby adopt and sign the following Articles of
Incorporation of the corporation and does hereby acknowledge
that his adoption and signing thereof are his act:
FIRST: (1) The name, including the full given name and
surname, of the incorporator is Daniel C. Maclean III.
(2) The said incorporator's post office address,
including the street and number, if any, including the city or
county, and including the state of country, is 767 Fifth Avenue,
New York, New York 10022.
(3) The said incorporator is at least eighteen years
of age.
(4) The said incorporator is forming the corporation
named in these Articles of Incorporation under the General
Corporation Law of the State of Maryland.
SECOND: The name of the corporation (hereinafter called
the "corporation") is Overbrook Bond Fund, Inc.
THIRD: The corporation is formed for the following purpose
or purposes:
(a) to conduct, operate and carry on the business of
an investment company;
(b) to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, hold, pledge, sell, assign,
transfer, exchange, distribute or otherwise dispose of
bonds, debentures, notes, and other negotiable or non-
negotiable instruments, obligations and evidences of
indebtedness issued or guaranteed as to principal and
interest by the United States Government, or any agency or
instrumentality thereof, any state or local government, or
any agency or instrumentality thereof, or by any
corporation organized under the laws of the United States
or any state, territory or possession thereof or foreign
country, bank certificates of deposit, bank time deposits
and bankers' acceptances; to pay for the same in cash or by
the issue of stock, including treasury stock, bonds or
notes of the corporation or otherwise; and to exercise any
and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of
every kind and description, including without limitation,
the right to consent and otherwise act with respect
thereto, with power to designate one or more persons,
firms, associations or corporations to exercise any of said
rights, powers and privileges in respect of any said
instruments;
(c) to borrow money or otherwise obtain credit and to
secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the corporation, and
to endorse, guarantee or undertake the performance of any
obligation, contract or engagement of any other person,
firm, association or corporation;
(d) to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of,
transfer, and otherwise deal in, shares of Common Stock of
the corporation, including shares of Common Stock of the
corporation in fractional denominations, and to apply to
any such repurchase, redemption, retirement, cancellation
or acquisition of shares of Common Stock of the corporation
any funds or property of the corporation whether capital or
surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the State of Maryland.
(e) to conduct its business, promote its purposes and
carry on its operations in any and all of its branches and
maintain offices both within and without the State of
Maryland, in any States of the United States of America, in
the District of Columbia and in any other parts of the
world; and
(f) to do all and everything necessary, suitable,
convenient, or proper for the conduct, promotion, and
attainment of any the businesses and purposes herein
specified or which at any time may be incidental thereto or
may appear conducive to or expedient for the accomplishment
of any of such businesses and purposes and which might be
engaged in or carried on by a corporation incorporated or
organized under the General Corporation Law of the State of
Maryland, and to have and exercise all of the powers
conferred by the laws of the State of Maryland upon
corporations incorporated or organized under the General
Corporation Law of the State of Maryland.
The foregoing provisions of this Article THIRD shall be
construed both as purposes and powers and each as an independent
purpose and power. The foregoing enumeration of specific
purposes and powers shall not be held to limit or restrict in
any manner the purposes and powers of the corporation, and the
purposes and powers herein specified shall, except when
otherwise provided in this Article THIRD, be in no wise limited
or restricted by reference to, or inference from, the terms of
any provision of this or any other Article of these Articles of
Incorporation; provided, that the corporation shall not conduct
any business, promote any purpose, or exercise any power or
privilege within or without the State of Maryland which, under
the laws thereof, the corporation may not lawfully conduct,
promote, or exercise.
FOURTH: The post office address, including street and
number, if any, and the city or county of the principal office
of the corporation within the State of Maryland, and of the
resident agent of the corporation within the State of Maryland,
is The Corporation Trust Incorporated, First Maryland Building,
25 South Charles Street, Baltimore, Maryland 21201. The words
"principal office" and "resident agent" as used herein shall
have the meaning ascribed to them by the General Corporation
Law.
FIFTH: (1) The total number of shares of stock which the
corporation has authority to issue is fifty million
(50,000,000), all of which are of a par value of one cent ($.01)
each and are designated as Common Stock.
(2) The aggregate par value of all the authorized
shares of stock is five hundred thousand dollars ($500,000).
(3) The Board of Directors of the corporation is
authorized, from time to time, to fix the price or the minimum
price or the consideration or minimum consideration for, and to
issue, the shares of stock of the corporation.
(4) The Board of Directors of the corporation is
authorized, from time to time, to classify or to reclassify, as
the case may be, any unissued shares of stock of the
corporation.
(5) Notwithstanding any provisions of the General
Corporation Law requiring a greater proportion than a majority
of the votes entitled to be cast in order to take or authorize
any action, any such action may be taken or authorized upon the
concurrence of at least a majority of the aggregate number of
votes entitled to be cast thereon.
(6) The corporation may issue shares of its Common
Stock in fractional denominations to the same extent as its
whole shares, and shares in fractional denominations shall be
shares of Common Stock having proportionately to the respective
fractions represented thereby all the rights of whole shares,
including, without limitation, the right to vote, the right to
receive dividends and distributions and the right to participate
upon liquidation of this corporation.
(7) All shares of the Common Stock of the corporation
now or hereafter authorized shall be "subject to redemption" and
"redeemable", in the sense used in the General Corporation Law
of the State of Maryland authorizing the formation of
corporations, at the redemption or purchase price for any such
shares, determined in the manner set out in these Articles of
Incorporation or in any amendment thereto; provided, however,
that the corporation shall have the right, at its option, to
refuse to redeem the shares of stock at less than the par value
thereof. In the absence of any specification as to the purpose
for which shares of the Common Stock of the corporation are
redeemed, shares so redeemed shall be deemed to be "purchased
for retirement" in the sense contemplated by the laws of the
State of Maryland and the number of the authorized shares of the
Common Stock of the corporation shall not be reduced by the
number of any shares repurchased by it.
(8) No holder of any of the shares of any class of
the corporation shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any shares of any class of the
corporation which the corporation proposes to grant for the
purchase of any class of the corporation or for the purchase of
any shares, bonds, securities, or obligations of the corporation
which are convertible into or exchangeable for, or which carry
any rights to subscribe for, purchase, or otherwise acquire
shares of any class of the corporation; and any and all of such
shares, bonds, securities or obligations of the corporation,
whether now or hereafter authorized or created, may be issued,
or may be reissued or transferred if the same have been
reacquired and have treasury status, and any and all of such
rights and options may be granted by the Board of Directors to
such persons, firms, corporations and associations, and for such
lawful consideration, and on such terms, as the Board of
Directors in its discretion may determine, without first
offering the same, or any thereof, to any said holder.
SIXTH: (1) The number of directors of the corporation,
until such number shall be increased or decreased pursuant to
the by-laws of the corporation, is three. The number of
directors shall never be less than the number prescribed by the
General Corporation Law.
(2) The names of the persons who shall act as
directors of the corporation until the first annual meeting or
until their successors are duly chosen and qualify are as
follows:
Howard Stein
Jerome S. Hardy
Lawrence M. Greene
(3) The initial by-laws of the corporation shall be
adopted by the directors at their organizational meeting or by
their informal written action, as the case may be. Thereafter,
the power to make, alter, and repeal the by-laws of the
corporation shall be vested in the Board of Directors of the
corporation.
(4) Any determination made in good faith and, so far
as accounting matters are involved, in accordance with generally
accepted accounting principles, by or pursuant to the direction
of the Board of Directors, as to: the amount of the assets,
debts, obligations, or liabilities of the corporation; the
amount of any reserves or charges set up and the propriety
thereof; the time of or purpose for creating such reserves or
charges; the use, alteration or cancellation of any reserves or
charges (whether or not any debt, obligation or liability for
which such reserves or charges shall have been created shall
have been paid or discharged or shall be then or thereafter
required to be paid or discharged); the price or closing bid or
asked price of any investment owned or held by the corporation;
the market value of any investment or fair value of any other
asset of the corporation; the number of shares of the
corporation outstanding; the estimated expense to the
corporation in connection with purchases of its shares; the
ability to liquidate investments in orderly fashion; the extent
to which it is practicable to deliver a cross-section of the
portfolio of the corporation in payment for any such shares, or
as to any other matters relating to the issue, sale, purchase
and/or other acquisition or disposition of investments or shares
of the corporation, shall be final and conclusive, and shall be
binding upon the corporation and all holders of its shares,
past, present and future, and shares of the corporation are
issued and sold on the condition and understanding that any and
all such determinations shall be binding as aforesaid.
SEVENTH: (1) The corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation) by reason
of the fact that he is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent or
another corporation, partnership, joint venture, trust, or other
enterprise. The indemnification shall be against expenses
(including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in
connection with the action, suit, or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(2) The corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture,
trust or other enterprise. The indemnification shall be against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of
the action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the corporation; except that no indemnification
shall be made in respect of any claim, issue, or matter as to
which the person has been adjudged to be liable for negligence
or misconduct in the performance of his duty to the corporation,
unless and only to the extent that the court in which the action
or suit was brought, or a court of equity in the county in which
the corporation has its principal office, determines upon
application that, despite the adjudication of liability but in
view of all circumstances of the case, the person is fairly and
reasonably entitled to indemnity for the expenses which the
court shall deem proper.
(3) Unless otherwise expressly provided in these
Articles of Incorporation, to the extent that a director,
officer, employee, or agent of the corporation has been
successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subsection (1) or (2), or in
defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under subsection (1) or (2)
(unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee, or
agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsection (1) or
(2). The determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors
who were not parties to the action, suit, or proceeding, or (2)
if a quorum is not obtainable, or, even if obtainable a quorum
of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders in
accordance with the Articles of Incorporation and by-laws of the
corporation.
(5) Expenses (including attorneys' fees) incurred in
defending a civil or criminal action, suit or proceeding shall
be paid by the corporation in advance of the final disposition
thereof if authorized in the specific case by a preliminary
determination following one of the procedures set forth in the
second sentence of subsection (4) that there is a reasonable
basis for a belief that the director, officer, employee or agent
met the applicable standard of conduct set forth in subsection
(1) or (2), upon receipt of an undertaking by or on behalf of
the director, officer, employee, or agent reasonably assuring
that such amount will be repaid unless it shall ultimately be
determined that he is entitled to be indemnified by the
corporation as authorized in this section.
(6) The indemnification provided by this section
shall not be deemed exclusive of any other rights to which a
person may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding the office, and shall continue as to a
person who has ceased to be a director, officer, employee, or
agent and inure to the benefit of the heirs, executors, and
administrators of the person.
(7) The corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against the
liability under the provisions of this section.
(8) For the purposes of this Article, references to
"the corporation" include any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors,
officers, employees or agents as well as the resulting or
surviving corporation; so that any person who is or was a
director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such
constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise shall stand in the same position under the
provisions of this section with respect to the resulting or
surviving corporation as he would have with respect to such a
constituent corporation if its separate existence had continued.
(9) Anything herein contained to the contrary
notwithstanding, no officer or director of the corporation shall
be indemnified for any liability to the corporation or its
security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office.
EIGHTH: Any holder of shares of Common Stock of the
corporation shall be entitled to require the corporation to
repurchase, and the corporation shall be obligated to repurchase
at the option of such holder all or any part of the shares of
Common Stock of the corporation owned by said holder, at the
repurchase price, pursuant to the method, upon the terms and
subject to the conditions hereinafter set forth:
(a) Certificates (if issued) for shares of Common
Stock shall be presented for repurchase in proper form for
transfer to the corporation or the agent of the corporation
appointed for such purpose and there shall be presented a
written request that the corporation repurchase all or any
part of the shares represented thereby;
(b) The repurchase price per share shall be the net
asset value per share as determined by the corporation at
such time or times as the Board of Directors of the
corporation shall designate, but not later than as at the
close of the New York Stock Exchange on the bank business
day next succeeding the time of presentation of
certificates for shares, if issued, and an appropriate
request for repurchase or such other time as the Board of
Directors may designate in accordance with any provision of
the Investment Company Act of 1940, any rule or regulation
thereunder, or any rule or regulation made or adopted by
any securities association registered under the Securities
Exchange Act of 1934, as determined by the Board of
Directors of the corporation.
(c) Net asset value shall be determined by dividing:
(i) The total value of the assets of the
corporation determined as provided in Subsection (d)
below less, to the extent determined by or pursuant to
the direction of the Board of Directors in accordance
with generally accepted accounting principles, all
debts, obligations and liabilities of the corporation
(which debts, obligations and liabilities shall
include, without limitation of the generality of the
foregoing, any and all debts, obligations,
liabilities, or claims, of any and every kind and
nature, fixed, accrued, unmatured or contingent,
including the estimated accrued expenses of management
and supervision, administration and distribution and
any reserves or charges for any or all of the
foregoing, whether for taxes, expenses, contingencies,
or otherwise, and the price of Common Stock redeemed
but not paid for) but excluding the corporation's
liability upon its shares and its surplus by:
(ii) The total number of shares of the
corporation outstanding. (Shares sold by the
corporation whether or not paid for shall be treated
as outstanding and shares purchased or redeemed by the
corporation whether or not paid for and treasury
shares shall be treated as not outstanding, provided,
that the Board of Directors may determine whether
shares sold or redeemed on the date of computation
shall be included.)
The Board of Directors is empowered, in its absolute
discretion, to establish other methods for determining such
net asset value whenever such other methods are deemed by
it to be necessary in order to enable the corporation to
comply with, or are deemed by it to be desirable provided
they are not inconsistent with, any provision of the
Investment Company Act of 1940 or any rule or regulation
thereunder including any rule or regulation made or adopted
pursuant to Section 22 of the Investment Company Act of
1940 by the Securities and Exchange Commission or any
securities association registered under the Securities
Exchange Act of 1934.
(d) In determining for the purposes of these Articles
of Incorporation the total value of the assets of the
corporation at any time, investments and any other assets
of the corporation shall be valued in such manner as may be
determined from time to time by the Board of Directors.
(e) Payment of the repurchase price by the
corporation may be made either in cash or in securities or
other assets at the time owned by the corporation or partly
in cash and partly in securities or other assets at the
time owned by the corporation. The value of any part of
such payment to be made in securities or other assets of
the corporation shall be the value employed in determining
the repurchase price. Payment of the repurchase price
shall be made on or before the seventh day following the
day on which the shares are properly presented for
repurchase hereunder, except that delivery of any
securities included in any such payment shall be made as
promptly as any necessary transfers on the books of the
issuers whose securities are to be delivered may be made,
and except as postponement of the date of payment may be
permissible under the Investment Company Act of 1940 and
the Rules and Regulations thereunder.
The corporation, pursuant to resolution of the Board
of Directors, may deduct from the payment made for any
shares repurchased a liquidating charge not in excess of
one per cent (1%) of the repurchase price of the shares so
repurchased, and the Board of Directors may alter or
suspend any such liquidating charge from time to time.
(f) The right of any holder of shares of Common Stock
repurchased by the corporation as provided in this Article
EIGHTH to receive dividends or distributions thereon and
all other rights of such holder with respect to such shares
shall terminate at the time as of which the repurchase
price of such shares is determined, except the right of
such holder to receive (i) the repurchase price of such
shares from the corporation in accordance with the
provisions hereof, and (ii) any dividend or distribution to
which such holder had previously become entitled as the
record holder of such shares on the record date for such
dividend or distribution.
(g) Repurchase of shares of Common Stock by the
corporation is conditional upon the corporation having
funds or property legally available therefor.
(h) The corporation, either directly or through an
agent, may repurchase its shares, out of funds legally
available therefor, upon such terms and conditions and for
such consideration as the Board of Directors shall deem
advisable, by agreement with the owner at a price not
exceeding the net asset value per share as determined by
the corporation at such time or times as the Board of
Directors of the corporation shall designate, less a charge
not to exceed one per cent (1%) of such net asset value, if
and as fixed by resolution of the Board of Directors of the
corporation from time to time, and take all other steps
deemed necessary or advisable in connection therewith.
(i) The corporation, pursuant to resolution of the
Board of Directors, may cause the repurchase, upon the
terms set forth in such resolution and in subsections (b)
through (g) and subsection (j) of this Article EIGHTH, of
shares of Common Stock of stockholders owning fifty or
fewer such shares. Notwithstanding any other provision of
this Article EIGHTH, if certificates representing such
shares have been issued, the repurchase price need not be
paid by the corporation until such certificates are
presented in proper form for transfer to the corporation or
the agent of the corporation appointed for such purpose;
however, the repurchase shall be effective, in accordance
with the resolution of the Board of Directors, regardless
of whether or not such presentation has been made.
(j) The obligations set forth in this Article EIGHTH
may be suspended or postponed, (1) for any period (a)
during which the New York Stock Exchange is closed other
than customary week-end and holiday closings or (b) during
which trading on the New York Stock Exchange is restricted,
(2) for any period during which an emergency exists as a
result of which (a) the disposal by the corporation of
investments owned by it is not reasonably practicable, or
(b) it is not reasonably practicable for the corporation
fairly to determine the value of its net assets or (3) for
such other periods as the Federal Securities and Exchange
Commission or any successor governmental authority may by
order permit for the protection of security holders of the
corporation.
NINTH: From time to time any of the provisions of these
Articles of Incorporation may be amended, altered or repealed,
and other provisions authorized by the General Corporation Law
at the time in force may be added or inserted in the manner and
at the time prescribed by said Law, and all rights at any time
conferred upon the stockholders of the corporation by these
Articles of Incorporation are granted subject to the provisions
of this Article.
IN WITNESS WHEREOF, I have adopted and signed these
Articles of Incorporation and do hereby acknowledge that the
adoption and signing are my act.
DATED: July 9, 1976
/s/Daniel C. Maclean
Daniel C. Maclean III, Incorporator
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I HEREBY CERTIFY that on July 9, 1976 before me the
subscriber, a notary public of the State of New York in and for
the County of New York, personally appeared Daniel C. Maclean
III, known to me, and acknowledged that he is the Incorporator
who executed the foregoing Articles of Incorporation and further
made oath in due form of law that the matters and facts set
forth in said Articles of Incorporation are true to the best of
his knowledge, information and belief.
WITNESS may hand and notarial seal, the day and year last
above written.
/s/Stella Freeberg
Stella Freeberg
DREYFUS TAX EXEMPT BOND FUND, INC.
ARTICLES OF AMENDMENT
DREYFUS TAX EXEMPT BOND FUND, INC., a Maryland
corporation having its principal office in the State of Maryland
at 32 South Street, Baltimore, Maryland (hereinafter called the
Corporation), hereby certifies to the State Department of
Assessments and Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby
amended by striking out paragraphs (1) and (2) of Article FIFTH
of the Articles of Incorporation, as heretofore amended, and
inserting in lieu thereof the following:
"FIFTH: (1) The total number of shares of stock
which the Corporation has authority to issue is six hundred
million (600,000,000), all of which are of a par value of
one cent ($.01) each and are designated as Common Stock.
(2) The aggregate par value of all the
authorized shares of stock is Six Million Dollars
($6,000,000.00)."
SECOND: The board of directors of the Corporation on
September 19, 1985, duly adopted a resolution in which was set
forth the foregoing amendment to the charter, declaring that the
said amendment of the charter as proposed was advisable and
directing that it be submitted for action thereon by the
stockholders of the Corporation at an annual meeting to be held
on December 19, 1985.
THIRD: Notice setting forth a summary of the changes
to be effected by said amendment of the charter and stating that
a purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all
stockholders entitled to vote thereon. The amendment of the
charter of the Corporation as hereinabove set forth was approved
by the stockholders of the Corporation at said meeting by the
affirmative vote of more than a majority of the total number of
votes entitled to be cast thereon.
FOURTH: The amendment of the charter of the
Corporation as hereinabove set forth has been duly advised by
the board of directors and approved by the stockholders of the
Corporation.
FIFTH: (a) The total number of shares of stock which
the Corporation was heretofore authorized to issue is three
hundred million (300,000,000) shares, all of one class, of the
par value of one cent ($.01) each and of the aggregate par value
of Three Million Dollars ($3,000,000.00).
(b) The total number of shares of stock is
increased by this amendment to six hundred million (600,000,000)
shares, all of one class, of the par value of one cent ($.01),
and of the aggregate par value of Six Million Dollars
($6,000,000.00).
IN WITNESS WHEREOF, Dreyfus Tax Exempt Bond Fund, Inc.
has caused these presents to be signed in its name and on its
behalf by its President and witnessed by its Secretary on
December 19, 1985.
DREYFUS TAX EXEMPT BOND FUND, INC.
By: /s/Richard J. Moynihan
Richard J. Moynihan, President
Witness:
/s/Daniel C. Maclean
Daniel C. Maclean, Secretary
THE UNDERSIGNED, President of Dreyfus Tax Exempt Bond
Fund, Inc., who executed on behalf of said Corporation the
foregoing Articles of Amendment, of which this certificate is
made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Articles of Amendment to be the
corporate act of said Corporation and further certifies that, to
the best of his knowledge, information and belief, the matters
and facts set forth therein with respect to the approval thereof
are true in all material respects, under the penalties of
perjury.
/s/Richard J. Moynihan
Richard J. Moynihan, President
Sworn to before me this
19th day of December, 1985.
/s/Charles J. DeMarco
Notary Public
ARTICLES OF AMENDMENT
OF
DREYFUS TAX EXEMPT BOND FUND, INC.
* * * * *
DREYFUS TAX EXEMPT BOND FUND, INC., a Maryland
Corporation having its principal office in Baltimore City,
Maryland (hereinafter called the Corporation), hereby certifies
to the State Department of Assessments and Taxation of Maryland,
that:
FIRST: The charter of the Corporation is hereby
amended by striking out paragraphs (1) and (2) of Article Fifth
of the Articles of Incorporation as heretofore amended, and
inserting in lieu thereof the following:
"FIFTH: (1) The total number of shares of stock
which the Corporation has authority to issue is three
hundred million (300,000,000), all of which are of a par
value of one cent ($.01) each and are designated as Common
Stock.
(2) The aggregate par value of all the
authorized shares of stock is Three Million Dollars
($3,000,000.00)."
SECOND: The board of directors of the Corporation on
February 17, 1977, duly adopted a resolution in which was set
forth the foregoing amendment to the charter, declaring that the
said amendment of the charter as proposed was advisable and
directing that it be submitted for action thereon by the
stockholders of the Corporation at a special meeting to be held
on May 19, 1977.
THIRD: Notices setting forth a summary of the changes
to be affected by said amendment of the charter and stating that
a purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all
stockholders entitled to vote thereon. The amendment of the
charter of the Corporation as hereinabove set forth was approved
by the stockholders of the Corporation at said meeting by the
affirmative vote of two-thirds (2/3) of all the votes entitled
to be cast thereon.
FOURTH: (a) The total number of shares of stock
which the Corporation was heretofore authorized to issue is
fifty million (50,000,000) shares, all of one class, of the par
value of one cent ($.01) each and of the aggregate par value of
Five Hundred Thousand Dollars ($500,000.00).
(b) The total number of shares of stock is
increased by this amendment to three hundred million
(300,000,000) shares, all of one class, of the par value of one
cent ($.01) and of the aggregate par value of Three Million
Dollars ($3,000,000.00).
IN WITNESS WHEREOF, DREYFUS TAX EXEMPT BOND FUND, INC.
has caused these presents to be signed in its name and on its
behalf by its President, and witnessed by its Secretary on June
8, 1977.
DREYFUS TAX EXEMPT BOND FUND, INC.
By: /s/Richard J. Moynihan, PRESIDENT
Richard J. Moynihan, President
WITNESS: (ATTEST)
/s/Daniel C. Maclean, SECRETARY
Daniel C. Maclean, Secretary
THE UNDERSIGNED, President of DREYFUS TAX EXEMPT BOND
FUND, INC., who executed on behalf of said corporation the
foregoing Articles of Amendment, of which this certificate is
made a part, hereby acknowledges, in the name and on behalf of
said corporation, the foregoing Articles of Amendment to be the
corporate act of said corporation and further certifies that, to
the best of his knowledge, information and belief, the matters
and facts set forth therein with respect to the approval thereof
are true in all material respects, under the penalties of
perjury.
/s/Richard J. Moynihan, PRESIDENT
Richard J. Moynihan, President
ARTICLES OF AMENDMENT
OF
OVERBROOK BOND FUND, INC.
* * * * *
OVERBROOK BOND FUND, INC., a Maryland Corporation,
having its principal office in Baltimore City, Maryland
(hereinafter called the Corporation), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby
amended by striking out Article "Second" of the Articles of
Incorporation and inserting in lieu thereof the following:
"Second: The name of the corporation is DREYFUS TAX
EXEMPT BOND FUND, INC."
SECOND: The board of directors of the Corporation by
unanimous written consent pursuant to Section 2-408 of
Corporations and Associations Article of the Annotated Code of
Maryland duly adopted a resolution in which was set forth the
foregoing amendment to the charter, declaring that the said
amendment of the charter as proposed was advisable and directing
that it be submitted for action thereon by the stockholders of
the Corporation.
THIRD: That the said amendment has been consented to
and authorized by the holders of all the issued and outstanding
stock, entitled to vote, by a written consent given in
accordance with the provisions of Section 2-505 of Corporations
and Associations Article of the Annotated Code of Maryland, and
filed with the records of stockholders' meetings.
FOURTH: The amendment of the charter of the
Corporation as hereinabove set forth has been duly advised by
the board of directors and approved by the stockholders of the
Corporation.
IN WITNESS WHEREOF, OVERBROOK BOND FUND, INC., has
caused these presents to be signed in its name and on its behalf
by its President and witnessed by its Secretary on August 31,
1976.
OVERBROOK BOND FUND, INC.
By:/s/Jerome S. Hardy
Jerome S. Hardy, President
WITNESS: (ATTEST)
/s/Daniel C. Maclean
Daniel C. Maclean, Secretary
THE UNDERSIGNED, President of OVERBROOK BOND FUND,
INC., who executed on behalf of said corporation the foregoing
Articles of Amendment, of which this certificate is made a part,
hereby acknowledges, in the name and on behalf of said
corporation, the foregoing Articles of Amendment to be the
corporate act of said corporation and further certifies that, to
the best of his knowledge, information and belief, the matters
and facts set forth therein with respect to the approval thereof
are true in all material respects, under the penalties of
perjury.
/s/Jerome S. Hardy
Jerome S. Hardy, President
BY-LAWS
OF
DREYFUS TAX EXEMPT BOND FUND, INC.
(A Maryland Corporation)
__________
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates
representing shares of stock shall set forth thereon the
statements prescribed by Section 2-211 of the Maryland General
Corporation Law ("General Corporation Law") and by any other
applicable provision of law and shall be signed by the President
or a Vice President and countersigned by the Secretary or an As-
sistant Secretary or the Treasurer or an Assistant Treasurer and
may be sealed with the corporate seal. The signatures of any
such officers may be either manual or facsimile signatures and
the corporate seal may be either facsimile or any other form of
seal. In case any such officer who has signed manually or by
facsimile any such certificate ceases to be such officer before
the certificate is issued, it nevertheless may be issued by the
corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
No certificate representing shares of stock shall be
issued for any share of stock until such share is fully paid,
except as otherwise authorized in Section 2-207 of the General
Corporation Law.
The corporation may issue a new certificate of stock
in place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed, and the Board of Directors
may require, in its discretion, the owner of any such
certificate or his legal representative to give bond, with
sufficient surety, to the corporation to indemnify it against
any loss or claim that may arise by reason of the issuance of a
new certificate.
2. SHARE TRANSFERS. Upon compliance with provisions
restricting the transferability of shares of stock, if any,
transfers of shares of stock of the corporation shall be made
only on the stock transfer books of the corporation by the
record holder thereof or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of
the corporation or with a transfer agent or a registrar, if any,
and on surrender of the certificate or certificates for such
shares of stock properly endorsed and the payment of all taxes
due thereon.
3. RECORD DATE FOR STOCKHOLDERS. The Board of
Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to
vote at, any meeting of stockholders, or stockholders entitled
to receive payment of any dividend or the allotment of any
rights or in order to make a determination of stockholders for
any other proper purpose. Such date, in any case, shall be not
more than 90 days, and in case of a meeting of stockholders not
less than 10 days, prior to the date on which the meeting or
particular action requiring such determination of stockholders
is to be held or taken. In lieu of fixing a record date, the
Board of Directors may provide that the stock transfer books
shall be closed for a stated period but not to exceed 20 days.
If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of, or to vote at, a
meeting of stockholders, such books shall be closed for at least
10 days immediately pre-ceding such meeting. If no record date
is fixed and the stock transfer books are not closed for the
determination of stock-holders: (1) The record date for the
determination of stock-holders entitled to notice of, or to vote
at, a meeting of stock-holders shall be at the close of business
on the day on which the notice of meeting is mailed or the day
30 days before the meeting, whichever is the closer date to the
meeting; and (2) The record date for the determination of
stockholders entitled to receive payment of a dividend or an
allotment of any rights shall be at the close of business on the
day on which the resolution of the Board of Directors declaring
the dividend or allotment of rights is adopted, provided that
the payment or allotment date shall not be more than 60 days
after the date on which the resolution is adopted.
4. MEANING OF CERTAIN TERMS. As used herein in
respect of the right to notice of a meeting of stockholders or a
waiver thereof or to participate or vote thereat or to consent
or dissent in writing in lieu of a meeting, as the case may be,
the term "share of stock" or "shares of stock" or "stockholder"
or "stock-holders" refers to an outstanding share or shares of
stock and to a holder or holders of record of outstanding shares
of stock when the corporation is authorized to issue only one
class of shares of stock and said reference also is intended to
include any outstanding share or shares of stock and any holder
or holders of record of outstanding shares of stock of any class
or series upon which or upon whom the Charter confers such
rights where there are two or more classes or series of shares
or upon which or upon whom the General Corporation Law confers
such rights notwithstanding that the Charter may provide for
more than one class or series of shares of stock, one or more of
which are limited or denied such rights thereunder.
5. STOCKHOLDER MEETINGS.
- ANNUAL MEETINGS. If a meeting of the stockholders
of the corporation is required by the Investment Company Act of
1940, as amended, to elect the directors, then there shall be
submitted to the stockholders at such meeting the question of
the election of directors, and a meeting called for that purpose
shall be designated the annual meeting of stockholders for that
year. In other years in which no action by stockholders is
required for the aforesaid election of directors, no annual
meeting need be held.
- SPECIAL MEETINGS. Special stockholder meetings for
any purpose may be called by the Board of Directors or the
President and shall be called by the Secretary for the purpose
of removing a Director whenever the holders of shares entitled
to at least ten percent of all the votes entitled to be cast at
such meeting shall make a duly authorized request that such
meeting be called.
The Secretary shall call a special meeting of
stockholders for all other purposes whenever the holders of
shares entitled to at least twenty-five percent of all the votes
entitled to be cast at such meeting shall make a duly authorized
request that such meeting be called. Such request shall state
the purpose of such meeting and the matters proposed to be acted
on thereat, and no other business shall be transacted at any
such special meeting. The Secretary shall inform such
stockholders of the reasonably estimated costs of preparing and
mailing the notice of the meeting, and upon payment to the
corporation of such costs, the Secretary shall give notice in
the manner provided for below. Notwithstanding the foregoing,
unless requested by stockholders entitled to cast a majority of
the votes entitled to be cast at the meeting, a special meeting
of the stockholders need not be called at the request of
stockholders to consider any matter that is substantially the
same as a matter voted on at any special meeting of the
stockholders held during the preceding twelve (12)
months.
- PLACE AND TIME. Stockholder meetings shall be held
at such place, either within the State of Maryland or at such
other place within the United States, and at such date or dates
as the directors from time to time may fix.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE.
Written or printed notice of all meetings shall be given by the
Secretary and shall state the time and place of the meeting.
The notice of a meeting shall state in all instances the purpose
or purposes for which the meeting is called. Written or printed
notice of any meeting shall be given to each stockholder either
by mail or by presenting it to him personally or by leaving it
at his residence or usual place of business not less than ten
days and not more than ninety days before the date of the
meeting, unless any provisions of the General Corporation Law
shall prescribe a different elapsed period of time, to each
stockholder at his address appearing on the books of the
corporation or the address supplied by him for the purpose of
notice. If mailed, notice shall be deemed to be given when
deposited in the United States mail addressed to the stockholder
at his post office address as it appears on the records of the
corporation with postage thereon prepaid. Whenever any notice
of the time, place or purpose of any meeting of stockholders is
required to be given under the provisions of these by-laws or of
the General Corporation Law, a waiver thereof in writing, signed
by the stockholder and filed with the records of the meeting,
whether before or after the holding thereof, or actual
attendance or representation at the meeting shall be deemed
equivalent to the giving of such notice to such stockholder.
The foregoing requirements of notice also shall apply, whenever
the corporation shall have any class of stock which is not
entitled to vote, to holders of stock who are not entitled to
vote at the meeting, but who are entitled to notice thereof and
to dissent from any action taken thereat.
- STATEMENT OF AFFAIRS. The President of the
corporation or, if the Board of Directors shall determine
otherwise, some other executive officer thereof, shall prepare
or cause to be prepared annually a full and correct statement of
the affairs of the corporation, including a balance sheet and a
financial statement of operations for the preceding fiscal year,
which shall be filed at the principal office of the corporation
in the State of Maryland.
- CONDUCT OF MEETING. Meetings of the stockholders
shall be presided over by one of the following officers in the
order of seniority and if present and acting: the President,
the Chairman of the Board, a Vice President or, if none of the
foregoing is in office and present and acting, by a chairman to
be chosen by the stockholders. The Secretary of the corporation
or, in his absence, an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the chairman of the meeting shall
appoint a secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may
authorize another person or persons to act for him by proxy in
all matters in which a stockholder is entitled to participate,
whether for the purposes of determining his presence at a
meeting, or whether by waiving notice of any meeting, voting or
participating at a meeting, expressing consent or dissent
without a meeting or otherwise. Every proxy shall be executed
in writing by the stock-holder or by his duly authorized
attorney-in-fact and filed with the Secretary of the
corporation. No unrevoked proxy shall be valid after eleven
months from the date of its execution, unless a
longer time is expressly provided therein.
- INSPECTORS OF ELECTION. The directors, in advance
of any meeting, may, but need not, appoint one or more
inspectors to act at the meeting or any adjournment thereof. If
an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an
inspector fails to appear or act, the vacancy may be filled by
appointment made by the directors in advance of the meeting or
at the meeting by the person presiding thereat. Each inspector,
if any, before entering upon the discharge of his duties, shall
take and sign an oath to execute faithfully the duties of
inspector at such meeting with strict impartiality and according
to the best of his ability. The inspectors, if any, shall
determine the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence of
a quorum and the validity and effect of proxies, and shall
receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to
vote, count and tabulate all votes, ballots or consents,
determine the result and do such acts as are proper to conduct
the election or vote with fairness to all stockholders. On
request of the person presiding at the meeting or any
stockholder, the inspector or inspectors, if any, shall make a
report in writing of any challenge, question or matter
determined by him or them and execute a certificate of any fact
found by him or them.
- VOTING. Each share of stock shall entitle the
holder thereof to one vote, except in the election of directors,
at which each said vote may be cast for as many persons as there
are direc-tors to be elected. Except for election of directors,
a majority of the votes cast at a meeting of stockholders, duly
called and at which a quorum is present, shall be sufficient to
take or authorize action upon any matter which may come before a
meeting, unless more than a majority of votes cast is required
by the corporation's Articles of Incorporation. A plurality of
all the votes cast at a meeting at which a quorum is present
shall be sufficient to elect a director.
6. INFORMAL ACTION. Any action required or permitted
to be taken at a meeting of stockholders may be taken without a
meeting if a consent in writing, setting forth such action, is
signed by all the stockholders entitled to vote on the subject
matter thereof and any other stockholders entitled to notice of
a meeting of stockholders (but not to vote thereat) have waived
in writing any rights which they may have to dissent from such
action and such consent and waiver are filed with the records of
the corporation.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and
affairs of the corporation shall be managed under the direction
of a Board of Directors. The use of the phrase "entire board"
herein refers to the total number of directors which the
corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be
a natural person of full age. A director need not be a
stockholder, a citizen of the United States or a resident of the
State of Maryland. The initial Board of Directors shall consist
of three persons. Thereafter, the number of directors
constituting the entire board shall never be less than three or
the number of stockholders, whichever is less. At any regular
meeting or at any special meeting called for that purpose, a
majority of the entire Board of Directors may increase or
decrease the number of direc-tors, provided that the number
thereof shall never be less than three or the number of
stockholders, whichever is less, nor more than eleven and
further provided that the tenure of office of a director shall
not be affected by any decrease in the number of directors.
3. ELECTION AND TERM. The first Board of Directors
shall consist of the directors named in the Articles of
Incorporation and shall hold office until the first meeting of
stockholders or until their successors have been elected and
qualified. Thereafter, directors who are elected at a meeting
of stockholders, and directors who are elected in the interim to
fill vacancies and newly created directorships, shall hold
office until their successors have been elected and qualified.
Newly created directorships and any vacancies in the Board of
Directors, other than vacancies resulting from the removal of
directors by the stockholders, may be filled by the Board of
Directors, subject to the provisions of the Investment Company
Act of 1940. Newly created directorships filled by the Board of
Directors shall be by action of a majority of the entire Board
of Directors. All other vacancies to be filled by the Board of
Directors may be filled by a majority of the remaining members
of the Board of Directors, although such majority is less than a
quorum thereof.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the
Board shall fix, except that the first meeting of a newly
elected Board shall be held as soon after its election as the
directors conveniently may assemble.
- PLACE. Meetings shall be held at such place within
or without the State of Maryland as shall be fixed by the Board.
- CALL. No call shall be required for regular
meetings for which the time and place have been fixed. Special
meetings may be called by or at the direction of the President
or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Whenever
any notice of the time, place or purpose of any meeting of
directors or any committee thereof is required to be given under
the provisions of the General Corporation Law or of these by-
laws, a waiver thereof in writing, signed by the director or
committee member entitled to such notice and filed with the
records of the meeting, whether before or after the holding
thereof, or actual attendance at the meeting shall be deemed
equivalent to the giving of such notice to such director or such
committee member.
- QUORUM AND ACTION. A majority of the entire Board
of Directors shall constitute a quorum except when a vacancy or
vacancies prevents such majority, whereupon a majority of the
directors in office shall constitute a quorum, provided such
majority shall constitute at least one-third of the entire Board
and, in no event, less than two directors. A majority of the
directors present, whether or not a quorum is present, may
adjourn a meeting to another time and place. Except as herein
otherwise provided and, except as in the General Corporation Law
otherwise provided, the action of a majority of the directors
present at a meeting at which a quorum is present shall be the
action of the Board of Directors.
- CHAIRMAN OF THE MEETING. The Chairman of the
Board, if any and if present and acting, or the President or any
other director chosen by the Board, shall preside at all
meetings.
5. REMOVAL OF DIRECTORS. Any or all of the directors
may be removed for cause or without cause by the stockholders,
who may elect a successor or successors to fill any resulting
vacancy or vacancies for the unexpired term of the removed
director or directors.
6. COMMITTEES. The Board of Directors may appoint
from among its members an Executive Committee and other
committees composed of two or more directors and may delegate to
such committee or committees, in the intervals between meetings
of the Board of Directors, any or all of the powers of the Board
of Directors in the management of the business and affairs of
the corporation, except the power to amend the by-laws, to
approve any consolidation, merger, share exchange or transfer of
assets, to declare dividends, to issue stock or to recommend to
stockholders any action requiring the stockholders' approval.
In the absence of any member of any such committee, the members
thereof present at any meeting, whether or not they constitute a
quorum, may appoint a member of the Board of Directors to act in
the place of such absent member.
7. INFORMAL ACTION. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if a written
consent to such action is signed by all members of the Board of
Directors or any such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of
the Board or any such committee.
Members of the Board of Directors or any committee
designated thereby may participate in a meeting of such Board or
committee by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in
person at a meeting.
ARTICLE III
OFFICERS
The corporation may have a Chairman of the Board and
shall have a President, a Secretary and a Treasurer, who shall
be elected by the Board of Directors, and may have such other
officers, assistant officers and agents as the Board of
Directors shall authorize from time to time. Any two or more
offices, except those of President and Vice President, may be
held by the same person, but no person shall execute,
acknowledge or verify any instrument in more than one capacity,
if such instrument is required by law to be executed,
acknowledged or verified by two or more officers.
Any officer or agent may be removed by the Board of
Directors whenever, in its judgment, the best interests of the
corporation will be served thereby.
ARTICLE IV
PRINCIPAL OFFICE - RESIDENT AGENT - STOCK LEDGER
The address of the principal office of the corporation
in the State of Maryland prescribed by the General Corporation
Law is 32 South Street, c/o The Corporation Trust Incorporated,
Baltimore, Maryland 21202. The name and address of the resident
agent in the State of Maryland prescribed by the General
Corporation Law are: The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202.
The corporation shall maintain, at its principal
office in the State of Maryland prescribed by the General
Corporation Law or at the business office or an agency of the
corporation, an original or duplicate stock ledger containing
the names and addresses of all stockholders and the number of
shares of each class held by each stockholder. Such stock
ledger may be in written form or any other form capable of being
converted into written form within a reasonable time for visual
inspection.
The corporation shall keep at said principal office in
the State of Maryland the original or a certified copy of the
by-laws, including all amendments thereto, and shall duly file
thereat the annual statement of affairs of the corporation
prescribed by Section 2-314 of the General Corporation Law.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the
name of the corporation and shall be in such form and contain
such other words and/or figures as the Board of Directors shall
determine or the law require.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and
shall be subject to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
The power to make, alter, amend and repeal the by-laws
is vested in the Board of Directors of the corporation.
ARTICLE VIII
INDEMNIFICATION
Notwithstanding any provision in the General
Corporation
Law or the corporation's Articles of Incorporation:
In the event that a claim for
indemnification is asserted by a director,
officer or controlling person of the
corporation in connection with the registered
securities of the corporation, the corporation
will not make such indemnification unless
(i) the corporation has submitted, before a
court or other body, the question of whether
the person to be indemnified was liable by
reason of wilful misfeasance, bad faith, gross
negligence, or reckless disregard of duties,
and has obtained a final decision on the
merits that such person was not liable by
reason of such conduct or (ii) in the absence
of such decision, the corporation shall have
obtained a reasonable determination, based
upon a review of the facts, that such person
was not liable by virtue of such conduct, by
(a) the vote of a majority of directors who
are neither interested persons as such term is
defined in the Investment Company Act of 1940,
nor parties to the proceeding or (b) an
independent legal counsel in a written
opinion.
The corporation will not advance
attorneys' fees or other expenses incurred by
the person to be indemnified unless the
corporation shall have (i) received an
undertaking by or on behalf of such person to
repay the advance unless it is ultimately
determined that such person is entitled to
indemnification and one of the following
conditions shall have occurred: (x) such
person shall provide security for his
undertaking, (y) the corporation shall be
insured against losses arising by reason of
any lawful advances or (z) a majority of the
disinterested, non-party directors of the
corporation, or an independent legal counsel
in a written opinion, shall have determined
that based on a review of readily available
facts there is reason to believe that such
person ultimately will be found entitled to
indemnification.
As amended, August 3, 1989
AMENDED AND RESTATED CUSTODY AGREEMENT
Amended and Restated Custody Agreement made as of
August 18, 1989 between DREYFUS TAX EXEMPT BOND FUND, INC., a
corporation organized and existing under the laws of the State
of Maryland, having its principal office and place of business
at 666 Old Country Road, Garden City, New York 11530
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New
York corporation authorized to do a banking business, having its
principal office and place of business at 48 Wall Street, New
York, New York 10015 (hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter
set forth the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have
the following meanings:
1. "Authorized Person" shall be deemed to include the
Treasurer, the Controller or any other person, whether or not
any such person is an Officer or employee of the Fund, duly
authorized by the Directors of the Fund to give Oral
Instructions and Written Instructions on behalf of the Fund and
listed in the Certificate annexed hereto as Appendix A or such
other Certificate as may be received by the Custodian from time
to time.
2. "Available Balance" shall mean for any given day
during a calendar year the aggregate amount of Federal Funds
held in the Fund's custody account(s) at The Bank of New York,
or its successors, as of the close of such day or, if such day
is not a business day, the close of the preceding business day.
3. "Bankruptcy" shall mean with respect to a party
such party's making a general assignment, arrangement or
composition with or for the benefit of its creditors, or
instituting or having instituted against it a proceeding seeking
a judgment of insolvency or bankruptcy or the entry of an order
for relief under the Federal bankruptcy law or any other relief
under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or if a petition is presented for
the winding up or liquidation of the party or a resolution is
passed for its winding up or liquidation, or it seeks, or
becomes subject to, the appointment of an administrator,
receiver, trustee, custodian or other similar official for it or
for all or substantially all of its assets or its taking any
action in furtherance of, or indicating its consent to approval
of, or acquiescence in, any of the foregoing.
4. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and Federal
agency securities, its successor or successors and its nominee
or nominees.
5. "Call Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts and Futures Contract Options entitling the
holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the
specified underlying Securities.
6. "Certificate" shall mean any notice, instruction,
or other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is actually
received by the Custodian and signed on behalf of the Fund by
any two Officers of the Fund.
7. "Clearing Member" shall mean a registered broker-
dealer which is a clearing member under the rules of O.C.C. and
a member of a national securities exchange qualified to act as a
custodian for an investment company, or any broker-dealer
reasonably believed by the Custodian to be such a clearing
member.
8. "Collateral Account" shall mean a segregated
account so denominated and pledged to the Custodian as security
for, and in consideration of, the Custodian's issuance of (a)
any Put Option guarantee letter or similar document described in
paragraph 8 of Article V herein, or (b) any receipt described in
Article V or VIII herein.
9. "Consumer Price Index" shall mean the U.S.
Consumer Price Index, all items and all urban consumers, U.S.
city average 1982-84 equals 100, as first published without
seasonal adjustment by the Bureau of Labor Statistics, the
Department of Labor, without regard to subsequent revisions or
corrections by such Bureau.
10. "Covered Call Option" shall mean an exchange
traded option entitling the holder, upon timely exercise and
payment of the exercise price, as specified therein, to purchase
from the writer thereof the specified Securities (excluding
Futures Contracts) which are owned by the writer thereof and
subject to appropriate restrictions.
11. "Depository" shall mean The Depository Trust
Company ("DTC"), a clearing agency registered with the
Securities and Exchange Commission, its successor or successors
and its nominee or nominees, provided the Custodian has received
a certified copy of a resolution of the Fund's Directors
specifically approving deposits in DTC. The term "Depository"
shall further mean and include any other person authorized to
act as a depository under the Investment Company Act of 1940,
its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of
the Fund's Directors specifically approving deposits therein by
the Custodian.
12. "Earnings Credit" shall mean for any given day
during a calendar year the product of (a) the Federal Funds Rate
for such date minus .25%, and (b) 82% of the Available Balance.
13. "Federal Funds" shall mean immediately available
same day funds.
14. "Federal Funds Rate" shall mean, for any day, the
Federal Funds (Effective) interest rate so denominated as
published in Federal Reserve Statistical Release H.15 (519) and
applicable to such day and each succeeding day which is not a
business day.
15. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities, including,
without limitation, U.S. Treasury Bills, U.S. Treasury Notes,
U.S. Treasury Bonds, domestic bank certificates of deposit, and
Eurodollar certificates of deposit, during a specified month at
an agreed upon price.
16. "Futures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contracts.
17. "Futures Contract Option" shall mean an option
with respect to a Futures Contract.
18. "Margin Account" shall mean a segregated account
in the name of a broker, dealer, futures commission merchant or
Clearing Member, or in the name of the Fund for the benefit of a
broker, dealer, futures commission merchant or Clearing Member,
or otherwise, in accordance with an agreement between the Fund,
the Custodian and a broker, dealer, futures commission merchant
or Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities
and/or money of the Fund shall be deposited and withdrawn from
time to time in connection with such transactions as the Fund
may from time to time determine. Securities held in the Book-
Entry System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry on its books and
records.
19. "Merger" shall mean (a) with respect to the Fund,
the consolidation or amalgamation with, merger into, or transfer
of all or substantially all of its assets to, another entity,
where the Fund is not the surviving entity, and (b) with respect
to the Custodian, any consolidation or amalgamation with, merger
into, or transfer of all or substantially all of its assets to,
another entity, except for any such consolidation, amalgamation,
merger or transfer of assets between the Custodian and The Bank
of New York Company, Inc. or any subsidiary thereof, or the
Irving Bank Corporation or any subsidiary thereof, provided that
the surviving entity agrees to be bound by the terms of this
Agreement.
20. "Money Market Security" shall be deemed to
include, without limitation, debt obligations issued or
guaranteed as to principal and interest by the government of the
United States or agencies or instrumentalities thereof,
commercial paper, certificates of deposit and bankers'
acceptances, repurchase and reverse repurchase agreements with
respect to the same and bank time deposits, where the purchase
and sale of such securities normally requires settlement in
Federal funds on the same date as such purchase or sale.
21. "O.C.C." shall mean Options Clearing Corporation,
a clearing agency registered under Section 17A of the Securities
Exchange Act of 1934, its successor or successors, and its
nominee or nominees.
22. "Officers" shall be deemed to include the
President, any Vice President, the Secretary, the Treasurer, the
Controller, any Assistant Secretary, any Assistant Treasurer or
any other person or persons duly authorized by the Directors of
the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix B or such other
Certificate as may be received by the Custodian from time to
time.
23. "Option" shall mean a Call Option, Covered Call
Option, Stock Index Option and/or a Put Option.
24. "Oral Instructions" shall mean verbal
instructions actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person.
25. "Put Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts, and Futures Contract Options entitling the
holder, upon timely exercise and tender of the specified
underlying Securities, to sell such Securities to the writer
thereof for the exercise price.
26. "Reverse Repurchase Agreement" shall mean an
agreement pursuant to which the Fund sells Securities and agrees
to repurchase such Securities at a described or specified date
and price.
27. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Options,
Stock Index Options, Stock Index Futures Contracts, Stock Index
Futures Contract Options, Financial Futures Contracts, Financial
Futures Contract Options, Reverse Repurchase Agreements, common
stock and other instruments or rights having characteristics
similar to common stocks, preferred stocks, debt obligations
issued by state or municipal governments and by public
authorities (including, without limitation, general obligation
bonds, revenue bonds and industrial bonds and industrial
development bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase, sell or
subscribe for the same, or evidencing or representing any other
rights or interest therein, or any property or assets.
28. "Segregated Security Account" shall mean an
account maintained under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the
custody account in which certain Securities and/or other assets
of the Fund shall be deposited and withdrawn from time to time
in accordance with Certificates received by the Custodian in
connection with such transactions as the Fund may from time to
time determine.
29. "Shares" shall mean the shares of Common Stock of
the Fund, each of which, in the case of a Fund having Series, is
allocated to a particular Series.
30. "Stock Index Futures Contract" shall mean a
bilateral agreement pursuant to which the parties agree to take
or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the value of a
particular stock index at the close of the last business day of
the contract and the price at which the futures contract is
originally struck.
31. "Stock Index Option" shall mean an exchange
traded option entitling the holder, upon timely exercise, to
receive an amount of cash determined by reference to the
difference between the exercise price and the value of the index
on the date of exercise.
32. "Written Instructions" shall mean written
communications actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person by telex or any other such
system whereby the receiver of such communications is able to
verify by codes or otherwise with a reasonable degree of
certainty the authenticity of the sender of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the
Custodian as custodian of all the Securities and moneys at any
time owned by the Fund during the period of this Agreement,
except that (a) if the Custodian fails to provide for the
custody of any of the Fund's Securities and moneys located or to
be located outside the United States in a manner satisfactory to
the Fund, the Fund shall be permitted to arrange for the custody
of such Securities and moneys located or to be located outside
the United States other than through the Custodian at rates to
be negotiated and borne by the Fund and (b) if the Custodian
fails to continue any existing sub-custodial or similar
arrangements on substantially the same terms as exist on the
date of this Agreement, the Fund shall be permitted to arrange
for such or similar services other than through the Custodian at
rates to be negotiated and borne by the Fund. The Custodian
shall not charge the Fund for any such terminated services after
the date of such termination.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of
this Article and in Article VIII, the Fund will deliver or cause
to be delivered to the Custodian all Securities and all moneys
owned by it, including cash received for the issuance of its
shares, at any time during the period of this Agreement. The
Custodian will not be responsible for such Securities and such
moneys until actually received by it. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where
such credits have been previously made and moneys are not
finally collected. The Fund shall deliver to the Custodian a
certified resolution of the Directors of the Fund approving,
authorizing and instructing the Custodian on a continuous and
on-going basis to deposit in the Book-Entry System all
Securities eligible for deposit therein and to utilize the Book-
Entry System to the extent possible in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of
Securities collateral. Prior to a deposit of Securities of the
Fund in the Depository the Fund shall deliver to the Custodian a
certified resolution of the Directors of the Fund approving,
authorizing and instructing the Custodian on a continuous and
ongoing basis until instructed to the contrary by a Certificate
actually received by the Custodian to deposit in the Depository
all Securities eligible for deposit therein and to utilize the
Depository to the extent possible in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of
Securities collateral. Securities and moneys of the Fund
deposited in either the Book-Entry System or the Depository will
be represented in accounts which include only assets held by the
Custodian for customers, including, but not limited to, accounts
in which the Custodian acts in a fiduciary or representative
capacity. Prior to the Custodian's accepting, utilizing and
acting with respect to Clearing Member confirmations for Options
and transactions in Options as provided in this Agreement, the
Custodian shall have received a certified resolution of the
Fund's Board of Directors approving, authorizing and instructing
the Custodian on a continuous and on-going basis, until
instructed to the contrary by a Certificate actually received by
the Custodian, to accept, utilize and act in accordance with
such confirmations as provided in this Agreement.
2. The Custodian shall credit to a separate account
in the name of the Fund all moneys received by it for the
account of the Fund, and shall disburse the same only:
(a) In payment for Securities purchased, as provided
in Article IV hereof;
(b) In payment of dividends or distributions, as
provided in Article XI hereof;
(c) In payment of original issue or other taxes, as
provided in Article XII hereof;
(d) In payment for Shares redeemed by it, as provided
in Article XII hereof;
(e) Pursuant to Certificates setting forth the name
and address of the person to whom the payment is to be made, and
the purpose for which payment is to be made; or
(f) In payment of the fees and in reimbursement of
the expenses and liabilities of the Custodian, as provided in
Article XV hereof.
3. Promptly after the close of business on each day,
the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of the Fund
during said day. Where Securities are transferred to the
account of the Fund, the Custodian shall also by book-entry or
otherwise identify as belonging to the Fund a quantity of
Securities in a fungible bulk of Securities registered in the
name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the
Custodian shall furnish the Fund with a detailed statement of
the Securities and moneys held for the Fund under this
Agreement.
4. Except as otherwise provided in paragraph 7 of
this Article and in Article VIII, all Securities held for the
Fund, which are issued or issuable only in bearer form, except
such Securities as are held in the Book-Entry System, shall be
held by the Custodian in that form; all other Securities held
for the Fund may be registered in the name of the Fund, in the
name of any duly appointed registered nominee of the Custodian
as the Custodian may from time to time determine, or in the name
of the Book-Entry System or the Depository or their successor or
successors, or their nominee or nominees. The Fund agrees to
furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee or in the name of
the Book-Entry System or the Depository, any Securities which it
may hold for the account of the Fund and which may from time to
time be registered in the name of the Fund. The Custodian shall
hold all such Securities which are not held in the Book-Entry
System or in the Depository in a separate account in the name of
the Fund physically segregated at all times from those of any
other person or persons.
5. Except as otherwise provided in this Agreement and
unless otherwise instructed to the contrary by a Certificate,
the Custodian by itself, or through the use of the Book-Entry
System or the Depository with respect to Securities therein
deposited, shall with respect to all Securities held for the
Fund in accordance with this Agreement:
(a) Collect all income due or payable and, in any
event, if the Custodian receives a written notice from the Fund
specifying that an amount of income should have been received by
the Custodian within the last 90 days, the Custodian will
provide a conditional payment of income within 60 days from the
date the Custodian received such notice, unless the Custodian
reasonably concludes that such income was not due or payable to
the Fund, provided that the Custodian may reverse any such
conditional payment upon its reasonably concluding that all or
any portion of such income was not due or payable, and provided
further that the Custodian shall not be liable for failing to
collect on a timely basis the full amount of income due or
payable in respect of a "floating rate instrument" or "variable
rate instrument" (as such terms are defined under Rule 2a-7
under the Investment Company Act of 1940, as amended) if it has
acted in good faith, without negligence or willful misconduct.
(b) Present for payment and collect the amount
payable upon such Securities which are called, but only if
either (i) the Custodian receives a written notice of such call,
or (ii) notice of such call appears in one or more of the
publications listed in Appendix C annexed hereto, which may be
amended at any time by the Custodian upon five business days'
prior notification to the Fund;
(c) Present for payment and collect the amount
payable upon all Securities which may mature;
(d) Surrender Securities in temporary form for
definitive Securities;
(e) Execute, as Custodian, any necessary declarations
or certificates of ownership under the Federal Income Tax Laws
or the laws or regulations of any other taxing authority now or
hereafter in effect; and
(f) Hold directly, or through the Book-Entry System
or the Depository with respect to Securities therein deposited,
for the account of the Fund all rights and similar securities
issued with respect to any Securities held by the Custodian
hereunder.
6. Upon receipt of a Certificate and not otherwise,
the Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
(a) Execute and deliver to such persons as may be
designated in such Certificate proxies, consents,
authorizations, and any other instruments whereby the authority
of the Fund as owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund in
exchange for other Securities or cash issued or paid in
connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
(c) Deliver any Securities held for the Fund to any
protective committee, reorganization committee or other person
in connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of
the Fund and take such other steps as shall be stated in said
order to be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) Present for payment and collect the amount
payable upon Securities not described in preceding paragraph
5(b) of this Article which may be called as specified in the
Certificate.
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain possession
of any instrument or certificate representing any Futures
Contract, Option or Futures Contract Option until after it shall
have determined, or shall have received a Certificate from the
Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the
availability of any such instrument or certificate. Prior to
such availability, the Custodian shall comply with Section 17(f)
of the Investment Company Act of 1940, as amended, in connection
with the purchase, sale, settlement, closing out or writing of
Futures Contracts, Options or Futures Contract Options by making
payments or deliveries specified in Certificates received by the
Custodian in connection with any such purchase, sale, writing,
settlement or closing out upon its receipt from a broker, dealer
or futures commission merchant of a statement or confirmation
reasonably believed by the Custodian to be in the form
customarily used by brokers, dealers, or futures commission
merchants with respect to such Futures Contracts, Options or
Futures Contract Options, as the case may be, confirming that
such Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the
name of the Custodian (or any nominee of the Custodian) as
custodian for the Fund, provided, however, that payments to or
deliveries from the Margin Account shall be made in accordance
with the terms and conditions of the Margin Account Agreement.
Whenever any such instruments or certificates are available, the
Custodian shall, notwithstanding any provision in this Agreement
to the contrary, make payment for any Futures Contract, Option
or Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the
Custodian of such instrument or such certificate, and deliver
any Futures Contract, Option or Futures Contract Option for
which such instruments or such certificates are available only
against receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be
held by the Custodian hereunder in accordance with, and subject
to, the provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN OPTIONS,
FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS AND REVERSE
REPURCHASE AGREEMENTS
1. Promptly after each purchase of Securities by the
Fund, other than a purchase of any Option, Futures Contract,
Futures Contract Option or Reverse Repurchase Agreement, the
Fund shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each purchase of Money
Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such purchase:
(a) the name of the issuer and the title of the Securities; (b)
the number of shares or the principal amount purchased and
accrued interest, if any; (c) the date of purchase and
settlement; (d) the purchase price per unit; (e) the total
amount payable upon such purchase; (f) the name of the person
from whom or the broker through whom the purchase was made, and
the name of the clearing broker, if any; and (g) the name of the
broker to which payment is to be made. The Custodian shall,
upon receipt of Securities purchased by or for the Fund, pay out
of the moneys held for the account of the Fund the total amount
payable to the person from whom, or the broker through whom, the
purchase was made, provided that the same conforms to the total
amount payable as set forth in such Certificate, Oral
Instructions or Written Instructions.
2. Promptly after each sale of Securities by the
Fund, other than a sale of any Option, Futures Contract, Futures
Contract Option or Reverse Repurchase Agreement, the Fund shall
deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate,
and (ii) with respect to each sale of Money Market Securities, a
Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such sale: (a) the name of the
issuer and the title of the Security; (b) the number of shares
or principal amount sold, and accrued interest, if any; (c) the
date of sale; (d) the sale price per unit; (e) the total amount
payable to the Fund upon such sale; (f) the name of the broker
through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (g) the name of the
broker to whom the Securities are to be delivered. The
Custodian shall deliver the Securities upon receipt of the total
amount payable to the Fund upon such sale, provided that the
same conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions. Subject
to the foregoing, the Custodian may accept payment in such form
as shall be satisfactory to it, and may deliver Securities and
arrange for payment in accordance with the customs prevailing
among dealers in Securities.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the
Fund, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each Option purchased: (a) the type
of Option (put or call); (b) the name of the issuer and the
title and number of shares subject to such Option or, in the
case of a Stock Index Option, the stock index to which such
Option relates and the number of Stock Index Options purchased;
(c) the expiration date; (d) the exercise price; (e) the dates
of purchase and settlement; (f) the total amount payable by the
Fund in connection with such purchase; (g) the name of the
Clearing Member through which such Option was purchased; and (h)
the name of the broker to whom payment is to be made. The
Custodian shall pay, upon receipt of a Clearing Member's
statement confirming the purchase of such Option held by such
Clearing Member for the account of the Custodian (or any duly
appointed and registered nominee of the Custodian) as custodian
for the Fund, out of moneys held for the account of the Fund,
the total amount payable upon such purchase to the Clearing
Member through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in such
Certificate.
2. Promptly after the sale of any Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the Custodian a Certificate specifying with respect to each
such sale: (a) the type of Option (put or call); (b) the name
of the issuer and the title and number of shares subject to such
Option or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Stock Index
Options sold; (c) the date of sale; (d) the sale price; (e) the
date of settlement; (f) the total amount payable to the Fund
upon such sale; and (g) the name of the Clearing Member through
which the sale was made. The Custodian shall consent to the
delivery of the Option sold by the Clearing Member which
previously supplied the confirmation described in preceding
paragraph 1 of this Article with respect to such Option against
payment to the Custodian of the total amount payable to the
Fund, provided that the same conforms to the total amount
payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any
Call Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Call Option: (a) the name of
the issuer and the title and number of shares subject to the
Call Option; (b) the expiration date; (c) the date of exercise
and settlement; (d) the exercise price per share; (e) the total
amount to be paid by the Fund upon such exercise; and (f) the
name of the Clearing Member through which such Call Option was
exercised. The Custodian shall, upon receipt of the Securities
underlying the Call Option which was exercised, pay out of the
moneys held for the account of the Fund the total amount payable
to the Clearing Member through whom the Call Option was
exercised, provided that the same conforms to the total amount
payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying
with respect to such Put Option: (a) the name of the issuer and
the title and number of shares subject to the Put Option; (b)
the expiration date; (c) the date of exercise and settlement;
(d) the exercise price per share; (e) the total amount to be
paid to the Fund upon such exercise; and (f) the name of the
Clearing Member through which such Put Option was exercised.
The Custodian shall, upon receipt of the amount payable upon the
exercise of the Put Option, deliver or direct the Depository to
deliver the Securities, provided the same conforms to the amount
payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any
Stock Index Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) the
type of Stock Index Option (put or call); (b) the number of
Options being exercised; (c) the stock index to which such
Option relates; (d) the expiration date; (e) the exercise price;
(f) the total amount to be received by the Fund in connection
with such exercise; and (g) the Clearing Member from which such
payment is to be received.
6. Whenever the Fund writes a Covered Call Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Covered Call Option: (a) the
name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same;
(b) the expiration date; (c) the exercise price; (d) the premium
to be received by the Fund; (e) the date such Covered Call
Option was written; and (f) the name of the Clearing Member
through which the premium is to be received. The Custodian
shall deliver or cause to be delivered, in exchange for receipt
of the premium specified in the Certificate with respect to such
Covered Call Option, such receipts as are required in accordance
with the customs prevailing among Clearing Members dealing in
Covered Call Options and shall impose, or direct the Depository
to impose, upon the underlying Securities specified in the
Certificate such restrictions as may be required by such
receipts. Notwithstanding the foregoing, the Custodian has the
right, upon prior written notification to the Fund, at any time
to refuse to issue any receipts for Securities in the possession
of the Custodian and not deposited with the Depository
underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate instructing the Custodian to deliver, or to direct
the Depository to deliver, the Securities subject to such
Covered Call Option and specifying: (a) the name of the issuer
and the title and number of shares subject to the Covered Call
Option; (b) the Clearing Member to whom the underlying
Securities are to be delivered; and (c) the total amount payable
to the Fund upon such delivery. Upon the return and/or
cancellation of any receipts delivered pursuant to paragraph 6
of this Article, the Custodian shall deliver, or direct the
Depository to deliver, the underlying Securities as specified in
the Certificate for the amount to be received as set forth in
such Certificate.
8. Whenever the Fund writes a Put Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to such Put Option: (a) the name of the issuer and
the title and number of shares for which the Put Option is
written and which underlie the same; (b) the expiration date;
(c) the exercise price; (d) the premium to be received by the
Fund; (e) the date such Put Option is written; (f) the name of
the Clearing Member through which the premium is to be received
and to whom a Put Option guarantee letter is to be delivered;
(g) the amount of cash, and/or the amount and kind of
Securities, if any, to be deposited in the Segregated Security
Account; and (h) the amount of cash and/or the amount and kind
of Securities to be deposited into the Collateral Account. The
Custodian shall, after making the deposits into the Collateral
Account specified in the Certificate, issue a Put Option
guarantee letter substantially in the form utilized by the
Custodian on the date hereof, and deliver the same to the
Clearing Member specified in the Certificate against receipt of
the premium specified in said Certificate. Notwithstanding the
foregoing, the Custodian shall be under no obligation to issue
any Put Option guarantee letter or similar document if it is
unable to make any of the representations contained therein.
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Fund
shall promptly deliver to the Custodian a Certificate
specifying: (a) the name of the issuer and title and number of
shares subject to the Put Option; (b) the Clearing Member from
which the underlying Securities are to be received; (c) the
total amount payable by the Fund upon such delivery; (d) the
amount of cash and/or the amount and kind of Securities to be
withdrawn from the Collateral Account; and (e) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Segregated Security Account. Upon the return
and/or cancellation of any Put Option guarantee letter or
similar document issued by the Custodian in connection with such
Put Option, the Custodian shall pay out of the moneys held for
the account of the Fund the total amount payable to the Clearing
Member specified in the Certificate as set forth in such
Certificate, and shall make the withdrawals specified in such
Certificate.
10. Whenever the Fund writes a Stock Index Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) whether
such Stock Index Option is a put or a call; (b) the number of
Options written; (c) the stock index to which such Option
relates; (d) the expiration date; (e) the exercise price; (f)
the Clearing Member through which such Option was written; (g)
the premium to be received by the Fund; (h) the amount of cash
and/or the amount and kind of Securities, if any, to be
deposited in the Segregated Security Account; (i) the amount of
cash and/or the amount and kind of Securities, if any, to be
deposited in the Collateral Account; and (j) the amount of cash
and/or the amount and kind of Securities, if any, to be
deposited in a Margin Account, and the name in which such
account is to be or has been established. The Custodian shall,
upon receipt of the premium specified in the Certificate, make
the deposits, if any, into the Segregated Security Account
specified in the Certificate, and either (1) deliver such
receipts, if any, which the Custodian has specifically agreed to
issue, which are in accordance with the customs prevailing among
Clearing Members in Stock Index Options and make the deposits
into the Collateral Account specified in the Certificate, or (2)
make the deposits into the Margin Account specified in the
Certificate.
11. Whenever a Stock Index Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Stock Index Option:
(a) such information as may be necessary to identify the Stock
Index Option being exercised; (b) the Clearing Member through
which such Stock Index Option is being exercised; (c) the total
amount payable upon such exercise, and whether such amount is to
be paid by or to the Fund; (d) the amount of cash and/or amount
and kind of Securities, if any, to be withdrawn from the Margin
Account; and (e) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Segregated Security
Account and the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account.
Upon the return and/or cancellation of the receipt, if any,
delivered pursuant to the preceding paragraph of this Article,
the Custodian shall pay to the Clearing Member specified in the
Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical
to a previously written Option described in paragraphs 6, 8 or
10 of this Article in a transaction expressly designated as a
"Closing Purchase Transaction" in order to liquidate its
position as a writer of an Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect
to the Option being purchased: (a) that the transaction is a
Closing Purchase Transaction; (b) the name of the issuer and the
title and number of shares subject to the Option, or, in the
case of a Stock Index Option, the stock index to which such
Option relates and the number of Options held; (c) the exercise
price; (d) the premium to be paid by the Fund; (e) the
expiration date; (f) the type of Option (put or call); (g) the
date of such purchase; (h) the name of the Clearing Member to
which the premium is to be paid; and (i) the amount of cash
and/or the amount and kind of Securities, if any, to be
withdrawn from the Collateral Account, a specified Margin
Account or the Segregated Security Account. Upon the
Custodian's payment of the premium and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8
or 10 of this Article with respect to the Option being
liquidated through the Closing Purchase Transaction, the
Custodian shall remove, or direct the Depository to remove, the
previously imposed restrictions on the Securities underlying the
Call Option.
13. Upon the expiration or exercise of, or
consummation of a Closing Purchase Transaction with respect to,
any Option purchased or written by the Fund and described in
this Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 of
Article III herein, and upon the return and/or cancellation of
any receipts issued by the Custodian, shall make such
withdrawals from the Collateral Account, the Margin Account
and/or the Segregated Security Account as may be specified in a
Certificate received in connection with such expiration,
exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Futures Contract (or with
respect to any number of identical Futures Contract(s)): (a)
the category of Futures Contract (the name of the underlying
stock index or financial instrument); (b) the number of
identical Futures Contracts entered into; (c) the delivery or
settlement date of the Futures Contract(s); (d) the date the
Futures Contract(s) was (were) entered into and the maturity
date; (e) whether the Fund is buying (going long) or selling
(going short) on such Futures Contract(s); (f) the amount of
cash and/or the amount and kind of Securities, if any, to be
deposited in the Segregated Security Account; (g) the name of
the broker, dealer or futures commission merchant through which
the Futures Contract was entered into; and (h) the amount of fee
or commission, if any, to be paid and the name of the broker,
dealer or futures commission merchant to whom such amount is to
be paid. The Custodian shall make the deposits, if any, to the
Margin Account in accordance with the terms and conditions of
the Margin Account Agreement. The Custodian shall make payment
of the fee or commission, if any, specified in the Certificate
and deposit in the Segregated Security Account the amount of
cash and/or the amount and kind of Securities specified in said
Certificate.
2. (a) Any variation margin payment or similar
payment required to be made by the Fund to a broker, dealer or
futures commission merchant with respect to an outstanding
Futures Contract shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment
from a broker, dealer or futures commission merchant to the Fund
with respect to an outstanding Futures Contract shall be
received and dealt with by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement
is made on such Futures Contract, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the Futures Contract;
(b) with respect to a Stock Index Futures Contract, the total
cash settlement amount to be paid or received, and with respect
to a Financial Futures Contract, the Securities and/or amount of
cash to be delivered or received; (c) the broker, dealer or
futures commission merchant to or from which payment or delivery
is to be made or received; and (d) the amount of cash and/or
Securities to be withdrawn from the Segregated Security Account.
The Custodian shall make the payment or delivery specified in
the Certificate and delete such Futures Contract from the
statements delivered to the Fund pursuant to paragraph 3 of
Article III herein.
4. Whenever the Fund shall enter into a Futures
Contract to offset a Futures Contract held by the Custodian
hereunder, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b)
the Futures Contract being offset. The Custodian shall make
payment of the fee or commission, if any, specified in the
Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3 of
Article III herein, and make such withdrawals from the
Segregated Security Account as may be specified in such
Certificate. The withdrawals, if any, to be made from the
Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures
Contract Option by the Fund, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Futures
Contract Option: (a) the type of Futures Contract Option (put
or call); (b) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option purchased; (c) the
expiration date; (d) the exercise price; (e) the dates of
purchase and settlement; (f) the amount of premium to be paid by
the Fund upon such purchase; (g) the name of the broker or
futures commission merchant through which such option was
purchased; and (h) the name of the broker or futures commission
merchant to whom payment is to be made. The Custodian shall pay
the total amount to be paid upon such purchase to the broker or
futures commission merchant through whom the purchase was made,
provided that the same conforms to the amount set forth in such
Certificate.
2. Promptly after the sale of any Futures Contract
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) the type of
Futures Contract Option (put or call); (b) the type of Futures
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (c) the date of sale; (d) the sale price; (e) the date
of settlement; (f) the total amount payable to the Fund upon
such sale; and (g) the name of the broker or futures commission
merchant through which the sale was made. The Custodian shall
consent to the cancellation of the Futures Contract Option being
closed against payment to the Custodian of the total amount
payable to the Fund, provided the same conforms to the total
amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by
the Fund pursuant to paragraph 1 is exercised by the Fund, the
Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the particular Futures Contract Option (put or
call) being exercised; (b) the type of Futures Contract
underlying the Futures Contract Option; (c) the date of
exercise; (d) the name of the broker or futures commission
merchant through which the Futures Contract Option is exercised;
(e) the net total amount, if any, payable by the Fund; (f) the
amount, if any, to be received by the Fund; and (g) the amount
of cash and/or the amount and kind of Securities to be deposited
in the Segregated Security Account. The Custodian shall make
the payments, if any, and the deposits, if any, into the
Segregated Security Account as specified in the Certificate.
The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract
Option, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Futures Contract
Option: (a) the type of Futures Contract Option (put or call);
(b) the type of Futures Contract and such other information as
may be necessary to identify the Futures Contract underlying the
Futures Contract Option; (c) the expiration date; (d) the
exercise price, (e) the premium to be received by the Fund; (f)
the name of the broker or futures commission merchant through
which the premium is to be received; and (g) the amount of cash
and/or the amount and kind of Securities, if any, to be
deposited in the Segregated Security Account. The Custodian
shall, upon receipt of the premium specified in the Certificate,
make the deposits into the Segregated Security Account, if any,
as specified in the Certificate. The deposits, if any, to be
made to the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
5. Whenever a Futures Contract Option written by the
Fund which is a call is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the
particular Futures Contract Option exercised; (b) the type of
Futures Contract underlying the Futures Contract Option; (c) the
name of the broker or futures commission merchant through which
such Futures Contract Option was exercised; (d) the net total
amount, if any, payable to the Fund upon such exercise; (e) the
net total amount, if any, payable by the Fund upon such
exercise; and (f) the amount of cash and/or the amount and kind
of Securities to be deposited in the Segregated Security
Account. The Custodian shall, upon its receipt of the net total
amount payable to the Fund, if any, specified in such
Certificate make the payments, if any, and the deposits, if any,
into the Segregated Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
6. Whenever a Futures Contract Option which is
written by the Fund and which is a Put Option is exercised, the
Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the particular Futures Contract Option
exercised; (b) the type of Futures Contract underlying such
Futures Contract Option; (c) the name of the broker or futures
commission merchant through which such Futures Contract Option
is exercised; (d) the net total amount, if any, payable to the
Fund upon such exercise; (e) the net total amount, if any,
payable by the Fund upon such exercise; and (f) the amount and
kind of Securities and/or cash to be withdrawn from or deposited
in the Segregated Security Account, if any. The Custodian
shall, upon its receipt of the net total amount payable to the
Fund, if any, specified in the Certificate, make the payments,
if any, and the deposits, if any, into the segregated Security
Account as specified in the Certificate. The deposits to and/or
withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
7. Whenever the Fund purchases any Futures Contract
Option identical to a previously written Futures Contract Option
described in this Article in order to liquidate its position as
a writer of such Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to the Futures Contract Option being purchased: (a)
that the transaction is a closing transaction; (b) the type of
Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Contract
Option; (c) the exercise price; (d) the premium to be paid by
the Fund; (e) the expiration date; (f) the name of the broker or
futures commission merchant to which the premium is to be paid;
and (g) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Segregated Security
Account. The Custodian shall effect the withdrawals from the
Segregated Security Account specified in the Certificate. The
withdrawals, if any, to be made from the Margin Account shall be
made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration or exercise of, or
consummation of a closing transaction with respect to, any
Futures Contract Option written or purchased by the Fund and
described in this Article, the Custodian shall (a) delete such
Futures Contract Option from the statements delivered to the
Fund pursuant to paragraph 3 of Article III herein, and (b) make
such withdrawals from, and/or, in the case of an exercise, such
deposits into, the Segregated Security Account as may be
specified in a Certificate. The deposits to and/or withdrawals
from the Margin Account, if any, shall be made by the Custodian
in accordance with the terms and conditions of the Margin
Account Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this Article
shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sale, the Fund shall
deliver to the Custodian a Certificate specifying: (a) the name
of the issuer and the title of the Security; (b) the number of
shares or principal amount sold, and accrued interest or
dividends, if any; (c) the dates of the sale and settlement; (d)
the sale price per unit; (e) the total amount credited to the
Fund upon such sales, if any; (f) the amount of cash and/or the
amount and kind of Securities, if any, which are to be deposited
in a Margin Account and the name in which such Margin Account
has been or is to be established; (g) the amount of cash and/or
the amount and kind of Securities, if any, to be deposited in a
Segregated Security Account; and (h) the name of the broker
through which such short sale was made. The Custodian shall
upon its receipt of a statement from such broker confirming such
sale and that the total amount credited to the Fund upon such
sale, if any, as specified in the Certificate is held by such
broker for the account of the Custodian (or any nominee of the
Custodian) as custodian of the Fund, issue a receipt or make the
deposits into the Margin Account and the Segregated Security
Account specified in the Certificate.
2. In connection with the closing-out of any short
sale, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such closing-out:
(a) the name of the issuer and the title of the Security; (b)
the number of shares or the principal amount, and accrued
interest or dividends, if any, required to effect such closing-
out to be delivered to the broker; (c) the dates of the closing-
out and settlement; (d) the purchase price per unit; (e) the net
total amount payable to the Fund upon such closing-out; (f) the
net total amount payable to the broker upon such closing-out;
(g) the amount of cash and the amount and kind of Securities to
be withdrawn, if any, from the Margin Account; (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Segregated Security Account; and (i) the name
of the broker through which the Fund is effecting such closing
out. The Custodian shall, upon receipt of the net total amount
payable to the Fund upon such closing-out and the return and/or
cancellation of the receipts, if any, issued by the custodian
with respect to the short sale being closed-out, pay out of the
moneys held for the account of the Fund to the broker the net
total amount payable to the broker, and make the withdrawals
from the Margin Account and the Segregated Security Account, as
the same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse
Repurchase Agreement with respect to Securities and money held
by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate, Oral
InstructionS or Written Instructions specifying: (a) the total
amount payable to the Fund in connection with such Reverse
Repurchase Agreement; (b) the broker or dealer through or with
which the Reverse Repurchase Agreement is entered; (c) the
amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (d) the date of such Reverse Repurchase
Agreement; and (e) the amount of cash and/or the amount and kind
of Securities, if any, to be deposited in a Segregated Security
Account in connection with such Reverse Repurchase Agreement.
The Custodian shall, upon receipt of the total amount payable to
the Fund specified in the Certificate, Oral Instructions or
Written Instructions make the delivery to the broker or dealer,
and the deposits, if any, to the Segregated Security Account,
specified in such Certificate, Oral Instructions or Written
Instructions.
2. Upon the termination of a Reverse Repurchase
Agreement described in paragraph 1 of this Article, the Fund
shall promptly deliver a Certificate or, in the event such
Reverse Repurchase Agreement is a Money Market Security, a
Certificate, Oral Instructions or Written Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement
being terminated; (b) the total amount payable by the Fund in
connection with such termination; (c) the amount and kind of
Securities to be received by the Fund in connection with such
termination; (d) the date of termination; (e) the name of the
broker or dealer with or through which the Reverse Repurchase
Agreement is to be terminated; and (f) the amount of cash and/or
the amount and kind of Securities to be withdrawn from the
Segregated Security Account. The Custodian shall, upon receipt
of the amount and kind of Securities to be received by the Fund
specified in the Certificate, Oral Instructions or Written
Instructions, make the payment to the broker or dealer, and the
withdrawals, if any, from the Segregated Security Account,
specified in such Certificate, Oral Instructions or Written
Instructions.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such
deposits to, or withdrawals from, a Segregated Security Account
as specified in a Certificate received by the Custodian. Such
Certificate shall specify the amount of cash and/or the amount
and kind of Securities to be deposited in, or withdrawn from,
the Segregated Security Account. In the event that the Fund
fails to specify in a Certificate the name of the issuer, the
title and the number of shares or the principal amount of any
particular Securities to be deposited by the Custodian into, or
withdrawn from, a Segregated Securities Account, the Custodian
shall be under no obligation to make any such deposit or
withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments
from a Margin Account to the broker, dealer, futures commission
merchant or Clearing Member in whose name, or for whose benefit,
the account was established as specified in the Margin Account
Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by the
Custodian in any Collateral Account described herein. In
accordance with applicable law, the Custodian may enforce its
lien and realize on any such property whenever the Custodian has
made payment or delivery pursuant to any Put Option guarantee
letter or similar document or any receipt issued hereunder by
the Custodian. In the event the Custodian should realize on any
such property net proceeds which are less than the Custodian's
obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed
the Custodian by the Fund within the scope of Article XIII
herein.
5. On each business day, the Custodian shall furnish
the Fund with a statement with respect to each Margin Account in
which money or Securities are held specifying as of the close of
business on the previous business day: (a) the name of the
Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The
Custodian shall make available upon request to any broker,
dealer or futures commission merchant specified in the name of a
Margin Account a copy of the statement furnished the Fund with
respect to such Margin Account.
6. Promptly after the close of business on each
business day in which cash and/or Securities are maintained in a
Collateral Account, the Custodian shall furnish the Fund with a
Statement with respect to such Collateral Account specifying the
amount of cash and/or the amount and kind of Securities held
therein. No later than the close of business next succeeding
the delivery to the Fund of such statement, the Fund shall
furnish to the Custodian a Certificate or Written Instructions
specifying the then market value of the securities described in
such statement. In the event such then market value is
indicated to be less than the Custodian's obligation with
respect to any outstanding Put Option, guarantee letter or
similar document, the Fund shall promptly specify in a
Certificate the additional cash and/or Securities to be
deposited in such Collateral Account to eliminate such
deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of
the resolution of the Directors, certified by the Secretary or
any Assistant Secretary, either (i) setting forth the date of
the declaration of a dividend or distribution, the date of
payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of that date and the
total amount payable to the Dividend Agent of the Fund on the
payment date, or (ii) authorizing the declaration of dividends
and distributions on a daily basis and authorizing the Custodian
to rely on Oral Instructions, Written Instructions or a
Certificate setting forth the date of the declaration of such
dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall
be determined, the amount payable per share to the shareholders
of record as of that date and the total amount payable to the
Dividend Agent on the payment date.
2. Upon the payment date specified in such
resolution, Oral Instructions, Written Instructions or
Certificate, as the case may be, the Custodian shall pay out of
the moneys held for the account of the Fund the total amount
payable to the Dividend Agent of the Fund.
ARTICLE XII
SALE AND REDEMPTION OF SHARES OF COMMON STOCK
1. Whenever the Fund shall sell any of its Shares, it
shall deliver to the Custodian a Certificate duly specifying:
(a) The number of Shares sold, trade date, and price;
and
(b) The amount of money to be received by the
Custodian for the sale of such Shares.
2. Upon receipt of such money from the Transfer
Agent, the Custodian shall credit such money to the account of
the Fund.
3. Upon issuance of any of the Fund's Shares in
accordance with the foregoing provisions of this Article, the
Custodian shall pay, out of the money held for the account of
the Fund, all original issue or other taxes required to be paid
by the Fund, in connection with such issuance upon the receipt
of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund
shall hereafter redeem any of its Shares, it shall furnish to
the Custodian a Certificate specifying:
(a) The number of Shares redeemed; and
(b) The amount to be paid for the Shares redeemed.
5. Upon receipt from the Transfer Agent of an advice
setting forth the number of Shares received by the Transfer
Agent for redemption and that such Shares are valid and in good
form for redemption, the Custodian shall make payment to the
Transfer Agent out of the moneys held for the account of the
Fund of the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the
redemption of any of the Fund's Shares, whenever its Shares are
redeemed pursuant to any check redemption privilege which may
from time to time be offered by the Fund, the Custodian, unless
otherwise instructed by a Certificate, shall, upon receipt of an
advice from the Fund or its agent setting forth that the
redemption is in good form for redemption in accordance with the
check redemption procedure, honor the check presented as part of
such check redemption privilege out of the money held in the
account of the Fund for such purposes.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion
advance funds on behalf of the Fund which results in an
overdraft because the moneys held by the Custodian for the
account of the Fund shall be insufficient to pay the total
amount payable upon a purchase of Securities as set forth in a
Certificate or Oral Instructions issued pursuant to Article IV,
or which results in an overdraft for some other reason, or if
the Fund is for any other reason indebted to the Custodian
(except a borrowing for investment or for temporary or emergency
purposes using Securities as collateral pursuant to a separate
agreement and subject to the provisions of paragraph 2 of this
Article XIII), such overdraft or indebtedness shall be deemed to
be a loan made by the Custodian to the Fund payable on demand
and shall bear interest from the date incurred at a rate per
annum (based on a 360-day year for the actual number of days
involved) equal to the Federal Funds Rate plus 1/2%, such rate
to be adjusted on the effective date of any change in such
Federal Funds Rate but in no event to be less than 6% per annum,
except that any overdraft resulting from an error by the
Custodian shall bear no interest. Any such overdraft or
indebtedness shall be reduced by an amount equal to the total of
all amounts due the Fund which have not been collected by the
Custodian on behalf of the Fund when due because of the failure
of the Custodian to make timely demand or presentment for
payment. In addition, the Fund hereby agrees that the Custodian
shall have a continuing lien and security interest in and to any
property at any time held by it for the benefit of the Fund or
in which the Fund may have an interest which is then in the
Custodian's possession or control or in possession or control of
any third party acting in the Custodian's behalf. The Fund
authorizes the Custodian, in its sole discretion, at any time to
charge any such overdraft or indebtedness together with interest
due thereon against any balance of account standing to the
Fund's credit on the Custodian's books. For purposes of this
Section 1 of Article XIII, "overdraft" shall mean a negative
Available Balance.
2. The Fund will cause to be delivered to the
Custodian by any bank (including, if the borrowing is pursuant
to a separate agreement, the Custodian) from which it borrows
money for investment or for temporary or emergency purposes
using Securities as collateral for such borrowings, a notice or
undertaking in the form currently employed by any such bank
setting forth the amount which such bank will loan to the Fund
against delivery of a stated amount of collateral. The Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to each such borrowing: (a) the name of the bank;
(b) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note,
duly endorsed by the Fund, or other loan agreement; (c) the time
and date, if known, on which the loan is to be entered into; (d)
the date on which the loan becomes due and payable; (e) the
total amount payable to the Fund on the borrowing date; (f) the
market value of Securities to be delivered as collateral for
such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular
Securities; and (g) a statement specifying whether such loan is
for investment purposes or for temporary or emergency purposes
and that such loan is in conformance with the Investment Company
Act of 1940 and the Fund's prospectus. The Custodian shall
deliver on the borrowing date specified in a Certificate the
specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount of the
loan payable, provided that the same conforms to the total
amount of the loan payable, provided that the same conforms to
the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue
of any promissory note or loan agreement. The Custodian shall
deliver such Securities as additional collateral as may be
specified in a Certificate to collateralize further any
transaction described in this paragraph. The Fund shall cause
all Securities released from collateral status to be returned
directly to the Custodian, and the Custodian shall receive from
time to time such return of collateral as may be tendered to it.
In the event that the Fund fails to specify in a Certificate the
name of the issuer, the title and number of shares or the
principal amount of any particular Securities to be delivered as
collateral by the Custodian, the Custodian shall not be under
any obligation to deliver any Securities.
ARTICLE XIV
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its
Articles of Incorporation and as disclosed in its most recent
and currently effective prospectus to lend its portfolio
Securities, within 24 hours after each loan of portfolio
Securities the Fund shall deliver or cause to be delivered to
the Custodian a Certificate specifying with respect to each such
loan: (a) the name of the issuer and the title of the
Securities; (b) the number of shares or the principal amount
loaned; (c) the date of loan and delivery; (d) the total amount
to be delivered to the Custodian against the loan of the
Securities, including the amount of cash collateral and the
premium, if any, separately identified; and (e) the name of the
broker, dealer or financial institution to which the loan was
made. The Custodian shall deliver the Securities thus
designated to the broker, dealer or financial institution to
which the loan was made upon receipt of the total amount
designated as to be delivered against the loan of Securities.
The Custodian may accept payment in connection with a delivery
otherwise than through the Book-Entry System or Depository only
in the form of a certified or bank cashier's check payable to
the order of the Fund or the Custodian drawn on New York
Clearing House funds and may deliver Securities in accordance
with the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of
Securities by the Fund, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect
to each such loan termination and return of Securities: (a) the
name of the issuer and the title of the Securities to be
returned; (b) the number of shares or the principal amount to be
returned; (c) the date of termination; (d) the total amount to
be delivered by the Custodian (including the cash collateral for
such Securities minus any offsetting credits as described in
said Certificate); and (e) the name of the broker, dealer or
financial institution from which the Securities will be
returned. The Custodian shall receive all Securities returned
from the broker, dealer, or financial institution to which such
Securities were loaned and upon receipt thereof shall pay, out
of the moneys held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the
Certificate.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, neither the
Custodian nor its nominee shall be liable for any loss or
damage, including counsel fees, resulting from its action or
omission to act or otherwise, either hereunder or under any
Margin Account Agreement, except for any such loss or damage
arising out of its own negligence or willful misconduct. The
Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Fund or of its
own counsel, at the expense of the Fund, and shall be fully
protected with respect to anything done or omitted by it in good
faith in conformity with such advice or opinion. The Custodian
shall be liable to the Fund for any loss or damage resulting
from the use of the Book-Entry System or any Depository arising
by reason of any negligence, misfeasance or willful misconduct
on the part of the Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing,
the Custodian shall be under no obligation to inquire into, and
shall not be liable for:
(a) The validity of the issue of any Securities
purchased, sold or written by or for the Fund, the legality of
the purchase, sale or writing thereof, or the propriety of the
amount paid or received therefor;
(b) The legality of the issue or sale of any of the
Fund's Shares, or the sufficiency of the amount to be received
therefor;
(c) The legality of the redemption of any of the
Fund's Shares, or the propriety of the amount to be paid
therefor;
(d) The legality of the declaration or payment of any
dividend by the Fund;
(e) The legality of any borrowing by the Fund using
Securities as collateral;
(f) The legality of any loan of portfolio Securities
pursuant to Article XIV of this Agreement, nor shall the
Custodian be under any duty or obligation to see to it that any
cash collateral delivered to it by a broker, dealer or financial
institution or held by it at any time as a result of such loan
of portfolio Securities of the Fund is adequate collateral for
the Fund against any loss it might sustain as a result of such
loan. The Custodian specifically, but not by way of limitation,
shall not be under any duty or obligation periodically to check
or notify the Fund that the amount of such cash collateral held
by it for the Fund is sufficient collateral for the Fund, but
such duty or obligation shall be the sole responsibility of the
Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer or financial
institution to which portfolio Securities of the Fund are lent
pursuant to Article XIV of this Agreement makes payment to it of
any dividends or interest which arc payable to or for the
account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian
shall promptly notify the Fund in the event that such dividends
or interest are not paid and received when due; or
(g) The sufficiency or value of any amounts of money
and/or Securities held in any Margin Account, Segregated
Security Account or Collateral Account in connection with
transactions by the Fund. In addition, the Custodian shall be
under no duty or obligation to see that any broker, dealer,
futures commission merchant or Clearing Member makes payment to
the Fund of any variation margin payment or similar payment
which the Fund may be entitled to receive from such broker,
dealer, futures commission merchant or Clearing Member, to see
that any payment received by the Custodian from any broker,
dealer, futures commission merchant or Clearing Member is the
amount the Fund is entitled to receive, or to notify the Fund of
the Custodian's receipt or non-receipt of any such payment;
provided however that the Custodian, upon the Fund's written
request, shall, as Custodian, demand from any broker, dealer,
futures commission merchant or Clearing Member identified by the
Fund the payment of any variation margin payment or similar
payment that the Fund asserts it is entitled to receive pursuant
to the terms of a Margin Account Agreement or otherwise from
such broker, dealer, futures commission merchant or Clearing
Member.
3. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not
represented by any check, draft or other instrument for the
payment of money, received by it on behalf of the Fund until the
Custodian actually receives and collects such money directly or
by the final crediting of the account representing the Fund's
interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and
shall not be liable for ascertaining or acting upon any calls,
conversions, exchange, offers, tenders, interest rate changes or
similar matters relating to Securities held in the Depository,
unless the Custodian shall have actually received timely notice
from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the
Depository of any amount payable upon Securities deposited in
the Depository which may mature or be redeemed, retired, called
or otherwise become payable. However, upon receipt of a
Certificate from the Fund of an overdue amount on Securities
held in the Depository, the Custodian shall make a claim against
the Depository on behalf of the Fund, except that the Custodian
shall not be under any obligation to appear in, prosecute or
defend any action, suit or proceeding in respect to any
Securities held by the Depository which in its opinion may
involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be
furnished as often as may be required.
5. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount due
to the Fund from the Transfer Agent of the Fund nor to take any
action to effect payment or distribution by the Transfer Agent
of the Fund of any amount paid by the Custodian to the Transfer
Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in default,
or if payment is refused after due demand or presentation,
unless and until (i) it shall be directed to take such action by
a Certificate and (ii) it shall be assured to its satisfaction
of reimbursement of its costs and expenses in connection with
any such action.
7. The Custodian may appoint one or more banking
institutions as Depository or Depositories or as Sub-Custodian
or Sub-Custodians, including, but not limited to, banking
institutions located in foreign countries, of Securities and
moneys at any time owned by the Fund, upon terms and conditions
approved in a Certificate, which shall, if requested by the
Custodian, be accompanied by an approving resolution of the
Fund's Board of Directors adopted in accordance with Rule 17f-5
under the Investment Company Act of 1940, as amended.
8. The Custodian shall not be under any duty or
obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Fund are such
as properly may be held by the Fund under the provisions of its
Articles of Incorporation.
9. (a) The Custodian shall be entitled to receive
and the Fund agrees to pay to the Custodian all reasonable
out-of-pocket expenses and such compensation and fees as are
specified on Schedule A hereto. The Custodian shall not deem
amounts payable in respect of foreign custodial services to be
out-of-pocket expenses, it being the parties' intention that all
fees for such services shall be as set forth on Schedule B
hereto and shall be provided for the term of this Agreement
without any automatic or unilateral increase. The Custodian
shall have the right to unilaterally increase the figures on
Schedule A on or after March 1, 1991 and on or after each
succeeding March 1 thereafter by an amount equal to 50% of the
increase in the Consumer Price Index for the calendar year
ending on the December 31 immediately preceding the calendar
year in which such March l occurs, provided, however, that
during each such annual period commencing on a March 1, the
aggregate increase during such period shall not be in excess of
10%. Any increase by the Custodian shall be specified in a
written notice delivered to the Fund at least thirty days prior
to the effective date of the increase. The Custodian may charge
such compensation and any expenses incurred by the Custodian in
the performance of its duties pursuant to such agreement against
any money held by it for the account of the Fund. The Custodian
shall also be entitled to charge against any money held by it
for the account of the Fund the amount of any loss, damage,
liability or expense, including counsel fees, for which it shall
be entitled to reimbursement under the provisions of this
Agreement. The expenses which the Custodian may charge against
the account of the Fund include, but are not limited to, the
expenses of Sub-Custodians and foreign branches of the Custodian
incurred in settling outside of New York City transactions
involving the purchase and sale of Securities of the Fund.
(b) The Fund shall receive a credit for each
calendar month against such compensation and fees of the
Custodian as may be payable by the Fund with respect to such
calendar month in an amount equal to the aggregate of its
Earnings Credit for such calendar month. In no event may any
Earnings Credits be carried forward to any fiscal year other
than the fiscal year in which it was earned, or, unless
permitted by applicable law, transferred to, or utilized by, any
other person or entity, provided that any such transferred
Earnings Credit can be used only to offset compensation and fees
of the Custodian for services rendered to such transferee and
cannot be used to pay the Custodian's out-of-pocket expenses.
For purposes of this subsection (b), the Fund is permitted to
transfer Earnings Credits only to The Dreyfus Corporation, its
affiliates and/or any investment company now or in the future
sponsored by The Dreyfus Corporation or any of its affiliates or
for which The Dreyfus Corporation or any of its affiliates acts
as the sole investment adviser or as the principal distributor,
and Daiwa Money Fund Inc. For purposes of this sub-section (b),
a fiscal year shall mean the twelve-month period commencing on
the effective date of this Agreement and on each anniversary
thereof.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by
the Custodian and reasonably believed by the Custodian to be a
Certificate. The Custodian shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received
by the Custodian pursuant to Article IV or XI hereof. The Fund
agrees to forward to the Custodian a Certificate or facsimile
thereof, confirming such Oral Instructions or Written
Instructions in such manner so that such Certificate or
facsimile thereof is received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business of the
same day that such Oral Instructions or Written Instructions are
given to the Custodian. The Fund agrees that the fact that such
confirming instructions are not received by the Custodian shall
in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the
Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions given to
the Custodian hereunder concerning such transactions, provided
such instructions reasonably appear to have been received from
an Authorized Person.
11. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and
reasonably believed by the Custodian to be given in accordance
with the terms and conditions of any Margin Account Agreement.
Without limiting the generality of the foregoing, the Custodian
shall be under no duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained
in any such instrument or other notice including, without
limitation, any specification of any amount to be paid to a
broker, dealer, futures commission merchant or Clearing Member.
12. The books and records pertaining to the Fund
which are in the possession of the Custodian shall be the
property of the Fund. Such books and records shall be prepared
and maintained as required by the Investment Company Act of
1940, as amended, and other applicable securities laws and rules
and regulations. The Fund, or the Fund's authorized
representatives, shall have access to such books and records
during the Custodian's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and
records shall be provided by the Custodian to the Fund or the
Fund's authorized representative at the Fund's expense.
13. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal
accounting control of the Book-Entry System or the Depository,
or O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time
to time.
14. The Fund agrees to indemnify the Custodian
against and save the Custodian harmless from all liability,
claims, losses and demands whatsoever, including attorney's
fees, howsoever arising or incurred because of or in connection
with the Custodian's payment or non-payment of checks pursuant
to paragraph 6 of Article XII as part of any check redemption
privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this
Agreement, the Custodian may deliver and receive Securities, and
receipts with respect to such Securities, and arrange for
payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or
dealers in such Securities.
16. The Custodian shall have no duties or
responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
ARTICLE XVI
TERMINATION
1. (a) Except as provided in subparagraphs (b), (c)
and (d) herein, neither party may terminate this Agreement until
the earlier of the following: (i) August 31, 1993, and (ii) the
third anniversary of the earliest date on which none of the
companies listed on Schedule C hereto is a transfer agency
customer of the Custodian. Any such termination may be effected
only by the terminating party giving to the other party a notice
in writing specifying the date of such termination, which shall
be not less than two hundred seventy (270) days after the date
of giving of such notice.
(b) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under this Agreement and such breach has remained
uncured for a period of thirty days after the Custodian's
receipt from the Fund of written notice specifying such breach.
(c) Either party, immediately upon written
notice to the other party, may terminate this Agreement upon the
Merger or Bankruptcy of the other party.
(d) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under the "Amendment to Transfer Agency Agreements"
dated August 18, 1989 and has not cured such breach as promptly
as practicable and in any event within seven days of its receipt
of written notice of such breach, provided that the Custodian
shall not be permitted to cure any such material breach arising
from the willful misconduct of the Custodian.
In the event notice of termination is given by the
Fund, it shall be accompanied by a copy of a resolution of the
Directors of the Fund, certified by the Secretary or any
Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians, each of which
shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. In the event
notice of termination is given by the Custodian, the Fund shall,
on or before the termination date, deliver to the Custodian a
copy of a resolution of its Directors, certified by the
Secretary or any Assistant Secretary, designating a successor
custodian or custodians. In the absence of such designation by
the Fund, the Custodian may designate a successor custodian
which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits.
Upon the date set forth in such notice, this Agreement shall
terminate and the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on that date deliver
directly to the successor custodian all Securities and moneys
then owned by the Fund and held by it as Custodian, after
deducting all fees, expenses and other amounts for the payment
or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the
Fund or the Custodian in accordance with the preceding
paragraph, the Fund shall, upon the date specified in the notice
of termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and
moneys then owned by the Fund, be deemed to be its own
custodian, and the Custodian shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book-Entry
System, in any Depository or by a Clearing Member which cannot
be delivered to the Fund, to hold such Securities hereunder in
accordance with this Agreement.
ARTICLE XVII
MISCELLANEOUS
1. Annexed here to as Appendix A is a Certificate
signed by two of the present Officers of the Fund under its
seal, setting forth the names and the signatures of the present
Authorized Persons. The Fund agrees to furnish to the Custodian
a new Certificate in similar form in the event that any such
present Authorized Person ceases to be an Authorized Person or
in the event that other or additional Authorized Persons are
elected or appointed. Until such new Certificate shall be
received, the Custodian shall be fully protected in acting under
the provisions of this Agreement upon Oral Instructions or
signatures of the present Authorized Persons as set forth in the
last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate
signed by two of the present Officers of the Fund under its
seal, setting forth the names and the signatures of the present
Officers of the Fund. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event any
such present Officer ceases to be an Officer of the Fund, or in
the event that other or additional Officers are elected or
appointed. Until such new Certificate shall be received, the
Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signatures of the Officers
as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Custodian, shall be sufficiently given if addressed to the
Custodian and mailed or delivered to it at its offices at 90
Washington Street, New York, New York 10015, or at such other
place as the Custodian may from time to time designate in
writing.
4. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Fund, shall be sufficiently given if addressed to the Fund and
mailed or delivered to it at its office at 666 Old Country Road,
Garden City, New York 11530, or at such other place as the Fund
may from time to time designate in writing.
5. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both
parties with the same formality as this Agreement and approved
by a resolution of the Directors of the Fund.
6. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors
and assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of
the Fund, authorized or approved by a resolution of its
Directors.
7. This Agreement shall be construed in accordance
with the laws of the State of New York.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
9. This Agreement shall not be effective on the date
hereof and instead shall become effective on January 1, 1990.
When effective, this Agreement shall supersede the then-existing
Custody Agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto
duly authorized, and their respective corporate seals to be
hereunto affixed, as of the day and year first above written.
DREYFUS TAX EXEMPT BOND FUND, INC.
By: /s/John Pyburn
John Pyburn, Treasurer
Attest:
/s/Robert I. Frenkel
Robert I. Frenkel
THE BANK OF NEW YORK
By: /s/Donald Colby
Donald Colby
Attest:
/s/Robert W. Viets
Robert W. Viets Appendix A
DREYFUS TAX EXEMPT BOND FUND, INC.
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN
ACCOUNT FOR PORTFOLIO SECURITIES
TRANSACTIONS
Group I Group II
All current Fund officers, Paul Casti, Jr. Alan Eisner
Frank Greene, John Bale, Jeffrey Nachman Lawrence Greene
Michael Condon, Steven John Pyburn Julian Smerling
Powanda and Richard Cassaro Joseph DiMartino Thomas Durante
Robert Dubuss James Windels
Joseph Connolly Paul Molloy
Gregory Gruber
Cash Account
1. Fees payable to The Bank of New York pursuant to written
agreement with the Fund for services rendered in its
capacity as Custodian or agent of the Fund, or to The
Shareholder Services Group, Inc. in its capacity as
Transfer Agent or agent of the Fund:
Two (2) signatures required, one of which must be
from Group II, except that an officer of the Fund
who also is listed in Group II shall sign only
once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either
Group I or Group II, or both such Groups, except
that an officer of the Fund who also is listed in
Group II shall sign only once.
3. Other expenses of the Fund, over $5,000 but not over
$25,000:
Two (2) signatures required, one of which must be
from Group II, except that an officer of the Fund
who also is listed in Group II shall sign only
once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or
Group II, including any one of the following:
Paul Casti, Jr., James Windels, Jeffrey Nachman,
John Pyburn or Alan Eisner, except that no
individual shall be authorized to sign more than
once.
Custodian Account for Portfolio Securities Transactions
Two (2) signatures required from any of the following:
All current Fund officers, and Joseph DiMartino,
Robert Dubuss, Alan Eisner, Lawrence Greene,
Julian Smerling, Alan Brown, Richard Cassaro,
Paul Disdier, Alfonso Fulgieri, Gregory Gruber,
Steven Powanda, Michael Condon, Linda Raffinello,
Ann Weintraub, Michael Charash, Theresa Viviano
and Paul Casti, Jr.
DREYFUS TAX EXEMPT BOND FUND, INC.
AMENDED AND RESTATED CUSTODY AGREEMENT
APPENDIX B
The undersigned Officers of the Fund do hereby certify
that the following individuals, whose specimen signatures are on
file with The Bank of New York, have been duly elected or
appointed by the Fund's Board to the position set forth opposite
their names and have qualified therefor:
Name Position
Richard J. Moynihan President and Investment Officer
Howard Stein Investment Officer
Joseph S. DiMartino Investment Officer
A. Paul Disdier Vice President and Investment Officer
Karen M. Hand Vice President and Investment Officer
Stephen C. Kris Vice President and Investment Officer
L. Lawrence Troutman Vice President and Investment Officer
Samuel J. Weinstock Vice President and Investment Officer
Monica S. Wieboldt Vice President and Investment Officer
Mark N. Jacobs Vice President
John J. Pyburn Treasurer
Jeffrey N. Nachman Assistant Treasurer
Daniel C. Maclean Secretary
Frank J. Greene Controller
Steven F. Newman Assistant Secretary
Christine Pavalos Assistant Secretary
/s/Mark N. Jacobs /s/John J. Pyburn
Title: Vice President Title: Treasurer
AMENDED AND RESTATED CUSTODY AGREEMENT
APPENDIX C
The following are designated publications for purposes
of paragraph 5(b) of Article III:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
Schedule A
The fees payable to the Custodian with respect to
securities held in domestic custody are annexed hereto.
DREYFUS TAX EXEMPT BOND FUND, INC.
Domestic Custody Fees
Basic Fee: 1/100th of 1% of the first $500,000,000, and
1/200th of 1% of the excess over $500,000,000 per
annum of the total market value of domestic
securities held.
Custodial Transactions:
$13.00 for each receipt and delivery of securities
(excluding Euro Dollar CDs).
$40.00 for any receipt, delivery or redemption of a
Euro Dollar CD for which BNY's London branch is
utilized for settlement and safekeeping.
$200.00 for the collection of interest on securities
held in "street name."
Schedule B
The fees payable to the Custodian with respect to
securities held in foreign custody are as set forth in a letter
dated August 10, 1989 from Masao Yamaguchi of The Bank of New
York to Kevin Flood of Dreyfus Service Corporation, a copy of
which is annexed hereto.
The above foreign custody fees apply to the following
Global Custody Network countries:
1. Australia 12. Japan
2. Austria 13. Luxembourg
3. Belgium 14. Malaysia
4. Canada 15. Netherlands
5. Denmark 16. New Zealand
6. Finland 17. Norway
7. France 18. Singapore
8. Germany 19. Spain
9. Hong Kong 20. Sweden
10. Ireland 21. Switzerland
11. Italy 22. United Kingdom
[THE BANK OF NEW YORK LETTERHEAD]
August 10, 1989
Mr. Kevin Flood
Senior Vice President
The Dreyfus Corporation
222 Broadway, 7th Floor
New York, NY
Re: Global Custodian Fees
Dear Kevin:
This letter is to confirm our discussion regarding our
Global Custody fee schedule. The fees will be calculated on a
relationship basis with no annual minimum.
- Safekeeping/Income Collection/Capital Changes/Tax
Reclamation/Daily Reporting/Monthly Summary
16 basis points per annum on the market value of
securities held for all of your funds in our sub-
custodian network, up to $250 MM.
15 basis points on the next $250 MM.
14 basis points on the next $250 MM.
12 basis points on the excess.
- Securities Settlements
$35 per transaction - includes our processing and the
sub-custodians.
- Out-of-Pocket Expense
Telex, swift, telephone, securities registration,
etc., are in addition to the above.
- We can provide centralized foreign exchange services.
The above fee schedule is applicable to the 22 countries
listed on Attachment I. Please note that expansion
into other more emerging markets/countries is possible,
but would be covered under a separate agreement.
If you are in agreement with this fee schedule, please sign
and return the enclosed copy of this letter.
Sincerely,
/s/Masao Yamaguchi
Masao Yamaguchi
Approved by:
Kevin Flood
Date:
MY:to
cc: The Bank of New York Dreyfus
F. Ricciardi J. Nachman
[STROOCK AND STROOCK AND LAVAN LETTERHEAD]
September 17, 1976
Dreyfus Tax Exempt Bond Fund, Inc.
767 Fifth Avenue
New York, New York
Dear Sirs:
We have acted as counsel to your corporation (the
"Company") since its organization and in connection with the
filing by the Company of a Registration Statement on Form S-5
with the Securities and Exchange Commission under the Securities
Act of 1933, as amended.
In so acting we have examined a copy of the
Certificate of Incorporation and By-Laws of the Company, each as
amended to date, the original or reproduced or certified copies
of all such records of the Company, and all such agreements,
certificates of public officials, certificates of officers and
representatives of the Company and others, and such other
documents, papers, statutes and authorities as we deem necessary
to form the basis of the opinions hereinafter expressed. We
have assumed the genuineness of all signatures and the
conformity to original documents of the copies of such documents
supplied to us as certified or conformed or reproduced copies.
Based upon the foregoing, we are of the opinion that:
(a) The 6,667 shares of Common Stock of the Company
issued and outstanding on the date hereof have been validly
issued and are fully paid and non-assessable.
(b) The shares of Common Stock of the Company which
are the subject of Registration Statement No. 2-56878 on Form
S-5 filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, will, when issued in
accordance with the Prospectus which constitutes a part thereof,
be legally and validly issued, fully paid and non-assessable.
We hereby consent to being named in said Registration
Statement and in the Prospectus which constitutes a part thereof
as attorneys who have acted upon the legality of said shares of
Common Stock.
We agree that you may file a copy of this opinion as
Exhibit 3 to said Registration Statement.
Very truly yours,
/s/ Stroock & Stroock & Lavan
STROOCK & STROOCK & LAVAN
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated October 4, 1995, in this Registration Statement (Form N-1A
2-56878) of Dreyfus Municipal Bond Fund, Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
October 24, 1995
Other Exhibits (b)
POWER OF ATTORNEY
The undersigned, being members of the Board of the Dreyfus Municipal
Bond Fund, Inc. hereby constitutes and appoints Frederick C. Dey, Eric B.
Fischman, Ruth D. Leibert and John E. Pelletier as the attorney-in-fact for
the proper officers of the Fund, with full power of substitution and
resubstitution; to sign any and all amendments to the Registration Statement
(including Post-Effective Amendments and amendments thereto); and that the
appointment of each of such persons as such attorney-in-fact hereby is
authorized and approved; and that such attorneys-in-fact, and each of them,
shall have full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection with such Registration
Statement and any and all amendments and supplements thereto, as fully to all
intents and purposes as the officer, for whom he is acting at attorney-in-
fact, might or could do in person.
IN WITNESS WHEREOF, the undersigned have executed this Consent as of
June 9, 1995.
/s/ Joseph S. DiMartino /s/ Robin A. Smith
_________________________________ _________________________________
Joseph S. DiMartino Robin A. Smith
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