File Nos. 33-7172
811-4748
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. 13 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 13 [X]
(Check appropriate box or boxes.)
DREYFUS INCOME FUNDS
(formerly, Dreyfus Strategic Income)
(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)
X immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
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
beneficial interest 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 October 31, 1995 was filed on
December 18, 1995.
DREYFUS INCOME FUNDS
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 5
5 Management of the Fund 7
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 18
7 Purchase of Securities Being Offered 8
8 Redemption or Repurchase 13
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-33
13 Investment Objectives and Policies B-2
14 Management of the Fund B-16
15 Control Persons and Principal B-14
Holders of Securities
16 Investment Advisory and Other B-19
Services
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS INCOME FUNDS
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-32
18 Capital Stock and Other Securities B-33
19 Purchase, Redemption and Pricing B-21, 23, 28
of Securities Being Offered
20 Tax Status *
21 Underwriters B-15
22 Calculations of Performance Data B-32
23 Financial Statements B-44
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
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 JANUARY 2, 1996
DREYFUS STRATEGIC INCOME FUND
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DREYFUS STRATEGIC INCOME FUND (THE "FUND") IS A SEPARATE DIVERSIFIED
PORTFOLIO OF DREYFUS INCOME FUNDS, AN OPEN-END, MANAGEMENT INVESTMENT
COMPANY (THE "COMPANY"), KNOWN AS A MUTUAL FUND. THE FUND'S INVESTMENT
OBJECTIVE IS TO MAXIMIZE CURRENT INCOME BY INVESTING PRINCIPALLY IN DEBT
SECURITIES OF DOMESTIC AND FOREIGN ISSUERS.
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 JANUARY 2, 1996,
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........................... 5
Management of the Fund............................ 7
How to Buy Shares................................. 8
Shareholder Services.............................. 10
How to Redeem Shares.............................. 12
Shareholder Services Plan......................... 15
Dividends, Distributions and Taxes................ 15
Performance Information........................... 16
General Information............................... 17
Appendix.......................................... 18
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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 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees................................. .60%
Other Expenses.................................. .44%
Total Fund Operating Expenses................... 1.04%
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:
$11 $33 $57 $127
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 information in the foregoing table has been
restated to reflect the Fund's termination of its Rule 12b-1 Plan and the
adoption of a Shareholder Services Plan, effective July 24, 1995. You can
purchase Fund shares without charge directly from the Fund's distributor; a
nominal fee may be charged if transactions in Fund shares are effected
through a securities dealer, bank or other financial institution. For a
further description of the various costs and expenses incurred in the
operation of the Fund, see "Management of the Fund," "How to Buy Shares" and
"Shareholder Services Plan."
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 beneficial interest 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 OCTOBER 31,
- -------------------------------------------------------------------------------------
1986(1) 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.........$13.50 $13.51 $12.57 $12.94 $13.37 $12.35 $13.44 $14.02 $15.36 $12.95
INVESTMENT OPERATIONS:
Investment income-net....................... .06 1.19 1.24 1.21 1.18 1.16 1.07 1.01 .95 .93
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions....................... -_ (.95) .74 .44 (1.02) 1.09 .58 1.41 (2.04) 1.27
-------- ------- ------- ------- ------- ------- ------- ------ ------- ----
TOTAL FROM INVESTMENT OPERATIONS............ .06 .24 1.98 1.65 .16 2.25 1.65 2.42 (1.09) 2.20
-------- ------ ------- ------- ------- ------- ------- ------ ------ -----
DISTRIBUTIONS:
Dividends from investment income-net (.05) (1.18) (1.24) (1.22) (1.18) (1.16) (1.07) (1.01) (.95) (.93)
Dividends from net realized
gain on investments......................... -_ -_ (.37) -- -_ -_ -_ (.07) (.37) --
-------- ------- ------- ------- ------- ------- ------- ------ ------ ------
TOTAL DISTRIBUTIONS......................... (.05) (1.18) (1.61) (1.22) (1.18) (1.16) (1.07) (1.08) (1.32) (.93)
-------- ------- ------- ------- ------- ------- ------- ------ ------ ------
Net asset value, end of year................$13.51 $12.57 $12.94 $13.37 $12.35 $13.44 $14.02 $15.36 $12.95 $14.22
======== ======= ======= ======= ======= ======= ======= ====== ====== ======
TOTAL INVESTMENT RETURN .................... 5.03%(2) 1.74% 16.71% 13.44% 1.32% 18.94% 12.64% 17.93% (7.44%) 17.57%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets.......................... -_ .26% .49% .50% .50% .72% .85% .84% .94% 1.04%
Ratio of interest expense
to average net assets....................... -_ .15% .17% .34% .32% .15% -_ -_ -_ -_
Ratio of net investment income to
average net assets........................ 5.64%(2) 9.40% 9.72% 9.34% 9.24% 8.93% 7.58% 6.83% 6.84% 6.87%
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corpora-
tion (limited to the expense limitation pro-
vision of the management agreement) 1.50%(2) 1.24% 1.01% 1.00% 1.00% .78% .40% .24% .11% -_
Portfolio Turnover Rate..................... -_ 76.01% 154.73% 93.41% 16.40% 16.08% 72.82% 118.38% 161.35% 176.59%
Net Assets, end of year
(000's omitted)............................. $1,525 $31,809 $39,058 $41,679 $41,927 $57,336 $149,801 $375,459 $322,487 $320,345
(1) From October 1, 1986 (commencement of operations) to October 31, 1986.
(2) Annualized.
</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.
<TABLE>
<CAPTION>
DEBT OUTSTANDING
YEAR ENDED OCTOBER 31,
- ----------------------------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993 1994 1995
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Amount of debt outstanding at
end of year (in thousands)........... __ __ __ $ 650 __ __ __ __ __ --
Average amount of debt outstanding
throughout year (in thousands)(2) __ $ 460 $ 739 $1,321 $1,408 $1,011 -- -- -- --
Average number of shares outstanding
throughout year (in thousands)(3) __ 2,077 2,737 3,093 3,260 3,661 __ __ -- --
Average amount of debt per
share throughout year................ __ $ .22 $ .27 $ .43 $ .43 $ .28 __ __ __ __
(1)From October 1, 1986 (commencement of operations) to October 31, 1986.
(2)Based upon daily outstanding borrowings.
(3)Based upon month-end balances.
</TABLE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to maximize current
income by investing principally in debt securities of domestic
and foreign issuers. It 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.
MANAGEMENT POLICIES
At least 65% of the Fund's total assets ordinarily will be
invested in debt securities, such as bonds, debentures, notes,
mortgage-related securities, convertible debt obligations and
convertible preferred stocks, of
domestic and foreign issuers. See "Appendix_Certain Portfolio
Securities."
The issuers of these obligations include governments, their
political subdivisions, agencies or municipalities, and
corporations.
It currently is the intention of the Fund to invest at
least 80% of the Fund's total assets in investment grade debt
securities and the remainder in debt securities rated Ba by
Moody's Investors Service, Inc. ("Moody's") and BB by Standard
& Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc. ("S&P"), or, if unrated, determined
by the Dreyfus Corporation to be of comparable quality.
However, it is a
fundamental policy of the Fund that at least 95% of the debt
securities purchased by the Fund will have a rating
of at least Caa by Moody's or CCC by S&P or will be of
comparable
quality as determined by The Dreyfus Corporation, and that no
more than 5% of the debt securities will have a rating as low as
the lowest rating assigned by Moody's or S&P.
Debt securities rated Baa by Moody's and BBB by S&P are
considered investment grade obligations which lack outstanding
investment characteristics and may have speculative
characteristics as well. See "Investment Considerations and
Risks_Lower Rated Securities" below for a
discussion of certain risks. The Fund may hold securities with
ratings higher than those set forth above when the yield
differential between lower rated and higher rated fixed-income
securities narrows and the risk of loss may be
reduced substantially with only a relatively small reduction in
yield and also when market or economic conditions dictate a more
defensive strategy. The Fund will be particularly alert to
favorable arbitrage
opportunities (such as those resulting from favorable interest
rate differentials) arising from the relative yields of the
various types of securities in which the Fund
may invest and market conditions generally.
The Fund may invest up to 30% of its total assets in debt
securities of foreign companies and foreign governments. Among
the foreign securities in which the Fund may invest are the
foreign bank obligations, as well as Eurodollar debt
obligations, which are U.S. dollar-denominated debt
obligations issued by foreign issuers, often guaranteed by
subsidiaries of domestic companies.
In connection with its purchases of convertible
securities, the Fund from time to time may hold common stock
received upon the conversion of the security. The Fund does not
intend to retain the common stock in its
portfolio and will sell it as promptly as it can and in a manner
which it believes will reduce the risk to the Fund of loss in
connection with the sale.
While seeking other desirable investments, the Fund may
invest in money market instruments consisting of U.S. Government
securities, certificates of deposit, time deposits, bankers'
acceptances, short term investment grade corporate bonds and
other short-term debt instruments,
and repurchase agreements, as set forth under "Appendix --
Certain Portfolio Securities -- Money Market Instruments." Under
normal market conditions, the Fund does not expect to have a
substantial portion of its assets invested in
money market instruments. However, when The Dreyfus Corporation
determines that adverse market conditions exist, the Fund may
adopt a temporary defensive posture and invest all of its assets
in money market instruments.
The Fund's annual portfolio turnover rate is not
expected
to exceed 175%. 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. In an effort to
increase returns, the Fund may engage in various investment
techniques, such as foreign currency transactions, leveraging,
options and futures transactions, lending portfolio securities
and short-selling. See also "Investment Considerations and
Risks" and "Appendix_Investment Techniques" below and
"Investment Objectives and Management Policies_Management
Policies" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- The Fund's net asset value per share should be
expected to fluctuate. Investors should consider the Fund as a
supplement to an overall investment program and should invest
only if they are willing to undertake the risks involved. See
"Investment Objectives and Management Policies_Management
Policies" in the Statement of Additional Information for
a further discussion of certain risks.
FIXED-INCOME SECURITIES -- Even though interest-bearing
securities are investments which promise a stable stream of
income, the prices of such securities generally are inversely
affected by changes in interest rates and,
therefore, are subject to the risk of market price fluctuations.
The values of fixed-income securities also may be affected by
changes in the credit rating or financial condition of the
issuer. Certain securities purchased by the Fund, such as those
rated Baa or lower by Moody's and BBB or lower by
S&P, may be subject to such risk with respect to the issuing
entity and to greater market fluctuations than certain lower
yielding, higher rated fixed-income securities. See "Lower Rated
Securities" below and "Appendix_Certain Portfolio
Securities_Ratings," and "Appendix" in the
Statement of Additional Information.
Lower Rated Securities _ The Fund may invest in higher yielding
(and, therefore, higher risk) debt securities to the extent
described above. These are securities such as those rated Ba by
Moody's or BB by S&P, or as low as the lowest rating assigned by
Moody's or S&P (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 retail secondary
market
for these securities may be less liquid than that of higher
rated securities; adverse conditions could make it
difficult at times for the Fund to sell certain securities or
could result in lower prices than those used in calculating the
Fund's net asset value. The value of these securities, as is the
case with the value of higher rated Fixed-Income Securities,
will be inversely affected by changes in interest
rates. See "Appendix_Certain Portfolio Securities_Ratings"
below.
FOREIGN SECURITIES -- Foreign securities markets generally are
not as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most
foreign securities markets are less than in the United States
and, at times, volatility of price can be greater than in the
United States.
Because evidences of ownership of such securities usually
are held outside the United States, the Fund will be subject to
additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of
foreign deposits and possible adoption of
governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities or
might restrict the payment of principal and interest to
investors
located outside the country of the issuer, whether from currency
blockage or otherwise.
Since foreign securities often are purchased with and
payable in currencies of foreign countries, the value of these
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations.
FOREIGN CURRENCY TRANSACTIONS -- Currency exchange rates may
fluctuate significantly over short periods of time. They
generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen
from
an international perspective. Currency exchange rates also can
be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States
or abroad. See "Appendix _ Investment Techniques _ Foreign
Currency Transactions."
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. The
Derivatives the Fund may use include
options and futures. While Derivatives can be used effectively
in
furtherance of the Fund's investment objectives, 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 Objectives
and Management Policies_Management Policies_Derivatives" in the
Statement of Additional Information.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund
are
made independently from those of the other investment companies
advised by The Dreyfus Corporation. If, however, such other
investment companies desire to invest in, or dispose of, the
same
securities 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.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200
Park Avenue, New York, New York 10166, was formed in 1947 and
serves as the Fund's investment adviser. The Dreyfus Corporation
is a wholly-owned subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of December 1, 1995, The Dreyfus
Corporation managed or administered approximately $__ billion in
assets for more than __ 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
Company's Board in accordance with Massachusetts law. The Fund's
primary portfolio manager is Kevin McClintock.
He has held that position since December 1995 and has been
employed by The Dreyfus Corporation since November 1995. From
1993 through October 1995, Mr. McClintock was Managing Director,
Fixed Income Investments, for Aeltus Investment Management Inc.,
a subsidiary of the Aetna Corporation. Prior
thereto, he was employed in various capacities by the Aetna
Corporation and its subsidiaries, including head of Separate
Account Portfolio management for
Aetna Investment Management. 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., AFCOCredit Corporation and a
number of companies known as Mellon Financial Services
Corporations. Through its subsidiaries, including The Dreyfus
Corporation, Mellon managed more than $209 billion in assets as
of September 30, 1995, including approximately $80
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 $717 billion in assets,
including approximately $55 billion in mutual fund assets.
For the fiscal year ended October 31, 1995, the Fund paid
The Dreyfus Corporation a monthly management 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 Fund's overall expense ratio 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. The
Dreyfus Corporation or its affiliates may pay certain entities,
including banks, an account fee and also a fee in connection
with the servicing of Fund shareholders.
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 of all of such
payments to pay Service Agents (as defined below) in respect of
these services.
DISTRIBUTOR -- 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 is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus
Corporation, P.O. Box 9671, Providence, Rhode Island 02903-9671,
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 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
(collectively, "Service Agents"). Share certificates are issued
only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any
purchase order.
The minimum initial purchase is $2,500, or $1,000 if you
are a client of a Service Agent which has made an aggregate
minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans,
IRAs, SEP-IRAs and 403(b)(7) Plans with only one participant is
$750, with no minimum for subsequent purchases. Individuals who
open an IRA also may open a non-working spousal IRA with a
minimum initial investment of $250. Subsequent
investments in a spousal IRA must be at least $250. The initial
investment must be accompanied by the 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 Company'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 offer
Fund shares without regard to minimum purchase requirements to
employees participating in
certain qualified and non-qualified employee benefit plans or
other programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund. 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,
Dreyfus 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 convenient 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," or, if for
Dreyfus retirement plan accounts, to "The Dreyfus Trust Company,
Custodian." 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. For Dreyfus
retirement plan accounts, both initial and subsequent
investments
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Neither initial nor
subsequent 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 #8900119330/Dreyfus
Strategic Income Fund, 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 registration 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 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
manner 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."
Fund shares are sold on a continuous basis at the net
asset
value per share next determined after an order in proper form is
received by the Transfer Agent or other agent. 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. For purposes of determining net
asset value per share, options
contracts will be valued 15 minutes after the close of trading
on the floor of the New York Stock Exchange. Net asset value per
share is computed by dividing the value of the 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
based on market value or, where market quotations are
not readily available, based on fair value as determined in good
faith by the Company's Board. For further information regarding
the methods employed in valuing Fund investments,
see "Determination of Net Asset Value" in the Statement of
Additional Information.
For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of
Fund
shares may be transmitted, and must be received by the Transfer
Agent, within three business days after the
order is placed. If such payment is not received within three
business days after the order is placed, the order may be
canceled and the institution could be held liable for resulting
fees and/or losses.
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 nonqualified 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
$1,000,000 ("Eligible Benefit Plans"). Shares
of funds in the Dreyfus Family of Funds by an Eligible Benefit
Plan will be aggregated to determine the fee payable. 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.
Federal regulations require that you provide a certified
TIN upon opening or reopening an account. See "Dividends,
Distributions and Taxes" and the 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 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 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452.
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 to you. If you desire to use this service, you should
consult your Service Agent or call 1-800-645-6561 to determine
if it is available and whether any other 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 current 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 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. 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, Wire 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
reinvestments of dividends or distributions paid with
respect to the foregoing categories of shares. To qualify, at
the
time of your exchange you must notify the Transfer Agent or your
Service Agent must notify the Distributor. 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 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.
DREYFUS-AUTOMATIC ASSET BUILDER Registration 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 bank 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 6527, Providence, Rhode Island 02940-6527, or,
if for Dreyfus Retirement Plan accounts, to The Dreyfus Trust
Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427, 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 GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus
Government
Direct Deposit Privilege enables you to purchase 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 your
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 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.
Shares held under Keogh Plans, IRAs or other retirement plans
are not eligible for this Privilege.
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 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.
Investors who wish to purchase Fund shares through the Dreyfus
Step Program in conjunction with a Dreyfus-sponsored retirement
plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts."
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 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. If you are investing in a fund that charges a contingent
deferred sales charge, the shares purchased will be subject on
redemption to the contingent deferred sales charge, if any,
applicable to the purchased shares. 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
Dividend 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. Shares held
under Keogh Plans, IRAs or other retirement plans are not
eligible for Dreyfus Dividend Sweep.
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 50 cents 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.
RETIREMENT PLANS -- The Fund offers a variety of pension and
profit-sharing plans, including Keogh Plans, IRAs, SEP-IRAs and
IRA "Rollover Accounts," 401(k) Salary Reduction Plans and
403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by
calling the following numbers toll free: for Keogh Plans, please
call 1-800-358-5566; for IRAs and IRA "Rollover Accounts,"
please
call 1-800-645-6561; for SEP-IRAs, 401(k) Salary Reduction Plans
and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM 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.
Service Agents 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
on 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 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 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 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 30 days' written notice if your
account's net asset value is $500 or less and remains so during
the notice period.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, 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 TELE-TRANSFER Privilege. Other redemption procedures may
be in effect for clients of certain Service Agents. The Fund
makes available to certain large
institutions the ability to issue redemption instructions
through
compatible computer facilities. The Fund 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.
In addition, the Distributor or its designee will accept
orders from dealers with which the Distributor has sales
agreements for the repurchase of
shares held by shareholders. Repurchase orders received by the
dealer prior to the close of trading on the New York Stock
Exchange on a business day and transmitted to the Distributor or
its designee prior to the close of its business day (normally
5:15 p.m., New York time) are effected at the price
determined as of the close of trading on the floor of the New
York Stock Exchange on that day. Otherwise, the shares will be
redeemed at the next determined net asset value. It is the
responsibility of the dealer to transmit orders on a timely
basis. The dealer may charge the shareholder a
fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
You may redeem shares by telephone if you have checked the
appropriate box on the 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 shares by written request mailed to The Dreyfus
Family
of Funds, P.O. Box 6527, Providence, Rhode Island 02940-6527.
Redemption requests for Dreyfus Retirement Plan accounts should
be sent to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
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.
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 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452. The Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire.
Shares held under Keogh Plans, IRAs or other
retirement plans, and 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 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. Shares held under Keogh Plans,
IRAs or other retirement plans, and 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
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 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452.
Shares held under Keogh Plans, IRAs or other retirement plans,
and 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 pays the Distributor for the
provision
of certain services to shareholders a fee at the annual rate of
.25 of 1% of the value of the Fund's average daily net assets.
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. The Distributor may make payments to
Service Agents in respect of these services. The Distributor
determines the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as amended (the
"Code"), the Fund is treated as a separate entity for purposes
of qualification and taxation as a regulated investment company.
The Fund ordinarily declares dividends from its net investment
income
on each day that the New York Stock Exchange is open for
business. The Fund's earnings for Saturdays, Sundays and
holidays are declared as dividends on the preceding business
day.
Dividends usually are paid on the last business day of each
month
and automatically reinvested in additional Fund shares at net
asset value, without a sales load, unless you elect payment in
cash. 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 account-holder and indicate in a partial redemption
request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying account-
holder 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 of 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 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 such
amounts in additional shares at net asset value without a sales
load. All expenses are accrued daily and deducted before
declaration of dividends.
Fund shares begin earning income dividends on the day
immediately available funds ("Federal Funds" (monies of member
banks within the Federal Reserve System which are held on
deposit
at a Federal Reserve Bank)) are received by the Transfer Agent
in written or telegraphic form. If a purchase order is not
accompanied by remittance in Federal Funds, there may be a delay
between the time the purchase order becomes effective and the
time the shares purchased start earning dividends. If your
payment is not made in Federal Funds, it must be converted into
Federal Funds. This usually occurs within
one business day of receipt of a bank wire and within two
business days of receipt of a check drawn on a member bank of
the Federal Reserve System. Checks drawn on banks which are not
members of the Federal Reserve System may take considerably
longer to convert into Federal Funds.
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 from the sale or
other
disposition of certain market discount bonds, paid by the Fund
will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in
additional Fund shares. Distributions from net realized
long-term
capital gains of the Fund to U.S. shareholders generally are
taxable as long-term capital gains for
Federal income tax purposes, regardless of how long shareholders
have held their Fund shares and whether such distributions are
received in cash or reinvested in additional Fund shares. The
Code provides that the net long-term capital gain of an
individual generally will not be subject to
Federal income tax at a rate in excess of 28%. Dividends and
distributions may be subject to state and local taxes.
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 from 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.
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 is 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.
Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net realized securities
gains of the Fund 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 dividend 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 dividend and interest
income on your 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 Company believes that the Fund has
qualified for the fiscal year ended October 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
interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income taxes to
the extent its earnings are distributed in accordance with
applicable provisions of the Code. 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 and local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be
calculated on several bases, including current 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 expense limitations in effect. See "Management of the Fund."
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 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, or for shorter
time periods depending upon the length of time during which the
Fund has operated.
Total return is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the net asset value per share at the
beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of
a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past results are
not necessarily representative of future results. Investors
should remember that performance is a function of portfolio
management in selecting the type and quality of portfolio
securities and is affected by operating expenses.
Performance information, such as that described above, may not
provide a basis for comparison with other investments or other
investment companies using a different method of calculating
performance.
Comparative performance information may be used from time
to time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Moody's Bond Survey
Bond Index, Lehman Brothers Municipal Bond Index, Morningstar,
Inc., Value Line Mutual Fund Survey and other industry
publications.
GENERAL INFORMATION
The Company was organized as an unincorporated business
trust under the laws of the Commonwealth of Massachusetts
pursuant to an Agreement and Declaration of Trust (the "Trust
Agreement") dated July 24, 1985, and
commenced operations on October 1, 1986. Before January 1, 1996,
the Company's name was Dreyfus Strategic Income. The Company is
authorized to issue an unlimited number of shares of beneficial
interest, par value $.001 per share. Each share has one vote.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of a Massachusetts business trust. However, the
Trust Agreement disclaims shareholder liability for acts or
obligations
of the Company and requires that notice of such disclaimer be
given in each agreement, obligation or
instrument entered into or executed by the Company or a Trustee.
The Trust Agreement provides for indemnification from the Fund's
property for all losses and expenses of any shareholder held
personally liable for the obligations of the Fund. Thus, the
risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet
its obligations, a possibility which management believes is
remote. Upon payment of any liability incurred by the Fund, the
shareholder paying such liability will be
entitled to reimbursement from the general assets of the Fund.
The Company intends to conduct its operations in such a way so
as
to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Fund.
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 Board members or the appointment of
auditors. However, pursuant to the Company's By-Laws, the
holders of at least 10% of the shares outstanding and entitled
to
vote may require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from office
or for any other purpose. Shareholders
may remove a Board member by the affirmative vote of not less
than two-thirds of the Company's outstanding voting shares. In
addition, the Board will call a meeting of shareholders for the
purpose of electing Board members if, at any
time, less than a majority of the Board members then holding
office have been elected by shareholders.
The Company is a "series fund," which is a mutual fund
divided into separate portfolios, each of which is treated as a
separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to
be a shareholder of any other portfolio. For
certain matters shareholders vote together as a group; as to
others they vote separately by portfolio. By this Prospectus,
shares of the Fund are being offered. Other portfolios are sold
pursuant to other offering documents.
To date, the Board has authorized the creation of three
series of shares. All consideration received by the Company for
shares of one of the series and all assets in which such
consideration is invested will belong to that series (subject
only to the rights of creditors of the Company) and will
be subject to the liabilities related thereto. The income
attributable to, and the expenses of, one series are treated
separately from those of the other series. The Company has the
ability to create, from time to time, new series without
shareholder approval.
The Transfer Agent maintains a record of your ownership
and sends you 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 the U.S. and Canada, call 516-794-5452.
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS -- Foreign currency transactions
may be entered into for a variety of purposes, including: to fix
in U.S. dollars, between trade and settlement date, the value of
a security the Fund has agreed to buy
or sell; or to hedge the U.S. dollar value of securities the
Fund
already owns, particularly if it expects a decrease in the value
of the currency in which the foreign security is denominated; or
to gain exposure to the foreign currency in an attempt to
realize
gains.
Foreign currency transactions may involve, for example,
the Fund's purchase of foreign currencies for U.S. dollars or
the maintenance of short positions in foreign currencies, which
would
involve the Fund agreeing to exchange an amount of a currency it
did not currently own for another currency at a future date in
anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to
receive in the exchange. The Fund's success in these
transactions
will depend principally on The Dreyfus Corporation's ability to
predict accurately the future exchange
rates between foreign currencies and the U.S. dollar.
LEVERAGE -- Leveraging will exaggerate the effect on net asset
value of any increase or decrease in the market value of the
Fund's portfolio. Money borrowed for leveraging will be limited
to 331/3% of the value of the Fund's
total assets. These borrowings will be subject to interest costs
which may or may not be recovered by appreciation of the
securities purchased; in certain cases, interest costs may
exceed the return received on the securities purchased.
The Fund may enter into reverse repurchase agreements
with banks, brokers or dealers. This form of borrowing involves
the transfer by the Fund
of an underlying debt instrument in return for cash proceeds
based on a percentage of the value of the security. The Fund
retains the right to receive interest and principal payments on
the security. At an agreed upon future date, the Fund
repurchases
the security at principal plus accrued interest. Except for
these
transactions, the Fund's borrowings generally will be unsecured.
SHORT SELLING -- In these transactions, the Fund sells a
security
it does not own in anticipation of a decline in the market value
of the security. To complete the transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund is
obligated to replace the security borrowed by
purchasing it subsequently at the market price at the time of
replacement. The price at such time may be more or less than the
price at which the security was sold by the Fund. The Fund will
incur a loss if the price of the security increases between the
date of the short sale and the date on which
the Fund replaces the borrowed security; it will realize a gain
if the security declines in price between those dates.
Securities will not be sold short if, after effect is given
to
any such short sale, the total market value of all securities
sold short would exceed 25% of the value of the Fund's net
assets. The Fund may not sell short
the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value
of the Fund's net assets. The Fund may not sell short the
securities of any class of an issuer if, as a result
of such sale, the Fund would have sold short in the aggregate
more than 5% of the outstanding securities of that class.
The Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in
order to hedge an unrealized gain on the security. At no time
will more than 15% of the value of the Fund's net assets be in
deposits on short sales against the box.
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
A-1 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. The Fund might experience risk of loss if
the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
USE OF DERIVATIVES -- The Fund may invest in the following types
of Derivatives: options and futures, and mortgage-related
securities. These instruments and certain related risks are
described more specifically under "Investment Objective and
Management Policies--Management Policies_Derivatives" in the
Statement of Additional Information.
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.
In addition, 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 it were unable to liquidate its position
because of an illiquid secondary market. The market
for many Derivatives is, or suddenly can become, illiquid.
Changes in liquidity may result in significant, rapid and
unpredictable changes in the prices for Derivatives.
Although 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 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.
FORWARD COMMITMENTS -- The Fund may purchase securities
on a forward commitment or when-issued basis, which means that
delivery and payment take
place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate that will
be 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 A-2least equal at all
times to the amount of the commitments will be established
and maintained at the Fund's custodian bank.
FORWARD ROLL TRANSACTIONS -- In order to enhance current income,
the Fund may enter into forward roll transactions with respect
to
mortgage-related securities. In a forward roll transaction, the
Fund sells a mortgage security to a financial institution, such
as a bank or broker-dealer, and simultaneously agrees to
repurchase a similar security from the institution
at a later date at an agreed-upon price. The mortgage securities
that are repurchased will bear the same interest rate as those
sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories than those sold.
During the period between the sale and repurchase, the Fund will
not be entitled to receive interest and principal
payments on the securities sold. Proceeds of the sale will be
invested in short-term instruments, particularly repurchase
agreements, and the income from these investments, together with
any additional fee income received on
the sale will generate income for the Fund exceeding the yield
on
the securities sold. Forward roll transactions involve the risk
that the market value of the securities sold by the Fund may
decline below the repurchase
price of those securities. A segregated account of the Fund
consisting of cash, U.S. Government securities or other high
quality liquid debt securities at least equal to the amount of
the repurchase price (including accrued
interest) will be established and maintained at the Fund's
custodian bank.
CERTAIN PORTFOLIO SECURITIES
Convertible Securities _ Convertible securities are fixed-income
securities that may be converted at either a stated price or
stated rate into underlying shares of common stock. Convertible
securities have characteristics similar
to both fixed-income and equity securities. Convertible
securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although
convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however,
convertible securities typically have lower
ratings than similar non-convertible securities.
Mortgage-Related Securities _ Mortgage-related securities are a
form of Derivative collateralized by pools of mortgages
assembled
for sale to investors by various governmental agencies, such as
the Government National Mortgage Association and government
related organizations such as the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation,
as well as by private issuers such as commercial banks, savings
and loan institutions, mortgage banks and private mortgage
insurance companies, and similar foreign entities. The
mortgage-related securities which may be
purchased include those with fixed, floating and variable
interest rates, those with interest rates that change based on
multiples of changes in interest rates and those with interest
rates that change inversely to changes
in interest rates, as well as stripped mortgage-backed
securities. Stripped mortgage-backed securities usually are
structured with two classes that receive different proportions
of interest and principal distributions on a
pool of mortgage-backed securities or whole loans. A common type
of stripped mortgage-backed security will have one class
receiving some of the interest and most of the principal from
the mortgage collateral, while the other class
will receive most of the interest and the remainder of the
principal. Although certain mortgage-related securities are
guaranteed by a third party or otherwise similarly secured, the
market value of the security, which may
fluctuate, is not secured. If a mortgage-related security is
purchased at a premium, all or part of the premium may be lost
if
there is a decline in the market value of the security, whether
resulting from changes in interest
rates or prepayments on the underlying mortgage collateral. As
with other interest-bearing securities, the prices of certain of
these securities are inversely affected by changes in interest
rates. However, although the value
of a mortgage-related security may decline when interest rates
rise, the converse is not necessarily true, since in periods of
declining interest rates the mortgages underlying the security
are more likely to be prepaid.
For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled pre A-3
payments on the underlying mortgages, and, therefore, it is not
possible to predict accurately the security's return to the
Fund.
Moreover, with respect to stripped mortgage-backed securities,
if the underlying mortgage securities
experience greater than anticipated prepayments of principal,
the
Fund may fail to fully recoup its initial investment even if the
securities are rated in the highest rating category by a
nationally recognized statistical rating organization. For
further discussion concerning the investment considerations
involved, see "Description of the Fund_Investment Considerations
and Risks_Fixed-Income Securities" and "Illiquid Securities"
below.
MONEY MARKET INSTRUMENTS -- The Fund may invest in the following
types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities that differ
in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities are supported by the
full faith and credit of the U.S. Treasury; others, by the right
of the issuer to borrow from the Treasury;
others, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality;
and others, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies and
instrumentalities, no assurance can be given that it will always
do so since it is not so obligated by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the
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. 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. The Fund may enter into
repurchase agreements with certain banks or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other
short-term
obligations issued by domestic banks, foreign subsidiaries or
foreign branches of domestic banks, domestic and foreign
branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to
such
securities issued by foreign subsidiaries or foreign branches of
domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to
additional investment risks that are different in some respects
from those incurred by a fund which invests only in debt
obligations of U.S. domestic issuers.
Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited
with it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event
longer than seven days) at a stated interest rate. See
"Description of the Fund_Investment Considerations and
Risks_Foreign Securities."
Bankers' acceptances are credit instruments evidencing
the obligation of a bank to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the
bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may
include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
COMMERCIAL PAPER. Commercial paper consists of
short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial
paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated
not lower than Prime-1 by Moody's, or A-1 by S&P, (b) issued by
companies having an outstanding unsecured debt
issue currently rated at least A3 by Moody's or A- by S&P, or
(c)
if unrated, determined by The Dreyfus Corporation to be of
comparable quality to those rated obligations which may be
purchased by the Fund.
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, repurchase agreements
providing for settlement in more than seven days after notice,
and certain privately negotiated, non-exchange traded options
and
securities used to cover such options. As to these securities,
the Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available
at a price the Fund deems representative of their value, the
value of the Fund's net assets could be adversely affected.
Ratings _ Securities 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.
Securities 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. Securities rated Caa by Moody's are of
poor standing and may be in default or there may be present
elements of danger with respect to principal or interest. S&P
typically assigns a CCC rating to debt which has a current
identifiable vulnerability to default and is dependent upon
favorable business, financial and economic conditions to meet
timely payments of interest and repayment of principal. Such
securities, though high yielding, are characterized by great
risk. See "Appendix" in the Statement of
Additional Information for a general description of securities
ratings.
The ratings of Moody's and S&P represent their opinions
as to the quality of the obligations which they undertake to
rate. 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 such obligations. 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 analysis than might be the case for a fund
that invested in higher rated securities.
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>
Strategic Income
Prospectus
<PAGE>
DREYFUS INCOME FUNDS
DREYFUS EQUITY DIVIDEND FUND
DREYFUS STRATEGIC INCOME FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 2, 1996
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of the series named above (each, a
"Fund")
of Dreyfus Income Funds (the "Company"), dated January 2, 1996,
as each may be revised from time to time. To obtain a copy of
the relevant Fund's Prospectus, please write to
a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as each
Fund's investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is
the distributor of each Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies . .. . B-2
Management of the Company . . . . . . . . . . . . B-16
Management Agreement. . . . . . . . . . . . . . . . . B-19
Purchase of Shares. . . . . . . . . . . . . . . . . . B-21
Shareholder Services Plan . . . . . . . . . . . . . . B-22
Redemption of Shares. . . . . . . . . . . . . . . . . B-23
Shareholder Services. . . . . . . . . . . . . . . . . B-25
Determination of Net Asset Value. . . . . . . . . . . B-28
Dividends, Distributions and Taxes. . . . . . . . . . B-29
Portfolio Transactions. . . . . . . . . . . . . . . . B-31
Performance Information . . . . . . . . . . . . . . . B-32
Information About the Funds . . . . . . . . . . . . . B-33
Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors . . . . B-33
Appendix. . . . . . . . . . . . . . . . . . . . . . . B-35
Financial Statements. . . . . . . . . . . . . . . . . B-44
Report of Independent Auditors. . . . . . . . . . . . B-56
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTIONS IN EACH FUND'S PROSPECTUS ENTITLED
"DESCRIPTION OF THE FUND" AND "APPENDIX."
Portfolio Securities
American Depositary Receipts. (Dreyfus Equity Dividend Fund
only) The Fund may invest in American Depositary Receipts,
through "sponsored" or "unsponsored" facilities. A sponsored
facility is established jointly by the issuer of the underlying
security and a depositary, whereas a depositary may establish an
unsponsored facility without participation by
the issuer of the deposited security. Holders of unsponsored
depositary receipts generally bear all the costs of such
facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder
communications received from the issuer of the
deposited security or to pass through voting rights to the
holders of such receipts in respect of the deposited securities.
Repurchase Agreements. The Fund's custodian or
sub-custodian will have custody of, and will hold in a
segregated
account, securities acquired by a 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, each Fund will enter
into repurchase agreements only with domestic banks with total
assets in excess of $1 billion, or primary government securities
dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which
the Fund may invest, and will require that additional securities
be deposited with it if the value of the securities purchased
should decrease below the resale price.
Commercial Paper and Other Short-Term Corporate
Obligations.
These instruments include variable amount master demand notes,
which are obligations that permit a Fund to invest fluctuating
amounts at varying rates of interest pursuant to direct
arrangements between the Fund, as lender, and the borrower.
These notes permit daily changes in the amounts borrowed.
Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that
such
instruments generally will be traded, and there generally is no
established secondary market for these obligations, although
they
are redeemable at face value, plus accrued interest, at any
time.
Accordingly, where these obligations are not secured by letters
of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently
are not rated by credit rating
agencies, and a Fund may invest in them only if at the time of
an
investment the borrower meets the criteria set forth in the
Fund's Prospectus for other commercial paper issuers.
Convertible Securities. Convertible securities are
fixed-income securities that may be converted at either a stated
price or stated rate into underlying shares of common stock.
Convertible securities have characteristics similar to both
fixed-income and equity securities.
Convertible securities generally are subordinated to other
similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common
stock, of the same issuer. Because of the subordination
feature,
however, convertible securities typically have lower ratings
than similar non-convertible securities.
Although to a lesser extent than with fixed-income
securities generally, the market value of convertible securities
tends to decline as interest rates increase and, conversely,
tends to increase as interest rates decline. In addition,
because of the conversion feature, the market
value of convertible securities tends to vary with fluctuations
in the market value of the underlying common stock. A unique
feature of convertible securities is that as the market price of
the underlying common stock declines, convertible securities
tend to trade increasingly on a yield basis, and so may not
experience market value declines to the
same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of
the
convertible securities tend to rise as a reflection of the value
of the underlying common stock. While no securities investments
are without risk, investments in convertible securities
generally
entail less risk than investments in common stock of the same
issuer.
As fixed-income securities, convertible securities are
investments that provide for a stable stream of income with
generally higher yields than common stocks. As with all
fixed-income securities, there can be no assurance of current
income because the issuers of the convertible
securities may default on their obligations. Convertible
securities, however, generally offer lower interest or dividend
yields than non-convertible securities of similar quality
because
of the potential for capital appreciation. A convertible
security, in addition to providing
fixed income, offers the potential for capital appreciation
through the conversion feature, which enables the holder to
benefit from increases in the market price of the underlying
common stock. There can be no assurance of capital
appreciation, however, because securities prices fluctuate.
Illiquid Securities. When purchasing securities that have
not been registered under the Securities Act of 1933, as
amended,
and are not readily marketable, each Fund will endeavor, to the
extent practicable, to obtain the right to registration at the
expense of the issuer. Generally, there will be a lapse of time
between the Fund's decision to sell any such
security and the registration of the security permitting sale.
During any such period, the price of the securities will be
subject to market fluctuations. However, where a substantial
market of qualified institutional buyers has developed for
certain unregistered securities purchased by the Fund pursuant
to
Rule 144A under the Securities Act of 1933, as amended, the Fund
intends to treat such securities as liquid securities in
accordance with procedures approved by the Company's Board.
Because it is not possible to predict with assurance how the
market for specific restricted securities sold pursuant to Rule
144A will develop, the Company's Board has directed the Manager
to monitor carefully the relevant 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, a Fund's investing in such
securities may have the effect of increasing the level of
illiquidity in its investment portfolio during such period.
Municipal Obligations. (Dreyfus Strategic Income Fund
only)
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. 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.
Mortgage-Related Securities. (Dreyfus Strategic Income
Fund only).
Government-Agency Securities--Mortgage-related securities
issued by the Government National Mortgage Association ("GNMA")
include GNMA Mortgage Pass-Through Certificates (also known as
"Ginnie Maes") which are guaranteed as to the timely payment of
principal and interest by GNMA and
such guarantee is backed by the full faith and credit of the
United States. GNMA is a wholly-owned U.S. Government
corporation within the Department of Housing and Urban
Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury
to make payments under its guarantee.
Government-Related Securities--Mortgage-related securities
issued by the Federal National Mortgage Association ("FNMA")
include FNMA Guaranteed Mortgage Pass-Through Certificates (also
known as "Fannie Maes") which are
solely the obligations of FNMA and are not backed by or entitled
to the full faith and credit of the United States. FNMA is a
government-sponsored organization owned entirely by private
stockholders. Fannie Maes are guaranteed as to timely payment
of principal and interest by FNMA.
Mortgage-related securities issued by the Federal Home Loan
Mortgage Corporation ("FHLMC") include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or
"PCs"). FHLMC is a corporate instrumentality of the United
States created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks. Freddie
Macs are not guaranteed by the United States or by any Federal
Home Loan Bank and do not constitute a debt or obligation of the
United States or of any Federal Home Loan Bank. Freddie Macs
entitle the holder to timely payment of interest, which is
guaranteed by FHLMC. FHLMC guarantees either ultimate
collection or timely payment of all principal payments on
the underlying mortgage loans. When FHLMC does not guarantee
timely payment of principal, FHLMC may remit the amount due on
account of its guarantee of ultimate payment of principal at any
time after default on an underlying mortgage, but in no event
later than one year after it becomes payable.
Zero Coupon Securities. (Dreyfus Strategic Income Fund
only) The Fund may invest in zero coupon U.S. Treasury
securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons
themselves and receipts or certificates representing interests
in such stripped debt obligations and coupons.
Zero coupon securities also are issued by corporations and
financial institutions which constitute a proportionate
ownership
of the issuer's pool of underlying U.S. Treasury securities. A
zero coupon security pays no interest to its holder during its
life and is sold at a discount to its
face value at maturity. The amount of the discount fluctuates
with the market price of the security. The market prices of
zero
coupon securities generally are more volatile than the market
prices of securities that pay interest periodically and are
likely to respond to a greater degree to changes in interest
rates than non-zero coupon securities having similar
maturities and credit qualities.
Management Policies
Leverage. (Dreyfus Strategic Income Fund only) For
borrowings for investment purposes, the Investment Company Act
of
1940, as amended (the "1940 Act"), requires the Fund to maintain
continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed. If the required
coverage should decline as a result of market fluctuations or
other reasons, the Fund may be required to sell some of its
portfolio securities within three days to reduce the amount of
its borrowings and restore the 300% asset coverage, even though
it may be disadvantageous from an investment standpoint to sell
securities at that time. The Fund also may be required
to maintain minimum average balances in connection with such
borrowing or pay a commitment or other fee to maintain a line of
credit; either of these requirements would increase the cost of
borrowing over the stated interest rate. To the extent the Fund
enters into a reverse repurchase agreement, the Fund will
maintain in a segregated custodial account cash
or U.S. Government securities or other high quality liquid debt
securities at least equal to the aggregate amount of its reverse
repurchase obligations, plus accrued interest, in certain cases,
in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange Commission
views reverse repurchase transactions as collateralized
borrowings by the Fund.
Short-Selling. In these transactions, a Fund sells a
security it does not own in anticipation of a decline in the
market value of the security. To complete the transaction, the
Fund must borrow the security to make delivery to the buyer.
The
Fund is obligated to replace the security borrowed by purchasing
it subsequently at the market price at the
time of replacement. A Fund will incur a loss if the price of
the security increases between the date of the short sale and
the
date on which the Fund replaces the borrowed security; it will
realize a gain if the security declines in price between those
dates.
Securities will not be sold short if, after effect is given
to any such short sale, the total market value of all securities
sold short would exceed 25% of the value of a Fund's net assets.
A Fund may not sell short the securities of any single issuer
listed on a national securities exchange to the extent of more
than 5% of the value of a Fund's net assets. A Fund may not
sell short the securities of any class of an
issuer if, as a result of such sale, the Fund would have sold
short in the aggregate more than 5% of the outstanding
securities of that class.
A Fund also may make short sales "against the box," in
which
the Fund enters into a short sale of a security it owns in order
to hedge an unrealized gain on the security. At no time will
more than 15% of the value of the Fund's net assets be in
deposits on short sales against the box.
Until a Fund closes its short position or replaces the
borrowed security, it will: (a) maintain a segregated account,
containing cash or U.S. Government securities, at such a level
that the amount deposited in the account plus the amount
deposited with the broker as collateral will
equal the current value of the security sold short; or (b)
otherwise cover its short position.
Lending Portfolio Securities. (Dreyfus Strategic Income
Fund only) 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 33-1/3% 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. The Fund might experience risk of loss
if
the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund. 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 for 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 dividends, interest or
other distributions payable on the loaned securities, and any
increase in market value; (5) the Fund may pay only reasonable
custodian fees in connection with the loan; and (6) while voting
rights on the loaned securities may pass to the borrower, the
Company's Board must terminate the loan and regain the right to
vote the securities if a material event adversely affecting the
investment occurs.
Derivatives. A Fund may invest in Derivatives (as defined
in the relevant 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 a 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.
In addition, 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 a Fund's performance.
If a 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. A 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.
Dreyfus Strategic Income 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 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. A Fund may enter into
futures contracts in U.S. domestic markets, such as the Chicago
Board of Trade and the International Monetary Market of the
Chicago Mercantile Exchange, or,
if permitted in its Prospectus, on exchanges located outside the
United States, such as the London International Financial
Futures
Exchange and the Sydney Futures Exchange Limited. Foreign
markets may offer advantages such as trading opportunities or
arbitrage possibilities not available in the United States.
Foreign markets, however, may have greater risk
potential than domestic markets. For example, some foreign
exchanges are principal markets so that no common clearing
facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits that a
Fund might realize in trading could be
eliminated by adverse changes in the exchange rate, or the Fund
could incur losses as a result of those changes. Transactions
on
foreign exchanges may include both commodities which are traded
on domestic exchanges and those which are not. Unlike trading
on domestic commodity exchanges, trading on foreign commodity
exchanges is not regulated by the Commodity Futures Trading
Commission.
Engaging in these transactions involves risk of loss to a
Fund which could adversely affect the value of the Fund's net
assets. Although each 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 a 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 a 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. A 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, a 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. A 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.
A Fund may purchase and sell currency futures. A foreign
currency future obligates the Fund to purchase or sell an amount
of a specific currency at a future date at a specific price.
Dreyfus Equity Dividend Fund may purchase and sell stock
index futures contracts. A stock index future obligates the
Fund
to pay or receive an amount of cash equal to a fixed dollar
amount specified in the futures contract multiplied by the
difference between the settlement price
of the contract on the contract's last trading day and the value
of the index based on the stock prices of the securities that
comprise it at the opening of trading in such securities on the
next business day.
Options--In General. A 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 a Fund is a call option
with respect to which a Fund owns the underlying security or
otherwise covers the transaction by segregating cash or other
securities. A put option written by a 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.
A 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.
Specific Options Transactions. A Fund may purchase and
sell call and put options on foreign currency. These options
convey the right to buy or sell the underlying currency at a
price which
is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
Dreyfus Equity Dividend Fund may purchase and sell call and
put options in respect of specific securities (or groups or
"baskets" of specific securities) or stock indices listed on
national securities exchanges or traded in the over-the-counter
market. An option on a stock index is similar to an option in
respect of specific securities, except that settlement does not
occur by delivery of the securities comprising
the index. Instead, the option holder receives an amount of
cash
if the closing level of the stock index upon which the option is
based is greater than, in the case of a call, or less than, in
the case of a put, the exercise price of the option. Thus, the
effectiveness of purchasing or writing stock index options will
depend upon price movements in the level
of the index rather than the price of a particular stock.
Dreyfus Equity Dividend Fund also may purchase cash-settled
options on equity index swaps in pursuit of its investment
objective. Equity index swaps involve the exchange by the Fund
with another party of cash flows based upon the performance of
an index or a portion of an index of
securities which usually includes dividends. A cash-settled
option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount
of cash equal to the value of the underlying swap as of the
exercise date. These options typically are purchased in
privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by a Fund of options will be subject to the
ability of the Manager to predict correctly movements in the
prices of individual stocks or the stock market generally. To
the extent such predictions are incorrect, a Fund may incur
losses.
Future Developments. A 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. A Fund may purchase securities on a
forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date
of the commitment to purchase. The payment obligation and the
interest rate that will be received on a
forward commitment or when-issued security are fixed at the time
the Fund enters into the commitment. However, a Fund does not
make a payment until it receives delivery from the other party
to
the transaction. A 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.
Securities purchased on a forward commitment or when-issued
basis are subject to changes in value (generally changing in the
same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes,
real or anticipated, in the level of interest
rates. Securities purchased on a forward commitment or
when-issued basis may expose a 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 a
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.
Investment Considerations and Risks
Lower Rated Securities. (Dreyfus Strategic Income Fund
only) Dreyfus Strategic Income Fund is permitted to invest in
securities rated as low as Caa by Moody's or CCC by S&P. Such
securities, though higher yielding, are characterized by risk.
See "Description of the Fund--Investment Considerations and
Risks--Lower Rated Securities" in Dreyfus Strategic
Income Fund's Prospectus for a discussion of certain risks and
the Appendix for a general description of the Rating Agencies'
ratings. Although ratings may be useful in evaluating the
safety
of interest and principal payments, they do not evaluate the
market value risk of these securities. The 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 securities tend to be more sensitive to economic
conditions
than are higher rated securities. These securities generally
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.
Companies that issue certain of these securities often are
highly leveraged and may not have available to them more
traditional methods of financing. Therefore, the risk
associated
with acquiring the securities of such issuers generally is
greater than is the case with the higher
rated securities. For example, during an economic downturn or a
sustained period of rising interest rates, highly leveraged
issuers of these securities may not have sufficient revenues to
meet their interest payment obligations. The issuer's ability
to
service its debt obligations also may be affected adversely by
specific corporate developments, forecasts,
or the unavailability of additional financing. The risk of loss
because of default by the issuer is significantly greater for
the
holders of these securities because such securities generally
are unsecured and often are subordinated to other creditors of
the issuer.
Because there is no established retail secondary market for
many of these securities, the Fund anticipates that such
securities could be sold only to a limited number of dealers or
institutional investors. To the extent a secondary trading
market for these securities does exist, it
generally is not as liquid as the secondary market for higher
rated securities. The lack of a liquid secondary market may
have
an adverse impact on market price and yield and the 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 its net asset value. Adverse
publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of
these securities. In such cases, judgment may
play a greater role in valuation because less reliable,
objective data may be available.
These securities may be particularly susceptible to
economic downturns. It is likely that 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 for
such securities.
A Fund may acquire these securities during an initial
offering. Such securities may involve special risks because
they
are new issues. The Fund has no arrangement with any persons
concerning the acquisition of such securities, and the Manager
will review carefully the credit and other characteristics
pertinent to such new issues.
Investment Restrictions
Dreyfus Equity Dividend Fund only. The Fund has adopted
investment restrictions numbered 1 through 10 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 11 through 16 are not fundamental policies
and may be changed by vote of a majority of the Company's Board
members 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, or its agencies or
instrumentalities may be purchased, without regard to any such
limitation.
2. Hold more than 10% of the outstanding 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 the value of its total assets
in the securities of issuers in any single industry, provided
that there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
4. Invest in commodities, except that the Fund may
purchase and sell options, forward contracts, futures contracts,
including those related to indices, and options on futures
contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or
other mineral leases or exploration or development programs, but
the Fund may purchase and sell securities that are secured by
real estate or issued by companies that invest or deal in real
estate or real estate investment trusts.
6. Borrow money, except to the extent permitted under the
1940 Act (which currently limits borrowing to no more than
33-1/3% of the value of the 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.
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 Company's Board.
8. Act as an underwriter of securities of other issuers,
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.
9. Issue any senior security (as such term is defined in
Section 18(f) of the 1940 Act), except to the extent the
activities permitted in Investment Restriction Nos. 4, 6, 13 and
14 may be deemed to give rise to a senior security.
10. Purchase securities on margin, but the Fund may make
margin deposits in connection with transactions in options,
forward contracts, futures contracts, and options on futures
contracts.
11. Purchase securities of any company having less than
three years' continuous operations (including operations of any
predecessor) if such purchase would cause the value of the
Fund's
investments in all such companies to exceed 5% of the value of
its total assets.
12. Invest in the securities of a company for the purpose
of exercising management or control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in
accordance with its views.
13. Pledge, mortgage or hypothecate its assets, except to
the extent necessary to secure permitted borrowings and to the
extent related to the purchase of securities on a when-issued or
forward commitment basis and the deposit of assets in escrow in
connection with writing covered put and call options and
collateral and initial or variation margin arrangements
with respect to options, forward contracts, futures contracts,
and options on futures contracts.
14. Purchase, sell or write puts, calls or combinations
thereof, except as described in the relevant Fund's Prospectus
and Statement of Additional Information.
15. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
15% of the value of the Fund's net assets would be so invested.
16. Purchase securities of other investment companies,
except to the extent permitted under the 1940 Act.
Dreyfus Strategic Income Fund only. The Fund has adopted
investment restrictions numbered 1 through 14 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 restriction number 15 is
not a fundamental policy and may be changed by
vote of a majority of the Company's Board members at any time.
The Fund may not:
1. Purchase the securities of any issuer (other than a
bank) if such purchase would cause more than 5% of the value of
its total assets to be invested in securities of such issuer, or
invest more than 15% of its assets in the obligations of any one
bank, 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 or its agencies or
instrumentalities may be purchased, without regard to such
limitations. Notwithstanding the foregoing, based on rules of
the Securities and Exchange Commission, the
Fund will not invest more than 5% of its assets in the
obligations of any one bank, except as otherwise provided in
such rules.
2. Purchase the securities of any issuer if such purchase
would cause the Fund to hold more than 10% of the outstanding
voting securities of such issuer. This restriction applies only
with respect to 75% of the Fund's assets.
3. Purchase securities of any company having less than
three years' continuous operations (including operations of any
predecessors) if such purchase would cause the value of the
Fund's investments in all such companies to exceed 5% of the
value of its total assets.
4. Purchase securities of closed-end investment companies
except (a) in the open market where no commission except the
ordinary broker's commission is paid, which purchases are
limited
to a maximum of (i) 3% of the total voting stock of any one
closed-end investment company, (ii) 5%
of its net assets with respect to any one closed-end investment
company and (iii) 10% of its net assets in the aggregate, or (b)
those received as part of a merger or consolidation. The Fund
may not purchase the securities of open-end investment companies
other than itself.
5. Purchase or retain the securities of any issuer if the
officers, Trustees or Directors of the Fund or the Manager
individually own beneficially more than 1/2 of 1% of the
securities of such issuer or together own beneficially more than
5% of the securities of such issuer.
6. Purchase, hold or deal in real estate, or oil and gas
interests, but the Fund may purchase and sell securities that
are
secured by real estate and may purchase and sell securities
issued by companies that invest or deal in real estate.
7. Invest in commodities, except that the Fund may
purchase
and sell futures contracts, including those relating to indices,
and options on futures contracts or indices.
8. 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, futures
contracts, including those relating to indices, and options on
futures contracts or indices shall not constitute
borrowing.
9. Pledge, mortgage or hypothecate 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 writing covered put and call options and the purchase of
securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements
with respect to options, futures contracts, including those
relating to indices and options on futures contracts or indices.
10. Make loans to others except through the purchase of
debt obligations or 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 Trustees.
11. Act as an underwriter of securities of other issuers
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.
12. Invest in the securities of a company for the purpose
of exercising management or control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in
accordance with its views.
13. Purchase, sell or write puts, calls or combinations
thereof, except as described in the Fund's Prospectus and this
Statement of Additional Information.
14. Invest more than 25% of its assets in investments in
any particular industry or industries (including banking),
provided that, when the Fund has adopted a temporary defensive
posture, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
15. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
15% of the value of the Fund's net assets would be so invested.
While not fundamental policies, Dreyfus Strategic Income
Fund has undertaken, so as to permit the sale of Fund shares in
certain states, not
to invest in oil, gas and other mineral leases or in real estate
limited partnerships, and to treat securities of foreign issuers
which are not listed on a recognized domestic or foreign
exchange and for which a bona
fide market does not exist at the time of purchase or subsequent
valuation as not readily marketable.
If a percentage restriction is adhered to at the time of
investment, a later change in percentage resulting from a change
in values or assets will not constitute a violation of
such restriction.
Each Fund may invest, notwithstanding any other investment
restriction (whether or not fundamental), all of its assets in
the securities of a single open-end management investment
company
with substantially the same fundamental investment objective,
policies and restrictions as the Fund.
The Company may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund
shares
in certain states. Should the Company determine that a
commitment is no longer in the best interest of the Fund and its
shareholders, the Company reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the
state involved.
MANAGEMENT OF THE COMPANY
Trustees and officers of the Company, together with
information as to their principal business occupations during at
least the last five years, are shown below. Each Trustee who is
deemed to be an "interested person"
of the Company, as defined in the 1940 Act, is indicated by an
asterisk.
Trustees of the Company
*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 Company's
distributor. From August 1994 until December 31, 1994, he was a
director of Mellon Bank Corporation. He is also Chairman of the
Board of Directors 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 Company, 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, Simmons Outdoor Corporation and Staffing Resources,
Inc. He is 52 years old and his address is 200 Park Avenue, New
York, New York 10166.
*DAVID W. BURKE, Trustee. Since August 1994, Consultant to the
Manager. 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 59 years old and his address is 200 Park Avenue,
New York, New York 10166.
ROSALIND GERSTEN JACOBS, Trustee. Director of Merchandise and
Marketing for Corporate Property Investors, a real estate
investment company. From 1974 to 1976, she was owner and
manager
of a merchandise and marketing consulting firm. Prior to 1974,
she was a Vice President of Macy's, New
York. Mrs. Jacobs is 70 years old and her address is c/o
Corporate Property Investors, 305 East 47th Street, New York,
New York 10017.
DIANE DUNST, Trustee. Since January 1992, President of Diane
Dunst Promotion, Inc., a full service promotion agency.
From January 1989 to January 1992, Director of Promotion
Services, Lear's Magazine. From 1985 to January 1989, she was
Sales Promotion Manager of Elle Magazine. Ms. Dunst is 55 years
old and her address is 120 East 87th Street, New York, New York
10128.
JAY I. MELTZER, Trustee. Physician engaged in private practice
specializing in internal medicine. He is also a member of the
Advisory Board of the Section of Society and Medicine, College
of
Physicians and Surgeons, Columbia University and a Clinical
Professor of Medicine, Department of Medicine, Columbia
University College of Physicians and Surgeons. He is 67 years
old and his address is 903 Park Avenue, New York, New York
10021.
DANIEL ROSE, Trustee. President and Chief Executive Officer of
Rose Associates, Inc., a New York based real estate development
and management firm. In July 1994, Mr. Rose received a
Presidential appointment to serve as a Director of the
Baltic-American Enterprise Fund, which will make
equity investments and loans and provide technical business
assistance to new business concerns in the Baltic states. He is
also Chairman of the Housing Committee of the Real Estate Board
of New York, Inc., and a Trustee of Corporate Property
Investors,
a real estate investment company. He is 66 years old and his
address is c/o Rose Associates, Inc., 380 Madison Avenue,
New York, New York 10017.
WARREN B. RUDMAN, Trustee. Since January 1993, Partner in the
law firm Paul, Weiss, Rifkin, Wharton & Garrison. From January
1981 to January 1993, Mr. Rudman served as a United States
Senator from the State of New Hampshire. Since May 1995, Mr.
Rudman has served as director of Collins & Aikman Corporation.
Also, since January 1993, Mr. Rudman has served as a
director of Chubb Corporation and of the Raytheon Company. He
has served as Vice Chairman of the President's Foreign
Intelligence Advisory Board since January 1993. From January
1993 to December 1994, Mr. Rudman served as Chairman of the
Federal Reserve Bank of Boston. Since 1988, Mr. Rudman
has served as a trustee of Boston College and since 1986 as a
member of the Senior Advisory Board of the Institute of Politics
of the Kennedy School of Government at Harvard University. He
is
65 years old and his address is c/o Paul, Weiss, Rifkind,
Wharton & Garrison, 1615 L Street, N.W., Suite 1300, Washington,
D.C. 20036.
SANDER VANOCUR, Trustee. Since January 1994, Mr. Vanocur has
served as Visiting Professional Scholar at the Freedom Forum
First Amendment Center at Vanderbilt University. Since January
1992, Mr. Vanocur has been the President of Old Owl
Communications, a full-service communications firm
and, since November 1989, he has served as a Director of the
Damon Runyon-Walter Winchell Cancer Research Fund. From June
1986 to December 1991, he was a Senior Correspondent of ABC News
and, from October 1986 to December 1991, he was Anchor of the
ABC
News program "Business World," a weekly business program on the
ABC television network. Mr. Vanocur joined ABC
News in 1977. He is 67 years old and his address is 2928 P
Street, N.W., Washington, D.C. 20007.
For so long as the Company's plan described in the section
captioned "Shareholder Services Plan" remains in effect, the
Board members who are not "interested persons" of the Company,
as
defined in the 1940 Act, will be selected and nominated by the
Board members who are not "interested persons" of the Company.
The Company 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
Company for the fiscal year ended October 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, 1995, were as
follows:
<TABLE>
<CAPTION>
(5)
(3) Total Compensation
(2) Pension or (4) From Company and
(1) Aggregate Retirement Benefits Estimated Annual Fund Complex
Name of Board Compensation Accrued as Part of Benefits Upon Paid to Board
Member From Company* Company's Expenses Retirement Member
<S> <C> <C> <C> <C>
Joseph S. DiMartino $3,528** none none $445,000(94)
David W. Burke $3,750 none none $ 27,898(52)
Rosalind Gersten
Jacobs $3,750 none none $ 57,638(20)
Diane Dunst $3,750 none none $ 32,602(9)
Jay I. Meltzer $3,500 none none $ 32,102(9)
Daniel Rose $3,750 none none $ 62,006(22)
Warren B. Rudman $3,750 none none $ 29,602(17)
Sander Vanocur $3,750 none none $ 62,006(22)
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $396 for all Board members as a
group.
** Amount for the period from February 8, 1995 (date Mr. DiMartino was elected to the Board) to October 31, 1995.
</TABLE>
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Executive 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 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 31 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary.
Assistant Vice President of the Distributor and an officer of
other investment companies advised or administered by
the Manager. She is 26 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.
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.
MARGARET M. PARDO, Assistant Secretary. Legal Assistant with
the
Distributor and an officer of other investment companies advised
or administered by the Manager. From June 1992 to April 1995,
she was a Medical Coordination Officer at ORBIS International.
Prior to June 1992, she worked as Program Coordinator at
Physicians World Communications Group. She is 27 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 33 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.
The address of each officer of the Company is 200 Park
Avenue, New York, New York 10166.
The Company's Board members and officers, as a group,
owned less than 1% of each Fund's voting securities outstanding
on December 1, 1995.
MANAGEMENT AGREEMENT
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ
IN CONJUNCTION WITH THE SECTION IN EACH FUND'S PROSPECTUS
ENTITLED "MANAGEMENT OF THE FUND."
Management Agreement. The Manager provides management
services pursuant to the Management Agreement (the "Agreement")
dated August 24, 1994, as amended December 6, 1995, with the
Company. As to each Fund, the Agreement is subject to annual
approval by (i) the Company's Board or (ii) vote of a majority
(as defined in the 1940 Act) of the outstanding voting
securities
of such Fund, provided that in either event the continuance also
is approved by a majority of the Board members who are not
"interested persons" (as defined
in the 1940 Act) of the Company 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 3, 1994 in respect of Dreyfus Strategic Income Fund,
and was last approved by the Company's Board, including a
majority of the Board members who are not "interested
persons" of any party to the Agreement, at a meeting held on
December 6, 1995. As to each
Fund, the Agreement is terminable without penalty, on 60 days'
notice, by the Company's Board or by vote of the holders of a
majority of such Fund's shares, or, on not less than 90
days' notice, by the Manager. The Agreement will terminate
automatically, as to the relevant Fund, 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; Christopher M. Condron, 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; Philip L. Toia, Vice
Chairman --Operations and Administration and a director; Barbara
E. Casey, Vice President--Dreyfus 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; Andrew S. Wasser, Vice President--Information
Services; 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 each Fund's investments in accordance
with the stated policies of such Fund, subject to the approval
of
the Company's Board. The Manager is responsible for investment
decisions, and provides a Funds with portfolio managers who are
authorized by the Board to execute purchases and sales of
securities. Dreyfus Equity Dividend Fund's portfolio managers
are Timothy M. Ghriskey and Donald Geogerian. Dreyfus Strategic
Income Fund's portfolio manager is Kevin McClintock. The
Manager also maintains a research department with a professional
staff of
portfolio managers and securities analysts who provide research
services for a Fund as well as for other funds advised by the
Manager. All purchases and sales are reported for the Board's
review at the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the
Funds, and furnishes statistical and research data, clerical
help, accounting, data processing, bookkeeping and
internal auditing and certain other required services to the
Funds. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from
time to time deems appropriate.
Expenses. All expenses incurred in the operation of the
Company are borne by the Company, except to the extent
specifically assumed by the Manager. The expenses borne by
the Company include: organizational costs, taxes, interest,
loan
commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees
of Board members who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of
the Manager or any of its affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses,
costs of maintaining the Company's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes
and for distribution to existing shareholders, costs of
shareholders' reports and meetings, and
any extraordinary expenses. Expenses attributable to a
particular Fund are charged against
the assets of that Fund; other expenses of the Company are
allocated among the Funds on the
basis determined by the Board, including, but not limited to,
proportionately in relation to the net assets of each Fund.
As compensation for the Manager's services to the Company,
the Company has agreed to pay the Manager a monthly management
fee at the annual rate of .75 of 1% of the value of Dreyfus
Equity Dividend Fund's average daily net assets and .60 of 1% of
the value of Dreyfus Strategic Income Fund's average daily net
assets. For the fiscal years ended October 31, 1993, 1994 and
1995, the management fees paid by the Company for Dreyfus
Strategic Income Fund were $1,536,141, $2,157,631 and
$1,898,849,
respectively; however, the fees for fiscal 1993 were reduced by
$213,144, resulting in a net fee paid for Dreyfus
Strategic Income Fund of $1,322,997 in fiscal 1993, pursuant to
various undertakings in effect.
As to each Fund, 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 the expense limitation
of any state having jurisdiction over the Fund, 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 daily, and reconciled and effected or paid, as
the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not
subject to reduction as the value of a Fund's net assets
increases.
PURCHASE OF SHARES
The following information supplements and should be read
in conjunction with the section in each Fund's Prospectus
entitled "How to Buy Shares."
The Distributor. The Distributor serves as each Fund's
distributor on a best efforts
basis pursuant to an agreement which is renewable annually. The
Distributor also acts as distributor for the other funds in the
Dreyfus Family of Funds and for certain other investment
companies. In some states, certain financial 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
Dreyfus Transfer, Inc., each 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 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
Shares--Dreyfus TeleTransfer Privilege."
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.
SHAREHOLDER SERVICES PLAN
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ
IN CONJUNCTION WITH THE SECTION IN EACH FUND'S PROSPECTUS
ENTITLED "SHAREHOLDER SERVICES PLAN."
The Company has adopted a Shareholder Services Plan,
pursuant to which the Company pays the Distributor for the
provision of certain services to each Fund's
shareholders. The services provided may include personal
services relating to shareholder
accounts, such as answering shareholder inquiries regarding the
Company and providing reports and other information, and
services related to the maintenance of such shareholder
accounts. Under the Shareholder Services Plan, the Distributor
may make payments to
certain securities dealers, financial institutions and other
financial industry professionals
(collectively, "Service Agents") in respect of these services.
A quarterly report of the amounts expended under the
Shareholder Services Plan, and
the purposes for which such expenditures were incurred, must be
made to the Board members for their review. In addition, the
Shareholder Services Plan provides that it may be
amended only with the approval of the Board members, and by the
Board members who are neither "interested persons" (as defined
in the 1940 Act) of the Company nor have any direct
or indirect financial interest in the operation of the
Shareholder Services Plan or in any
agreements entered into in connection with the Shareholder
Services Plan, by vote cast in
person at a meeting called for the purpose of considering such
amendments. As to each Fund, the Shareholder Services Plan is
subject to annual approval by such vote of the Board
members cast in person at a meeting called for the purpose of
voting on the Shareholder Services Plan. The Shareholder
Services Plan is terminable with respect to each Fund at any
time by vote of a majority of the Board members who are not
"interested persons" and who
have no direct or indirect financial interest in the operation
of the Shareholder Services Plan
or in any agreements entered into in connection with the
Shareholder Services Plan.
For the period from July 19, 1995 (effective date of
Shareholder Services Plan) through October 31, 1995, $217,598
was charged the Company with respect to Dreyfus
Strategic Income Fund pursuant to the Shareholder Services Plan.
Prior Service Plan. As of July 19, 1995, the Company
terminated its then-existing Service Plan with respect to
Dreyfus
Strategic Income Fund. That Service Plan, adopted
pursuant to Rule 12b-1 under the 1940 Act, provided that the
Company (a) reimburse the
Distributor for payments to certain Service Agents for
distributing Dreyfus Strategic Income
Fund shares and servicing shareholder accounts ("Servicing") and
(b) pay the Manager, Dreyfus Service Corporation and any
affiliate of either of them for advertising or marketing
relating to Dreyfus Strategic Income Fund and for Servicing at
the aggregate annual rate of
.25% of the value of the Fund's average daily net assets. For
the period from November 1,
1994 through July 19, 1995, $580,600 was charged to the Company
with respect to Dreyfus
Strategic Income Fund pursuant to such plan, of which $496,033
was charged for advertising
or marketing, $77,557 was charged for distributing shares and
servicing, and $7,010 was
charged for preparing, printing and distributing prospectuses
and statements of additional information.
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"How to Redeem Shares."
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
Company 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 are 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 CodeAnswer 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 "Share Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware
that if they have 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
Shares--Dreyfus TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates
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 Company has committed itself to
pay in cash all redemption requests by any shareholder of record
of a Fund, limited in amount during any 90-day period to the
lesser of $250,000 or 1% of the value of such 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 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
securities are 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 relevant 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 EACH 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 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 funds purchased with a sales load, shares of
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,
share-holders
must notify the Transfer Agent of their prior ownership of fund
shares and their account number.
To request an exchange, shareholders 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 shareholders 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 exchange.
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 IRAs set up under a Simplified Employee
Pension Plan ("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 a personal retirement plan account, 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 a 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 the
investor's 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 Company
reserves the right to reject any exchange request in
whole or in part. The Fund Exchanges service or the 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.
Automatic
Withdrawal may be terminated at any time by the
investor, the Company or the Transfer Agent. Shares for which
certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from a 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.
Corporate Pension/Profit-Sharing and Retirement Plans.
The
Company makes available to corporations a variety of prototype
pension and profit-sharing plans including a
401(k) Salary Reduction Plan. In addition, the Company makes
available Keogh Plans, IRAs, including SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support
services also are available.
Investors who wish to purchase Fund shares in conjunction
with a Keogh Plan, a 403(b)(7) Plan or an IRA, including a
SEP-IRA, may request from the Distributor forms for adoption of
such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7)
Plans or IRAs may charge a fee, payment of which could require
the liquidation of shares. All fees charged are described
in the appropriate form.
Shares may be purchased in connection with these plans
only by direct remittance to the entity acting as custodian.
Purchases for these plans may not be made in advance of
receipt of funds.
The minimum initial investment for corporate plans, Salary
Reduction Plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, is $2,500 with no minimum
for subsequent purchases. The minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans
with only one participant, is ordinarily $750,
with no minimum for subsequent purchases. Individuals who open
an IRA also may open a non-working spousal IRA with a minimum
investment of $250.
Each investor should read the prototype retirement plan
and
the appropriate form of custodial agreement for further details
on eligibility, service fees and tax implications, and
should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ
IN CONJUNCTION WITH THE SECTION IN EACH FUND'S PROSPECTUS
ENTITLED "HOW TO BUY SHARES."
Valuation of Portfolio Securities. Substantially all of
each Fund's fixed-income investments (excluding short-term
investments) are valued each business day by one or more
independent pricing services (the "Service") approved by the
Board. Securities valued by the Service for which quoted bid
prices in the judgment of the Service are readily available and
are representative of the bid side of the market 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 valued by the Service
are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or
prices of securities of comparable quality, coupon, maturity and
type; indications as to values from dealers; and
general market conditions. Short-term investments are not
valued
by the Service and are valued at the mean price or yield
equivalent for such securities or for securities of
comparable maturity, quality and type as obtained from market
makers. Other investments that are not valued by the Service
(including the Equity Securities (as defined in the
Prospectus) purchased by Dreyfus Equity Dividend Fund) are
valued
at the last sales price for securities traded primarily on an
exchange or the national securities market or otherwise
at the average of the most recent bid and asked prices. Bid
price is used when no asked price is available. Any assets or
liabilities initially expressed in terms of foreign currency
will be translated into U.S. dollars at the midpoint of the New
York interbank market spot
exchange rate as quoted on the day of such translation by the
Federal Reserve Bank of New York or, if no such rate is quoted
on such date, at the exchange rate previously quoted by
the Federal Reserve Bank of New York or at such other quoted
market exchange rate as may be determined to be appropriate by
the Manager. Expenses and fees, including the
management fee (reduced by the expense limitation, if any), are
accrued daily and taken into account for the purpose of
determining the net asset value of a Fund's shares.
Restricted securities, as well as securities or other
assets for which recent market quotations are not readily
available, or are not valued by the Service, are valued at fair
value as determined in good faith by the Board. The Board will
review the method of valuation on a current basis. In making
their good faith valuation of restricted securities, the Board
members generally will take the following factors into
consideration: restricted securities
which are, or are convertible into, securities of the same class
of securities for which a public market exists usually will be
valued at market value less the same percentage discount
at which purchased. This discount will be revised periodically
by the Board if it believes that the discount no longer reflects
the value of the restricted securities. Restricted securities
not of the same class as securities for which a public market
exists usually will be valued
initially at cost. Any subsequent adjustment from cost will be
based upon considerations deemed relevant by the Board.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Dividends, Distributions and Taxes."
Management of the Company believes that Dreyfus Strategic
Income Fund has qualified for the fiscal year ended October 31,
1995 as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the
"Code").
It is expected that Dreyfus Equity Dividend Fund will qualify as
a regulated investment company under the Code. Each Fund
intends
to continue to so qualify if such qualification is in the best
interests of its shareholders. As a regulated investment
company, each Fund will pay no Federal income tax on net
investment income and net realized securities gains to the
extent
that such income and gains are distributed to shareholders in
accordance with applicable provisions of the Code. 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 the shares below the
cost of the investment. Such a
dividend or distribution would be a return of investment in an
economic sense, although taxable as stated above. In addition,
the Code provides that if a shareholder holds shares of
a Fund for six months or less and has received a capital gain
distribution with respect to such
shares, any loss incurred on the sale of such shares will be
treated as long-term capital loss
to the extent of the capital gain distribution received.
Depending upon the composition of a Fund's income, the
entire amount or a portion of the dividends paid by such Fund
from net investment income may qualify for the
dividends received deduction allowable to qualifying U.S.
corporate shareholders ("dividends
received deduction"). In general, dividend income of a Fund
distributed to qualifying corporate shareholders will be
eligible
for the dividends received deduction only to the extent
that such Fund's income consists of dividends paid by U.S.
corporations. However, Section
246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund
shares not held for more than 46 days and has received a
dividend
from net investment income with respect to such shares, the
portion designated by the Fund as qualifying for the
dividends received deduction will not be eligible for such
shareholder's dividends received
deduction. In addition, the Code provides other limitations
with
respect to the ability of a qualifying corporate shareholder to
claim the dividends received deduction in connection with
holding Fund shares. The Company anticipates that no dividend
paid by Dreyfus Strategic
Income Fund will qualify for the dividends-received deduction.
A Fund may qualify for and may make an election permitted
under Section 853 of the Code so that shareholders may be
eligible to claim a credit or deduction on their Federal
income tax returns for, and will be required to treat as part of
the amounts distributed to
them, their pro rata portion of qualified taxes paid or incurred
by the Fund to foreign countries (which taxes relate primarily
to investment income). A Fund may make an election
under Section 853 of the Code, provided that more than 50% of
the
value of the Fund's total assets at the close of the taxable
year consists of securities in foreign corporations, and the
Fund satisfies the applicable distribution provisions of the
Code. The foreign tax credit
available to shareholders is subject to certain limitations
imposed by the Code.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as
capital gains and losses. However, a portion of the gain or
loss
realized from the disposition of foreign currencies (including
foreign currency denominated bank deposits) and non-U.S.
dollar denominated securities (including debt instruments and
certain forward contracts and
options) may be treated as ordinary income or loss under Section
988 of the Code. In addition, all or a portion of any 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.
Finally, all or a portion of the gain realized from engaging in
"conversion transactions" may
be treated as ordinary income under Section 1258 of the Code.
"Conversion transactions" are defined to include certain
forward,
futures, option and straddle transactions, transactions
marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss realized
by a Fund from certain forward contracts 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 contracts and options as well as from closing
transactions. In addition, any such
contracts or options remaining unexercised at the end of a
Fund's
taxable year will be treated as sold for their then fair market
value, resulting in additional gain or loss to such Fund
characterized in the manner described above.
Offsetting positions held by a Fund involving certain
foreign currency forward contracts or options may 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 Sections 1256 and 988 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 a Fund were treated as entering into "straddles" by
reason of its engaging in certain
forward contracts or options transactions, such "straddles"
would be characterized as "mixed
straddles" if the forward contracts or options transactions
comprising a part of such "straddles" were governed by Section
1256 of the Code. A Fund may make one or more
elections with respect to "mixed straddles." Depending on which
election is made, if any,
the results to a Fund may differ. If no election is made, to
the
extent the "straddle" and conversion transaction rules apply to
positions established by a Fund, losses realized by a
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 loss on
"straddle" positions may be recharacterized as long-term capital
loss, and long-term capital
gains may be treated as short-term capital gains or ordinary
income.
Investment by a Fund in securities issued or acquired at a
discount, or providing for deferred interest or for payment of
interest in the form of additional obligations could under
special tax rules affect the amount, timing and character of
distributions to shareholders by
causing a Fund to recognize income prior to the receipt of cash
payments. For example, a Fund could be required to accrue a
portion of the discount (or deemed discount) at which the
securities were issued each year and to distribute such income
in
order to maintain its qualification as a regulated investment
company. In such case, a 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.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing
orders
on behalf of the Company for the purchase or sale of portfolio
securities. Allocation of brokerage transactions, including
their frequency, is made in the best judgment of the Manager and
in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most
favorable net price. Subject to this consideration, the brokers
selected will include those that supplement the Manager's
research facilities with statistical
data, investment information, economic facts and opinions.
Information so received is in addition to and not in lieu of
services required to be performed by the Manager and the
Manager's fees are not reduced as a consequence of the receipt
of
such supplemental information. Such information may be useful
to
the Manager in serving both the Company and other funds which it
advises and, conversely, supplemental information obtained by
the
placement of business of other clients may be useful to the
Manager in carrying out its obligations to the Company.
Sales of Fund shares by a broker may be taken into
consideration, and brokers also will be selected because of
their
ability to handle special executions such as are involved in
large block trades or broad distributions, provided the primary
consideration is met. Large block trades may, in certain cases,
result from two or more funds advised or administered by
the Manager being engaged simultaneously in the purchase or sale
of the same security.
Certain of a Fund's transactions in securities of foreign
issuers
may not benefit from the negotiated commission rates available
to a Fund for transactions in securities of domestic
issuers. When transactions are executed in the over-the-counter
market, each Fund will deal with the primary market makers
unless a more favorable price or execution otherwise is
obtainable. Foreign exchange transactions are made with banks
or
institutions in the interbank market at prices reflecting a
mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as
within a year. In periods in which extraordinary market
conditions prevail, the Manager will not be deterred from
changing a Fund's investment strategy as rapidly as needed, in
which case higher turnover rates can be anticipated which would
result in greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by the
Manager based upon its knowledge of available information as to
the general level of commissions paid by other
institutional investors for comparable services.
For the fiscal years ended October 31, 1993 and 1995, no
brokerage commissions were paid by Dreyfus Strategic Income
Fund. For the fiscal year ended October 31, 1994,
Dreyfus Strategic Income Fund paid $25,618 in brokerage
commissions. Gross spreads and
concessions on principal transactions, where determinable,
amounted to $629,615, $664,750 and $633,150 for the fiscal years
ended October 31, 1993, 1994 and 1995, respectively, none
of which was paid to the Distributor.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Performance Information."
Dreyfus Equity Dividend Fund had not commenced operations
as of the date hereof. Accordingly, no performance information
is available for such Fund.
Dreyfus Strategic Income Fund's current yield for the
30-day period ended October 31, 1995 was 5.96%. Current yield
for a Fund 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.
Dreyfus Strategic Income Fund's average annual return for
the one, five and 9.079 year periods ended October 31, 1995 was
17.57%, 11.42% and 9.90%, 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.
Dreyfus Strategic Income Fund's total return for the
period
October 1, 1986 (commencement of operations) through October 31,
1995 was 135.61%. Total return for a
Fund 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, advertising materials for each Fund may
include biographical information relating to its portfolio
manager, and may refer to or include commentary by the
Fund's portfolio manager relating to investment strategy, asset
growth, current or past
business, political, economic or financial conditions and other
matters of general interest to
investors. In addition, from time to time, advertising
materials
for each Fund may include information concerning retirement and
investing for retirement, may refer to the approximate
number of then-current Fund shareholders and may refer to Lipper
or Morningstar ratings and related analysis supporting the
ratings.
From time to time, the Company may compare each Fund's
performance against inflation with the performance of other
instruments against inflation, such as short-term
Treasury Bills (which are direct obligations of the U.S.
Government) and FDIC-insured bank money market accounts.
INFORMATION ABOUT THE FUNDS
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN EACH 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.
Rule 18f-2 under the 1940 Act provides that any matter
required to be submitted under the provisions of the 1940 Act or
applicable state law or otherwise to the holders of
the outstanding voting securities of an investment company, such
as the Company, will not be deemed to have been effectively
acted upon unless approved by the holders of a majority
of the outstanding shares of each series affected by such
matter. Rule 18f-2 further provides
that a series shall be deemed to be affected by a matter unless
it is clear that the interests of
each series in the matter are identical or that the matter does
not affect any interest of such
series. However, the Rule exempts the selection of independent
accountants and the election
of Board members from the separate voting requirements of the
Rule.
Each Fund will send annual and semi-annual financial
statements to all its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, P.O. Box 9671, Providence, Rhode Island 02903-9671, is
the Company's transfer and dividend disbursing
agent. Under a transfer agency agreement with the Company,
Dreyfus Transfer, Inc. arranges for the maintenance of
shareholder account records for the Fund, the handling of
certain communications between shareholders and the Fund, and
the
payment of dividends and distributions payable by the Fund. For
these services, Dreyfus Transfer, Inc. receives a
monthly fee computed on the basis of the number of shareholder
accounts during the month, and is reimbursed for certain
out-of-pocket expenses. The Bank of New York, 90
Washington Street, New York, New York 10286, is the Company's
custodian. Neither Dreyfus Transfer, Inc. nor The Bank of New
York has any part in determining the
investment policies of each Fund or which securities are to be
purchased or sold by a Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Company, has rendered its
opinion as to certain legal matters regarding the
due authorization and valid issuance of the shares being sold
pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Company.
<PAGE>
APPENDIX
Description of S&P, Moody's, Fitch and Duff ratings:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA
Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the highest rated issues
only in small degree.
A
Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to
the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate
capacity to pay interest and repay principal. Whereas they
normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead to a weakened
capacity to pay interest and repay principal for bonds in this
category than for bonds in higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to
default than other speculative grade debt. However, they face
major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payments.
B
Bonds rated B have a greater vulnerability to default but
presently have the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions would likely impair capacity or willingness to pay
interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability
to default and are dependent upon favorable business, financial
and economic conditions to meet timely payments of
interest and repayment of principal. In the event of adverse
business, financial or economic
conditions, they are not likely to have the capacity to pay
interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC 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.
S&P's letter ratings may be modified by the addition of a
plus (+) or a minus (-) sign designation, which is used to show
relative standing within the major rating categories,
except in the AAA (Prime Grade) category.
Commercial Paper Rating
An S&P commercial paper rating is a current assessment of
the likelihood of timely payment of debt having an original
maturity of no more than 365 days. Issues assigned an A
rating are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the
numbers
1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates 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 (+)
designation.
A-2
Capacity for timely payment on issues with this
designation
is strong. However, the relative degree of safety is not as
high as for issues designated A-1.
A-3
Issues carrying this designation have a satisfactory
capacity for timely payment. They are, however, somewhat more
vulnerable to the adverse effects of changes in circumstances
than obligations carrying the higher designations.
B
Issues carrying this designation are regarded as having
only speculative capacity for timely payment.
C
This designation is assigned to short-term obligations
with doubtful capacity for payment.
D
Issues carrying this designation are in default, and
payment of interest and/or repayment of principal is in arrears.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
generally are 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.
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
range of financial markets and assured sources of alternate
liquidity.
Issuers (or related supporting institutions) rated Prime-2
(P-2) have a strong capacity for repayment of short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3
(P-3) have an acceptable capacity for repayment of short-term
promissory obligations. The effect of industry
characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the
requirements for relatively high financial leverage. Adequate
alternate liquidity is maintained.
Issuers (or related supporting institutions) rated Not
Prime do not fall within any of the Prime rating categories.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations
of a specific debt issue or class of debt. The ratings take
into
consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition
and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect
the issuer's future financial strength and credit
quality.
AAA
Bonds rated AAA are considered to be investment grade and
of the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal,
which is unlikely to be affected by reasonably foreseeable
events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not
quite as strong as bonds rated AAA. Because bonds rated in the
AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be
more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and
of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse
impact
on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's
ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business
and financial alternatives can be identified which could assist
the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics,
which, if not remedied, may lead to default. The ability to
meet obligations requires an advantageous business and
economic environment.
CC
Bonds rated CC are minimally protected. Default in
payment of interest and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of
interest or principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual default of
interest
and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the
obligor. DDD represents the
highest potential for recovery on these bonds and D represents
the lowest potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category. Plus and minus signs, however, are not used
in the AAA category covering 12-36 months.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of
deposit, medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to
meet the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely
payment only slightly less in degree than issues rated F-1+.
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.
F-3
Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that
the degree of assurance for timely payment is adequate; however,
near-term adverse changes could cause these securities to be
rated below investment grade.
F-S
Weak Credit Quality. Issues assigned this rating have
characteristics suggesting a minimal degree of assurance for
timely payment and are vulnerable to near-term adverse
changes in financial and economic conditions.
D
Default. Issues assigned this rating are in actual or
imminent payment default.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality.
The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
A
Bonds rated A have protection factors which are average
but adequate. However, risk factors are more variable and
greater in periods of economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still
considered sufficient for prudent investment. There may be
considerable variability in risk
for bonds in this category during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed
by Duff as likely to meet obligations when due. Present or
prospective financial protection factors fluctuate according
to industry conditions or company fortunes. Overall quality may
move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the
risk that obligations will not be met when due. Financial
protection factors will fluctuate widely according to
economic cycles, industry conditions and/or company fortunes.
Potential exists for frequent
changes in quality rating within this category or into a higher
or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade
securities.
Such bonds may be in default or have considerable uncertainty as
to timely payment of interest, preferred dividends
and/or principal. Protection factors are narrow and risk can be
substantial with unfavorable
economic or industry conditions and/or with unfavorable company
developments.
DD
Defaulted debt obligations. Issuer has failed to meet
scheduled principal and/or interest payments.
Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit
within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent
liquidity factors which are supported by ample asset protection.
Risk factors are minor.
Paper rated Duff-2 is regarded as having good certainty of
timely
payment, good access to capital markets and sound liquidity
factors and company fundamentals. Risk factors are
small. Paper rated Duff 3 is regarded as having satisfactory
liquidity and other protection
factors. Risk factors are larger and subject to more variation.
Nevertheless, timely payment
is expected. Paper rated Duff 4 is regarded as having
speculative investment characteristics.
Liquidity is not sufficient to insure against disruption in debt
service. Operating factors and
market access may be subject to a high degree of variation.
Paper rated Duff 5 is in default.
The issuer has failed to meet scheduled principal and/or
interest payments.
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
Statement of Investments
October 31, 1995
<TABLE>
<CAPTION>
Principal
Bonds and Notes--97.7% Amount Value
- --------------------- --------- -------
<S> <C> <C>
Banking--19.7% ABN AMRO Bank N.V.,
Sub. Notes, 7 1/4%, 2005........................ $ 4,000,000 $ 4,159,772
Bank of New York,
Sub. Notes, 8 1/2%, 2004........................ 5,000,000 5,627,670
BankAmerica, Sub. Notes:
9.70%, 2000..................................... 5,000,000 5,689,685
6 3/4%, 2005.................................... 5,000,000 4,987,500
Chemical Banking,
Sub. Deb., 7 7/8%, 2006......................... 15,000,000 16,277,100
First Chicago,
Sub. Notes, 11 1/4%, 2001....................... 3,500,000 4,242,774
Fleet Financial Group,
Sub. Notes, 8 1/8%, 2004........................ 6,000,000 6,537,636
Manufacturers and Traders Trust,
Sub. Notes, 7%, 2005............................ 4,000,000 4,052,268
Midland Bank plc,
Sub. Notes, 8 5/8%, 2004........................ 5,000,000 5,604,815
NCNB,
Sub. Notes, 9 3/8%, 2009........................ 5,000,000 6,014,395
----------
63,193,615
----------
Consumer--7.4% News America Holdings (Gtd. by News):
Sr. Deb., 9 1/4%, 2013.......................... 5,000,000 5,812,400
Sr. Notes, 8 1/2%, 2005......................... 5,000,000 5,492,705
Time Warner Entertainment, L.P.,
Sr. Deb., 8 3/8%, 2023.......................... 12,000,000 12,429,768
----------
23,734,873
----------
Finance--24.2% Associates Corp. of North America:
Medium-Term Sr. Notes,
Ser. G, 8 1/4%, 2004.......................... 5,000,000 5,521,820
Sr. Notes, 7 7/8%, 2001......................... 5,000,000 5,366,215
Avco Financial Services,
Sr. Notes, 6.35%, 2000.......................... 3,000,000 3,003,264
Commercial Credit:
Deb., 10%, 2009................................. 1,000,000 1,274,215
Notes, 7 3/4%, 2005............................. 4,000,000 4,293,116
Dean Witter, Discover & Co.,
Floating Rate Notes, 6 1/4% 2000................ 2,000,000(a) 2,023,846
Dresdner Bank AG,
Sub. Notes, 6 5/8%, 2005........................ 4,000,000 4,016,088
Ford Motor Credit:
Medium-Term Notes, 9.03%, 2009.................. 5,000,000 5,717,195
Notes:
6 1/4%, 2000.................................. 5,000,000 4,975,000
7 3/4%, 2005.................................. 6,000,000 6,427,848
General Electric Capital:
Deb., 8 1/2%, 2008.............................. 4,000,000 4,635,560
Global Medium-Term Notes,
Ser. A, 7.84%, 1997........................... 3,000,000 3,071,022
</TABLE>
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
- ----------------
Statement of Investments (continued)
October 31, 1995
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- --------------------------- ----------- -------
<S> <C> <C>
Finance (continued) General Motors Acceptance:
Medium-Term Notes:
7 1/2%, 5/23/2000................................. $ 5,000,000 $ 5,219,750
7 1/2%, 7/24/2000................................. 5,000,000 5,224,795
Notes, 8 3/4%, 1997................................. 3,000,000(b) 3,430,713
Household Finance,
Notes, 7.65%, 2007.................................. 5,000,000 5,350,335
McDonnell Douglas Finance,
Medium-Term Notes, 9.90%, 2000...................... 2,000,000 2,103,390
U.S. Leasing International,
Medium-Term Notes, Ser. A, 9.88%, 2001.............. 5,000,000 5,756,250
------------
77,410,422
------------
Industrial--12.0% Archer-Daniels-Midland,
Deb., 10 1/4%, 2006.................................. 1,400,000 1,779,025
Cincinnati Milacron,
Notes, 8 3/8%, 2004.................................. 5,000,000 5,168,750
du Pont (E.I.) de Nemours and Co.,
Deb., 8 1/4%, 2022................................... 3,000,000 3,266,679
Eli Lilly and Co.,
Notes, 7 1/8%, 2025................................. 4,000,000 4,120,360
Emerson Electric,
Notes, 6.30%, 2005.................................. 1,000,000 992,694
Harnischfeger Industries,
Deb., 8.90%, 2022................................... 1,000,000 1,176,492
Motorola,
Deb., 7 1/2%, 2025.................................. 5,000,000 5,363,740
Phillips Petroleum, Notes:
9 3/8%, 2011........................................ 4,000,000 4,844,852
8.86%, 2022......................................... 5,000,000 5,593,345
Raytheon,
Notes, 6 1/2%, 2005................................. 4,000,000 4,001,460
Union Carbide,
Deb., 8 3/4%, 2022.................................. 2,000,000 2,219,014
------------
38,526,411
------------
Insurance--6.4% NAC Re,
Notes, 8%, 1999..................................... 2,000,000 2,089,324
New York Life Insurance,
Surplus Notes, 7 1/2%, 2023......................... 5,000,000(c) 4,873,500
Orion Capital,
Sr. Notes, 9 1/8%, 2002............................. 3,000,000 3,333,354
Reliastar Financial,
Notes, 6 5/8%, 2003................................. 5,000,000 4,895,760
SunAmerica,
Notes, 9%, 1999..................................... 5,000,000 5,362,345
------------
20,554,283
------------
</TABLE>
<PAGE>
Dreyfus Strategic Income
Statement of Investments (continued)
October 31, 1995
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- --------------------------- --------- -------
<S> <C> <C>
Oil and Gas--.4% Maxus Energy,
Sinking Fund Deb., 11 1/4%, 2013.................. $ 254,000 $ 256,540
Occidental Petroleum,
Sr. Deb., 11 3/4%, 2011........................... 1,000,000 1,067,439
-----------
1,323,979
-----------
Utilities--3.5% AT&T,
Deb., 8.35%, 2025................................. 5,000,000 5,519,730
National Rural Utilities Cooperative Finance,
Collateral Trust Bonds, Ser. V, 9%, 2021.......... 5,000,000 5,688,885
------------
11,208,615
------------
Foreign--.4% Province of Newfoundland,
Sinking Fund Deb., 10%, 2020...................... 1,000,000 1,284,490
------------
Other--5.0% Chemical Master Credit Card Trust I,
Floating Rate Asset Backed Ctfs.,
Ser. 1995-1, Cl. A, 5.995%, 2001.................. 10,000,000(a) 10,000,000
Chevy Chase Master Credit Card Trust,
Floating Rate Asset Backed Ctfs.,
Ser. 1994-5, Cl. A, 6.085%, 2001.................. 5,000,000(a) 5,000,500
Rural Electric Cooperative Grantor Trust Ctfs.
(Soyland), 9.70%, 2017............................ 1,000,000 1,093,905
------------
16,094,405
------------
U.S. Government
and Agencies--18.7% Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation Ctfs.,
Ser. 1166, Cl. 1166-PG, 8%, 2020.................. 4,699,313 4,776,100
Government National Mortgage Association 1:
7%, 7/15/2023..................................... 9,495,298 9,444,783
7 1/2%, 10/15/2023................................ 10,484,292 10,638,202
7 1/2%, 5/15/2024................................. 4,858,735 4,930,061
8%, 8/15/2024..................................... 9,778,128 10,077,535
8%, 9/15/2024..................................... 12,416,920 12,797,127
U.S. Treasury Bonds:
8 7/8%, 2/15/2019................................. 3,000,000 3,871,875
6 7/8%, 8/15/2025................................. 3,000,000 3,215,157
------------
59,750,840
------------
TOTAL BONDS AND NOTES
(cost $298,617,777)............................... $313,081,933
============
</TABLE>
<PAGE>
Dreyfus Strategic Income
Statement of Investments (continued)
October 31, 1995
<TABLE>
<CAPTION>
Principal
Short-Term Investment--.3% Amount Value
- ------------------------- --------- -----
<S> <C> <C>
Time Deposit; Chemical Bank (London),
5 7/8%, 11/1/1995
(cost $1,043,000).......... $ 1,043,000 $ 1,043,000
============
TOTAL INVESTMENTS (cost $299,660,777).................. 98.0% $314,124,933
====== ============
CASH AND RECEIVABLES (NET)............................. 2.0% $ 6,219,990
====== ============
NET ASSETS............................................. 100.0% $320,344,923
====== ============
</TABLE>
Notes to Statement of Investments:
(a) Variable rate security-interest rate subject to periodic
change.
(b) Security is subject to repurchase by the issuer at the
option of the holder. Final maturity is 7/15/2005.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. This security may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At October 31, 1995, this security
amounted to $4,873,500 or 1.5% of net assets.
See notes to financial statements.
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
Statement of Assets and Liabilities
October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $299,660,777)-see statement.............................. $ 314,124,933
Cash........................................................... 320,744
Receivable for investment securities sold...................... 7,317,822
Interest receivable............................................ 5,089,704
Receivable for shares of Beneficial Interest subscribed........ 2,982
Prepaid expenses............................................... 24,106
-------------
326,880,291
LIABILITIES:
Due to The Dreyfus Corporation................................ $ 222,321
Due to Distributor............................................ 8,735
Payable for investment securities purchased................... 5,968,600
Payable for shares of Beneficial Interest redeemed............ 197,082
Accrued expenses.............................................. 138,630 6,535,368
----------- -------------
NET ASSETS......................................................... $ 320,344,923
=============
REPRESENTED BY:
Paid-in capital.................................................. $ 328,172,689
Accumulated net realized (loss) on investments and foreign
currency transactions.......................................... (22,291,922)
Accumulated net unrealized appreciation on investments-Note 4.... 14,464,156
-------------
NET ASSETS at value applicable to 22,520,160 shares outstanding
(unlimited number of $.001 par value shares of Beneficial
Interest authorized)............................................. $ 320,344,923
=============
NET ASSET VALUE, offering and redemption price per share
($320,344,923/22,520,160)........................................ $14.22
=======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
Statement of Operations year ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:...............................................
Interest Income $ 25,027,801
Expenses:
Management fee--Note 3(a).................................... $ 1,898,849
Shareholder servicing costs--Note 3(b,c)..................... 1,164,077
Professional fees............................................ 56,492
Custodian fees 52,900
Trustees' fees and expenses--Note 3(d)....................... 41,846
Registration fees............................................ 35,965
Prospectus and shareholders' reports--Note 3(b).............. 25,461
Miscellaneous 16,526
-----------
Total Expenses 3,292,116
-------------
INVESTMENT INCOME--NET.................................... 21,735,685
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments and foreign currency
transactions--Note 4........................................ $ (8,706,304)
Net unrealized appreciation on investments and foreign
currency transactions....................................... 38,489,861
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 29,783,557
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 51,519,242
=============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
----------------------
1994 1995
---- ----
<C> <C>
OPERATIONS:
Investment income--net............................................. $ 24,598,056 $ 21,735,685
Net realized (loss) on investments and foreign currency
transactions..................................................... (13,631,198) (8,706,304)
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions for the year....................... (39,799,142) 38,489,861
-------------- -------------
Net Increase (Decrease) In Net Assets Resulting From Operations... (28,832,284) 51,519,242
-------------- -------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net........................................ (24,598,056) (21,735,685)
From net realized gain on investments............................. (9,045,367) -
In excess of net realized gain on investments..................... (122,223) -
-------------- -------------
Total Dividends................................................... (33,765,646) (21,735,685)
-------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold..................................... 90,796,927 17,545,801
Dividends reinvested.............................................. 25,835,418 15,878,061
Cost of shares redeemed........................................... (107,007,060) (65,349,244)
-------------- -------------
Increase (Decrease) In Net Assets From Beneficial Interest
Transactions..................................................... 9,625,285 (31,925,382)
-------------- -------------
Total (Decrease) In Net Assets.................................... (52,972,645) (2,141,825)
NET ASSETS:
Beginning of year................................................. 375,459,393 322,486,748
-------------- -------------
End of year....................................................... $ 322,486,748 $ 320,344,923
============== =============
<CAPTION>
Shares Shares
------ ------
<C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 6,360,200 1,300,295
Shares issued for dividends reinvested............................ 1,842,973 1,172,881
Shares redeemed................................................... (7,743,228) (4,864,735)
-------------- -------------
Net Increase (Decrease) In Shares Outstanding..................... 459,945 (2,391,559)
============== =============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
Financial Highlights
Reference is made to page 4 of the Prospectus.
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.
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.
Effective July 24, 1995, all Fund shares are being offered
at net asset value without a sales load.
(a) Portfolio valuation: The Fund's investments (excluding
short-term investments and U.S. Government obligations) are
valued each business day by an independent pricing service
("Service") approved by the Board of Trustees.
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 securities of comparable quality,
coupon,
maturity and type; indications as to values from dealers; and
general market conditions.
Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of
the Board of Trustees.
Investments in U.S. Government obligations are valued at the
mean
between quoted bid and asked prices. Short-term investments are
carried at amortized cost, which approximates value. Investments
denominated in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(b) Foreign currency transactions: The Fund does not
isolate
that portion of the results of operations resulting from changes
in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of
securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from
sales and maturities of short-term securities, sales of foreign
currencies, currency gains or losses realized on securities
transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of
the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains
and losses are included with net realized and unrealized gain or
loss on investments.
(c) 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, including, where applicable, amortization of discount on
investments, is recognized on the accrual basis.
<PAGE>
Dreyfus Strategic Income
- ----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(d) 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, if any, 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.
(e) Federal income taxes: It is the policy of the Fund to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal
income and excise taxes.
The Fund has an unused capital loss carryover of
approximately $22,352,000
available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to
October 31, 1995. If not applied, $13,753,000 of the carryover
expires in fiscal 2002, and $8,599,000
expires in fiscal 2003.
NOTE 2--Bank Line of Credit:
In accordance with an agreement with a bank, the Fund may
borrow up to $10 million under a short-term unsecured line of
credit. Interest on borrowings is
charged at rates which are related to Federal Funds rates in
effect from time to time.
There were no borrowings during the year ended October 31,
1995.
NOTE 3-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 .60 of 1% of the average daily
value of the Fund's net assets and is payable monthly. The
Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings
(which, in the view of Stroock & Stroock & Lavan, counsel to the
Fund, also contemplates
interest on securities sold short) and extraordinary expenses,
exceed the expense limitation of any state having jurisdiction
over the Fund. The most stringent state expense limitation
applicable to the Fund presently requires
reimbursement of expenses in any full fiscal year that such
expenses (exclusive of certain expenses as described above)
exceed 2 1/2% of the first $30 million,
2% of the next $70 million and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in
accordance with California "blue sky"
regulations. There was no expense reimbursement for the year
ended October 31, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of
the Manager, retained $542,812 during the period from November
1,
1994 through July 23, 1995 from commissions earned on sales of
Fund shares.
(b) Prior to July 24, 1995, the Fund's Service Plan (the
"Plan") adopted pursuant to Rule 12b-1 under the Act, provided
that the Fund (a) reimburse the Distributor for payments to
certain Service Agents for distributing the Fund's shares and
servicing shareholder accounts ("Servicing") and (b) pay the
Manager, Dreyfus Service
Corporation and any affiliate of either of them (collectively
"Dreyfus") for advertising and marketing relating to the Fund
and for Servicing at an aggregate
annual rate of .25 of 1% of the value of the Fund's average
daily net assets.
Each of the Distributor and Dreyfus paid Service Agents a fee in
respect of the Fund's shares owned by shareholders with whom the
Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or
holder of record.
Each of the Distributor and Dreyfus determined the amounts to be
paid to Service Agents to which it made payments and the basis
on which such payments were made.
The Plan also separately provided for the Fund to bear the costs
of preparing, printing and distributing certain of the Fund's
prospectuses and statements of
additional information and costs associated with implementing
and
operating the Plan, not to exceed the greater of $100,000 or
.005 of 1% of the Fund's average daily net assets for any full
fiscal year. During the period from November 1,
1994 through July 23, 1995, $580,600 was charged to the Fund
pursuant to the Plan.
(c) Effective July 24, 1995, the Fund has adopted a
Shareholder Services Plan. Under the Shareholder Services Plan,
the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the Fund's average
daily
net assets for the provision of certain services. 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. The Distributor may
make payments to Service Agents in respect of these services.
The Distributor determines the amounts to be paid to Service
Agents. During the period from July
24, 1995 through October 31, 1995, $217,598 was charged to the
Fund by the Distributor pursuant to the Shareholder Services
Plan.
(d) Each trustee who is not an "affiliated person," as
defined in the Act receives from the Fund an annual fee of
$2,500
and an attendance fee of $250 per meeting. The Chairman of the
Board receives an additional 25% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales (including
paydowns) of investment securities, excluding short-term
securities, during the year ended October 31, 1995, amounted to
$525,457,173 and $525,623,147, respectively.
At October 31, 1995, accumulated net unrealized
appreciation
on investments was $14,464,156, consisting of $15,661,770 gross
unrealized appreciation and $1,197,614 gross unrealized
depreciation.
At October 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).
<PAGE>
Dreyfus Strategic Income
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Dreyfus Strategic Income
We have audited the accompanying statement of assets and
liabilities of Dreyfus Strategic Income, including the statement
of investments, as of October 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 October 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 Strategic Income at October 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
December 4, 1995
DREYFUS INCOME FUNDS
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits.
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
(Dreyfus Strategic Income Fund only)
Condensed Financial Information for the period from
October 1, 1986 (commencement of operations) to October 31, 1986
and for each of the nine years in the period ended October 31,
1995.
Included in Part B of the Registration Statement:
Statement of Investments-- October 31, 1995
Statement of Assets and Liabilities-- October 31, 1995
Statement of Operations--year ended October 31, 1995
Statement of Changes in Net Assets--for each of the
two years ended October 31, 1995
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors,
dated December 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) Registrant's Amended and Restated Declaration of
Trust.
(1)(b) Registrant's Articles of Amendment.
(2) Registrant's By-Laws, as amended.
(4) Specimen certificate for the Registrant's securities
is incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A,
filed on October 2, 1986.
(5) Management Agreement.
(6)(a) Distribution Agreement.
(6)(b) Forms of Service Agreement are incorporated by
reference to Exhibit 6(b) and (6)(c) of Post-Effective Amendment
No. 10 to the Registration Statement on Form N-1A, filed on
December 30, 1994.
(8) Amended and Restated Custody Agreement.
(9) Shareholder Sevices Plan.
(10) Opinion and consent of Registrant's counsel is
incorporated by reference to Exhibit (10) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A,
filed on October 2, 1986.
(11) Consent of Independent Auditors.
(16) Schedules of Computation of Performance Data are
incorporated by reference to Exhibit 16 of Post-Effective
Amendment No. 9 to the Registration Statement on Form N-1A,
filed on January 20, 1994.
(27) Financial Data Schedule.
Item 24. Financial Statements and Exhibits. (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of the Directors and
officers are incorporated by reference to Other Exhibits (a) of
Post-Effective Amendments Nos. 7 and 9 to the Registration
Statement on Form N-1A, filed on December 31, 1991 and January
20, 1994, respectively.
(b) Certificate of Secretary is incorporated by
reference to Other Exhibits (b) of Post-Effective Amendment No.
10 to the Registration Statement on Form N-1A, filed on December
30, 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 December 1, 1995
______________ ________________________
Beneficial Interest 13,810
(Par value $.001)
Dreyfus Strategic Income Fund
Item 27. Indemnification
Reference is made to Article EIGHTH of the Registrant's
Agreement and Declaration of Trust to be filed as Exhibit 1
hereto. The application of these provisions is limited by
Article 10 of the Registrant's By-Laws
to the filed as Exhibit 2 hereto and by the following
undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
Item 27. Indemnification (continued)
_______ _______________
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that
in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such
Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred
or paid by a trustee, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by
such trustee, officer of controlling person in connection with
the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement
attached as Exhibit (6) hereto.
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, is a registered broker-dealer. 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****
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
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;
Former Director:
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*****
Vice Chairman of the Board:
Mellon Bank Corporation****
Mellon Bank, N.A.****
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation****
Operating Officer The Boston Company*****
and Director Deputy Director:
Mellon Trust****
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****
President:
Boston Safe Deposit and Trust Company*****
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*****
Laurel Capital Advisors****
Boston Group Holdings, Inc.
Executive Vice President:
Mellon Bank, N.A.****
Boston Safe Deposit & Trust*****
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*;
Formerly, Senior Vice President:
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.*****
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
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 One Mellon
Bank Center, Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston
Place, Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium
Building, 80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 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 GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond
Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Capital Value Fund, Inc.
14) Dreyfus Cash Management
15) Dreyfus Cash Management Plus, Inc.
16) Dreyfus Connecticut Intermediate Municipal Bond
Fund
17) Dreyfus Connecticut Municipal Money Market Fund,
Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
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 and Value Funds, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
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)
<TABLE>
<CAPTION>
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
___________ ___________________________ ____________
<S> <C> <C>
Marie E. Connolly+ Director, President, Chief President and
Executive 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
Paul Prescott+ Vice President None
Elizabeth Bachman++ Assistant Vice President Vice President
and Assistant
Secretary
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.
</TABLE>
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02903-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of
voting upon the question of removal of a trustee or trustees
when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of beneficial interest 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 certifies
that it meets all of the requirements for effectiveness of this
Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of
1933 and 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 29th day of December, 1995.
DREYFUS INCOME FUNDS
(Registrant)
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 dates indicated.
Signatures Title Date
/s/Marie E. Connolly* President and Treasurer 12/29/95
Marie E. Connolly (Principal Executive, Financial
and Accounting Officer)
/s/David W. Burke* Trustee 12/29/95
_________________
David W. Burke
/s/Joseph S. DiMartino* Trustee 12/29/95
______________________
Joseph S. DiMartino
/s/Diane Dunst* Trustee 12/29/95
________________
Diane Dunst
/s/Rosalind Gersten Jacobs* Trustee 12/29/95
___________________________
Rosalind Gersten Jacobs
/s/Jay I. Meltzer* Trustee 12/29/95
____________________
Jay I. Meltzer
/s/Daniel Rose* Trustee 12/29/95
___________________
Daniel Rose
/s/Warren Rudman* Trustee 12/29/95
___________________
Warren Rudman
/s/Sander Vanocur* Trustee 12/29/95
____________________
Sander Vanocur
*BY:
__________________________
Eric B. Fischman,
Attorney-in-Fact
EXHIBIT INDEX
Exhibits
(1)(a) Amended and Restated Declaration of Trust.
(1)(b) Articles of Amendment
(2) By-Laws
(5) Management Agreement
(6) Distribution Agreement
(8) Custody Agreement
(9) Shareholder Services Plan
(11) Consent of Independent Auditors
(27) Financial Data Schedule
<PAGE>
Exhibit (1)(a)
DREYFUS STRATEGIC INCOME
Amended and Restated Agreement and Declaration of Trust
THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF
TRUST, made this 25th day of June, 1992, hereby amends and
restates in its entirety the Agreement and Declaration of Trust
made at Boston, Massachusetts, dated July 24, 1985, by the
Trustees hereunder (hereinafter with any additional and
successor trustees referred to as the "Trustees") and by the
holders of shares of beneficial interest to be issued hereunder
as hereinafter provided.
W I T N E S S E T H :
WHEREAS, the Trustees have agreed to manage all
property coming into their hands as trustees of a Massachusetts
business trust in accordance with the provisions hereinafter set
forth.
NOW, THEREFORE, the Trustees hereby declare that they
will hold all cash, securities and other assets, which they may
from time to time acquire in any manner as Trustees hereunder IN
TRUST to manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders from time
to time of Shares, whether or not certificated, in this Trust as
hereinafter set forth.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as
"Dreyfus Strategic Income."
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The term "Commission" shall have the meaning
provided in the 1940 Act;
(b) The "Trust" refers to the Massachusetts business
trust established by this Agreement and Declaration of Trust, as
amended from time to time;
(c) "Shareholder" means a record owner of Shares of
the Trust;
(d) "Shares" means the equal proportionate
transferable units of interest into which the beneficial
interest
in the Trust
shall be divided from time to time or, if more than one series
or class of Shares is authorized by the Trustees, the equal
proportionate transferable units into which each series or class
of Shares shall be divided from time to time, and includes a
fraction of a Share as well as a whole Share;
(e) The "1940 Act" refers to the Investment Company
Act of 1940, and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The term "Manager" is defined in Article IV, Sec-
tion 5;
(g) The term "Person" shall mean an individual or any
corporation, partnership, joint venture, trust or other
enterprise;
(h) "Declaration of Trust" shall mean this Agreement
and Declaration of Trust as amended or restated from time to
time;
(i) "Bylaws" shall mean the Bylaws of the Trust as
amended from time to time;
(j) The term "series" or "series of Shares" refers to
the one or more separate investment portfolios of the Trust into
which the assets and liabilities of the Trust may be divided and
the Shares of the Trust representing the beneficial interest of
Shareholders in such respective portfolios; and
(k) The term "class" or "class of Shares" refers to
the division of Shares representing any series into two or more
classes as provided in Article III, Section 1 hereof.
ARTICLE II
Purposes of Trust
This Trust is formed for the following purpose or
purposes:
(a) to conduct, operate and carry on the business of
an investment company;
(b) to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, hold, pledge, sell, assign,
transfer, lend, write options on, exchange, distribute or
otherwise dispose of and
deal in and with securities of every nature, kind, character,
type and form, including, without limitation of the generality
of
the foregoing, all types of stocks, shares, futures contracts,
bonds, debentures, notes, bills and other negotiable or
non-negotiable instruments, obligations, evidences of interest,
certificates of interest, certificates of participation,
certificates, interests,
evidences of ownership, guarantees, warrants, options or
evidences of indebtedness issued or created by or guaranteed as
to principal
and interest by any state or local government or any agency or
instrumentality thereof, by the United States Government or any
agency, instrumentality, territory, district or possession
thereof, by any foreign government or any agency,
instrumentality, territory, district or possession thereof, by
any corporation organized under the laws of any state, the
United
States or any territory or possession thereof or under the laws
of any foreign country, bank certificates of deposit, bank time
deposits, bankers' acceptances and commercial paper; to pay for
the same in cash or by the issue of stock, including treasury
stock, bonds or
notes of the Trust or otherwise; and to exercise any and all
rights, powers and privileges of ownership or interest in
respect
of any and all such investments of every kind and description,
including, without limitation, the right to consent and
otherwise
act with respect thereto, with power to designate one or more
persons, firms, associations or corporations to exercise any of
said rights, powers and privileges in respect of any said
instruments;
(c) to borrow money or otherwise obtain credit and to
secure the same by mortgaging, pledging or otherwise subjecting
as security the assets of the Trust;
(d) to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer,
and
otherwise deal in, Shares including Shares in fractional
denominations, and to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or
other assets of the appropriate series or class of Shares,
whether capital or surplus or otherwise, to the full extent now
or hereafter permitted by the laws of The Commonwealth of
Massachusetts;
(e) to conduct its business, promote its purposes,
and carry on its operations in any and all of its branches and
maintain offices both within and without The Commonwealth of
Massachusetts, in any and all States of the United States of
America, in the District of Columbia, and in any other parts of
the world; and
(f) to do all and everything necessary, suitable,
convenient, or proper for the conduct, promotion, and attainment
of any of the businesses and purposes herein specified or which
at any time may be incidental thereto or may appear conducive to
or expedient for the accomplishment of any of such businesses
and
purposes and which might be engaged in or carried on by a Trust
organized under the Massachusetts General Laws, and to have and
exercise all of the powers conferred by the laws of The Common-
wealth of Massachusetts upon a Massachusetts business trust.
The foregoing provisions of this Article II shall be
construed both as purposes and powers and each as an independent
purpose and power.
ARTICLE III
Beneficial Interest
Section 1. Shares of Beneficial Interest. The Shares
of the Trust shall be issued in one or more series as the
Trustees may, without Shareholder approval, authorize. Each
series shall be preferred over all other series in respect of
the
assets allocated to that series and shall represent a separate
investment portfolio of the Trust. The beneficial interest in
each series at
all times shall be divided into Shares, with or without par
value as the Trustees may from time to time determine, each of
which shall, except as provided in the following sentence,
represent an
equal proportionate interest in the series with each other Share
of the same series, none having priority or preference over
another. The Trustees may, without Shareholder approval, divide
Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative
rights
and privileges (including conversion rights, if any) as the
Trustees may determine. The number of Shares authorized shall
be
unlimited, and the Shares so authorized may be represented in
part by fractional shares. From time to time, the Trustees may
divide or combine the Shares of any series or class into a
greater or
lesser number without thereby changing the proportionate
beneficial interests in the series or class.
Section 2. Ownership of Shares. The ownership of
Shares will be recorded in the books of the Trust or a transfer
agent. The record books of the Trust or any transfer agent, as
the case may be, shall be conclusive as to who are the holders
of Shares of each series and class and as to the number of
Shares
of each series and class held from time to time by each. No
certificates certifying the ownership of Shares need be issued
except as the Trustees may otherwise determine from time to
time.
Section 3. Issuance of Shares. The Trustees are
authorized, from time to time, to issue or authorize the
issuance of Shares at not less than the par value thereof, if
any, and to
fix the price or the minimum price or the consideration (in cash
and/or such other property, real or personal, tangible or
intangible, as from time to time they may determine) or minimum
consideration for such Shares. Anything herein to the contrary
notwithstanding, the Trustees may issue Shares pro rata to the
Shareholders of a series at any time as a stock dividend, except
to the extent otherwise required or permitted by the preferences
and special or relative rights and privileges of any classes of
Shares of that series, and any stock dividend to the
Shareholders
of a particular class of Shares shall be made to such
Shareholders
pro rata in proportion to the number of Shares of such class
held by each of them.
All consideration received by the Trust for the issue or
sale of Shares of each series, together with all income,
earnings,
profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation thereof, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall belong irrevocably to the
series of Shares with respect to which the same were received by
the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of
the Trust and are herein referred to as "assets of" such series.
Shares may be issued in fractional denominations to the
same extent as whole Shares, and Shares in fractional
denominations shall be Shares having proportionately to the
respective fractions represented thereby all the rights of whole
Shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to
participate upon liquidation of the Trust or of a particular
series of Shares.
Section 4. No Preemptive Rights. Shareholders shall
have no preemptive or other right to subscribe for any
additional Shares or other securities issued by the Trust.
Section 5. Status of Shares and Limitation of
Personal Liability. Shares shall be deemed to be personal
property giving
only the rights provided in this instrument. Every Shareholder
by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same
nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against
the
Trust or the Trustees, but only to the rights of said decedent
under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of
the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the
Trustees, nor any officer, employee or agent of the Trust shall
have any power to bind any Shareholder or Trustee personally or
to
call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder at any
time personally may agree to pay by way of subscription for any
Shares or otherwise. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust shall include a
recitation limiting the obligation represented thereby to the
Trust and its assets or the assets of a particular series (but
the omission of such a recitation shall not operate to bind any
Shareholder or Trustee personally).
ARTICLE IV
Trustees
Section 1. Election. A Trustee may be elected either
by the Trustees or the Shareholders. The Trustees named herein
shall serve until the first meeting of the Shareholders or until
the election and qualification of their successors. Prior to
the first meeting of Shareholders the initial Trustees hereunder
may elect additional Trustees to serve until such meeting and
until their successors are elected and qualified. The Trustees
also at
any time may elect Trustees to fill vacancies in the number of
Trustees. The number of Trustees shall be fixed from time to
time by the Trustees and, at or after the commencement of the
business of the Trust, shall be not less than three. Each
Trustee, whether
named above or hereafter becoming a Trustee, shall serve as a
Trustee during the lifetime of this Trust, until such Trustee
dies, resigns, retires, or is removed, or, if sooner, until the
next meeting of Shareholders called for the purpose of electing
Trustees and the election and qualification of his successor.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect
their own successors and, pursuant to this Section, may appoint
Trustees to fill vacancies.
Section 2. Powers. The Trustees shall have all powers
necessary or desirable to carry out the purposes of the Trust,
including, without limitation, the powers referred to in Article
II hereof. Without limiting the generality of the foregoing,
the Trustees may adopt By-Laws not inconsistent with this
Declaration
of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that they do not
reserve that right to the Shareholders; they may fill vacancies
in their number, including vacancies resulting from increases in
their own number, and may elect and remove such officers and
employ, appoint and terminate such employees or agents as they
consider appropriate; they may appoint from their own number and
terminate any one or more committees; they may employ one or
more custodians of the assets of the Trust and may authorize
such
custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central
handling of
securities, retain a transfer agent and a Shareholder servicing
agent, or both, provide for the distribution of Shares through a
principal underwriter or otherwise, set record dates, and in
general delegate such authority as they consider desirable
(including, without limitation, the authority to purchase and
sell securities and to invest funds, to determine the net income
of the
Trust for any period, the value of the total assets of the Trust
and the net asset value of each Share, and to execute such
deeds, agreements or other instruments either in the name of the
Trust or the names of the Trustees or as their attorney or
attorneys or
otherwise as the Trustees from time to time may deem expedient)
to any officer of the Trust, committee of the Trustees, any such
employee, agent, custodian or underwriter or to any Manager.
Without limiting the generality of the foregoing, the
Trustees shall have full power and authority:
(a) To invest and reinvest cash and to hold cash
uninvested;
(b) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem
proper, granting to
such person or persons such power and discretion with relation
to securities or property as the Trustees shall deem proper;
(c) To hold any security or property in a form not
indicating any trust whether in bearer, unregistered or other
negotiable form or in the name of the Trust or a custodian,
subcustodian or other depository or a nominee or nominees or
otherwise;
(d) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent
to any contract, lease, mortgage, purchase or sale of property
by
such corporation or concern, and to pay calls or subscriptions
with respect to any security held in the Trust;
(e) To join with other security holders in acting
through a committee, depositary, voting trustee or otherwise,
and in that connection to deposit any security with, or transfer
any security to, any such committee, depositary or trustee, and
to delegate to them such power and authority with relation to
any
security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(f) To compromise, arbitrate, or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including, but not limited to, claims for taxes;
(g) Subject to the provisions of Article III, Section
3, to allocate assets, liabilities, income and expenses of the
Trust to a particular series of Shares or to apportion the same
among two or more series, provided that any liabilities or
expenses incurred by a particular series of Shares shall be
payable solely out of the assets of that series; and to the
extent
necessary or appropriate to give effect to the preferences and
special or relative rights and privileges of any classes of
Shares, to allocate assets, liabilities, income and expenses of
a series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of that
series;
(h) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(i) To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate
for the conduct of the business, including, without limitation,
insurance policies insuring the assets of the Trust and payment
of distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees,
officers,
employees, agents, investment advisers or Managers, principal
underwriters, or independent contractors of the Trust
individually
against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken
or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or Manager, principal
underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute
negligence,
whether or not the Trust would have the power to indemnify such
person against such liability; and
(j) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit
plans, trusts
and provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Further, without limiting the generality of the
foregoing, the Trustees shall have full power and authority to
incur and pay out of the principal or income of the Trust such
expenses and liabilities as may be deemed by the Trustees to be
necessary or proper for the purposes of the Trust; provided,
however, that all expenses and liabilities incurred by or
arising in connection with a particular series of Shares, as
determined by
the Trustees, shall be payable solely out of the assets of that
series.
Any determination made in good faith and, so far as
accounting matters are involved, in accordance with generally
accepted accounting principles by or pursuant to the authority
granted by the Trustees, as to the amount of the assets, debts,
obligations or liabilities of the Trust or a particular series
or class of Shares; the amount of any reserves or charges set up
and the propriety thereof; the time of or purpose for creating
such reserves or charges; the use, alteration or cancellation of
any reserves or charges (whether or not any debt, obligation or
liability for which such reserves or charges shall have been
created shall have been paid or discharged or shall be then or
thereafter required to be paid or discharged); the price or
closing bid or asked price of any investment owned or held by
the
Trust or a particular series; the market value of any investment
or fair value of any other asset of the Trust or a particular
series; the number of Shares outstanding; the estimated expense
to the Trust or a particular series in connection with purchases
of its Shares; the ability to liquidate investments in an
orderly
fashion; and the extent to which it is practicable to deliver a
cross-section of the portfolio of the Trust or a particular
series
in payment for any such Shares, or as to any other matters
relating to the issue, sale, purchase and/or other acquisition
or disposition of investments or Shares of the Trust or a
particular
series, shall be final and conclusive, and shall be binding upon
the Trust or such series and its Shareholders, past, present and
future, and Shares are issued and sold on the condition and
understanding that any and all such determinations shall be
binding as aforesaid.
Section 3. Meetings. At any meeting of the Trustees,
a majority of the Trustees then in office shall constitute a
quorum.
Any meeting may be adjourned from time to time by a majority of
the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without
further notice.
When a quorum is present at any meeting, a majority of
the Trustees present may take any action, except when a larger
vote is required by this Declaration of Trust, the By-Laws or
the 1940 Act.
Any action required or permitted to be taken at any
meeting of the Trustees or of any committee thereof may be taken
without a meeting, if a written consent to such action is signed
by a majority of the Trustees or members of any such committee
then in office, as the case may be, and such written consent is
filed with the minutes of proceedings of the Trustees or any
such committee.
The Trustees or any committee designated by the Trustees
may participate in a meeting of the Trustees or such committee
by means of a conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other at the same time. Participation by
such means shall constitute presence in person at a meeting.
Section 4. Ownership of Assets of the Trust. Title to
all of the assets of each series of Shares of the Trust at all
times shall be considered as vested in the Trustees.
Section 5. Investment Advice and Management Services.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees. The Trustees from time to time may enter into a
written contract or contracts with any person or persons (herein
called the "Manager"), including any firm, corporation, trust or
association in which any Trustee or Shareholder may be
interested, to act as investment advisers and/or managers of the
Trust and to
provide such investment advice and/or management as the Trustees
from time to time may consider necessary for the proper
management of the assets of the Trust, including, without
limitation, authority to determine from time to time what
investments shall be
purchased, held, sold or exchanged and what portion, if any, of
the assets of the Trust shall be held uninvested and to make
changes in the Trust's investments. Any such contract shall be
subject to the requirements of the 1940 Act with respect to its
continuance in effect, its termination and the method of
authorization and approval of such contract, or any amendment
thereto or renewal thereof.
Any Trustee or any organization with which any Trustee
may be associated also may act as broker for the Trust in making
purchases and sales of securities for or to the Trust for its
investment portfolio, and may charge and receive from the Trust
the usual and customary commission for such service. Any
organization with which a Trustee may be associated in acting as
broker for the Trust shall be responsible only for the proper
execution of transactions in accordance with the instructions of
the Trust and shall be subject to no further liability of any
sort whatever.
The Manager, or any affiliate thereof, also may be a
distributor for the sale of Shares by separate contract or may
be a person controlled by or affiliated with any Trustee or any
distributor or a person in which any Trustee or any distributor
is interested financially, subject only to applicable provisions
of law. Nothing herein contained shall operate to prevent any
Manager, who also acts as such a distributor, from also
receiving compensation for services rendered as such
distributor.
Section 6. Removal and Resignation of Trustees. The
Trustees or the Shareholders (by vote of 66-2/3% of the
outstanding Shares entitled to vote thereon) may remove at any
time any Trustee with or without cause, and any Trustee may
resign
at any time as Trustee, without penalty by written notice to the
Trust; provided that sixty days' advance written notice shall be
given in the event that there are only three or fewer Trustees
at the time a notice of resignation is submitted.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. The Shareholders shall have
power to vote only (i) for the election of Trustees as provided
in Article IV, Section 1, of this Declaration of Trust;
provided,
however, that no meeting of Shareholders is required to be
called
for the purpose of electing Trustees unless and until such time
as less than a majority of the Trustees have been elected by the
Shareholders, (ii) for the removal of Trustees as provided in
Article IV, Section 6, (iii) with respect to any Manager as pro-
vided in Article IV, Section 5, (iv) with respect to any
amendment
of this Declaration of Trust as provided in Article IX, Section
9, (v) with respect to a consolidation, merger or certain sales
of assets as provided in Article IX, Section 5, (vi) with
respect
to the termination of the Trust or a series of Shares as
provided
in Article IX, Section 6, and (vii) with respect to such
additional
matters relating to the Trust as may be required by law, by this
Declaration of Trust, or the By-Laws of the Trust or any
registration of the Trust with the Commission or any state, or
as the Trustees may consider desirable. Each whole Share shall
be entitled to one vote as to any matter on which it is entitled
to vote (except that in the election of Trustees said vote may
be
cast for as many persons as there are Trustees to be elected),
and each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote
shall
be voted by individual series, except (i) when required by the
1940 Act, Shares shall be voted in the aggregate and not by
individual series and (ii) when the Trustees have determined
that
the matter affects only the interests of one or more series or
class, or as otherwise required by applicable law, then only
Shareholders of such series or class shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them, unless at or
prior
to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger.
Until
Shares are issued, the Trustees may exercise all rights of
Shareholders
and may take any action required by law, this Declaration of
Trust
or any By-Laws of the Trust to be taken by Shareholders.
Section 2. Meetings. Meetings of the Shareholders may
be called by the Trustees or such other person or persons as may
be specified in the By-Laws and shall be called by the Trustees
upon the written request of Shareholders owning at least 30% of
the outstanding Shares entitled to vote. Shareholders shall be
entitled to at least ten days' prior notice of any meeting.
Section 3. Quorum and Required Vote. Thirty percent
(30%) of the outstanding Shares shall be a quorum for the
transaction of business at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust
permits
or requires that holders of any series or class shall vote as a
series or class, then thirty percent (30%) of the aggregate
number of Shares of that series or class entitled to vote shall
be necessary to constitute a quorum for the transaction of
business
by that series or class. Any lesser number, however, shall be
sufficient for adjournment and any adjourned session or sessions
may be held within 90 days after the date set for the original
meeting without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of
Trust or the By-Laws of the Trust and subject to any applicable
requirements of law, a majority of the Shares voted shall decide
any question and a plurality shall elect a Trustee, provided
that where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class
shall
vote as a series or class, then a majority of the Shares of that
series or
class voted on the matter (or a plurality with respect to the
election of a Trustee) shall decide that matter insofar as that
series or class is concerned.
Section 4. Action by Written Consent. Any action
required or permitted to be taken at any meeting may be taken
without a meeting if a consent in writing, setting forth such
action, is signed by a majority of Shareholders entitled to vote
on the subject matter thereof (or such larger proportion thereof
as shall be required by any express provision of this
Declaration of Trust) and such consent is filed with the records
of the Trust.
Section 5. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters.
ARTICLE VI
Distributions and Redemptions
Section 1. Distributions. The Trustees shall
distribute periodically to the Shareholders of each series of
Shares an amount approximately equal to the net income of that
series, determined by the Trustees or as they may authorize and
as herein provided. Distributions of income may be made in one
or more payments, which shall be in Shares, cash or otherwise,
and on
a date or dates and as of a record date or dates determined by
the Trustees. At any time and from time to time in their
discretion, the Trustees also may cause to be distributed to the
Shareholders
of any one or more series as of a record date or dates
determined by the Trustees, in Shares, cash or otherwise, all or
part of any
gains realized on the sale or disposition of the assets of the
series or all or part of any other principal of the Trust
attributable to the series. Each distribution pursuant to this
Section 1 shall be made ratably according to the number of
Shares of the series held by the several Shareholders on the
record date
for such distribution, except to the extent otherwise required
or permitted by the preferences and special or relative rights
and
privileges of any classes of Shares of that series, and any
distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the
number of Shares of such class held by each of them. No
distribution need be made on Shares purchased pursuant to orders
received, or for which payment is made, after such time or times
as the Trustees may determine.
Section 2. Determination of Net Income. In
determining the net income of each series or class of Shares for
any period, there shall be deducted from income for that period
(a) such portion of all charges, taxes, expenses and liabilities
due or accrued as the Trustees shall consider properly
chargeable
and fairly applicable to income for that period or any earlier
period
and (b) whatever reasonable reserves the Trustees shall consider
advisable for possible future charges, taxes, expenses and
liabilities which the Trustees shall consider properly
chargeable
and fairly applicable to income for that period or any earlier
period. The net income of each series or class for any period
may be adjusted for amounts included on account of net income in
the net asset value of Shares issued or redeemed or repurchased
during
that period. In determining the net income of a series or class
for a period ending on a date other than the end of its fiscal
year, income may be estimated as the Trustees shall deem fair.
Gains on the sale or disposition of assets shall not be treated
as income, and losses shall not be charged against income unless
appropriate under applicable accounting principles, except in
the exercise of the discretionary powers of the Trustees. Any
amount
contributed to the Trust which is received as income pursuant to
a decree of any court of competent jurisdiction shall be applied
as required by the said decree.
Section 3. Redemptions. Any Shareholder shall be
entitled to require the Trust to redeem and the Trust shall be
obligated to redeem at the option of such Shareholder all or any
part of the Shares owned by said Shareholder, at the redemption
price, pursuant to the method, upon the terms and subject to the
conditions hereinafter set forth:
(a) Certificates for Shares, if issued, shall be
presented for redemption in proper form for transfer to the
Trust
or the agent of the Trust appointed for such purpose, and these
shall be presented with a written request that the Trust redeem
all or any part of the Shares represented thereby.
(b) The redemption price per Share shall be the net
asset value per Share when next determined by the Trust at such
time or times as the Trustees shall designate, following the
time
of presentation of certificates for Shares, if issued, and an
appropriate request for redemption, or such other time as the
Trustees may designate in accordance with any provision of the
1940 Act, or any rule or regulation made or adopted by any
securities association registered under the Securities Exchange
Act of 1934, as determined by the Trustees, less any applicable
charge or fee imposed from time to time as determined by the
Trustees.
(c) Net asset value of each series or class of Shares
(for the purpose of issuance of Shares as well as redemptions
thereof) shall be determined by dividing:
(i) the total value of the assets of such series
or class determined as provided in paragraph (d) below
less, to the extent determined by or pursuant to the
direction of the Trustees in accordance with generally
accepted accounting principles, all debts, obligations
and liabilities of such series or class (which debts,
obligations and liabilities shall include, without
limitation of the generality of the foregoing, any and
all debts, obligations, liabilities, or claims, of any
and every kind and nature, fixed, accrued and otherwise,
including the estimated accrued expenses of management
and supervision, administration and distribution and any
reserves or charges for any or all of the foregoing,
whether for taxes, expenses, or otherwise, and the price
of Shares redeemed but not paid for) but excluding the
Trust's liability upon its Shares and its surplus, by
(ii) the total number of Shares of such series or
class outstanding.
The Trustees are empowered, in their absolute
discretion, to establish other methods for determining such net
asset value whenever such other methods are deemed by them to be
necessary to enable the Trust to comply with applicable law, or
are deemed by them to be desirable, provided they are not
inconsistent with any provision of the 1940 Act.
(d) In determining for the purposes of this
Declaration of Trust the total value of the assets of each
series
or class of Shares at any time, investments and any other assets
of such series or class shall be valued in such manner as may be
determined from time to time by or pursuant to the order of the
Trustees.
(e) Payment of the redemption price by the Trust may be
made either in cash or in securities or other assets at the time
owned by the Trust or partly in cash and partly in securities or
other assets at the time owned by the Trust. The value of any
part of such payment to be made in securities or other assets of
the Trust shall be the value employed in determining the
redemption price. Payment of the redemption price shall be made
on or before the seventh day following the day on which the
Shares
are properly presented for redemption hereunder, except that
delivery of any securities included in any such payment shall be
made as promptly as any necessary transfers on the books of the
issuers whose securities are to be delivered may be made and,
except as postponement of the date of payment may be permissible
under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may
deduct from the payment made for any Shares redeemed a
liquidating
charge not in excess of one percent (1%) of the redemption price
of the Shares so redeemed, and the Trustees may alter or suspend
any such liquidating charge from time to time.
(f) The right of any holder of Shares redeemed by the
Trust as provided in this Article VI to receive dividends or
distributions thereon and all other rights of such Shareholder
with respect to such Shares shall terminate at the time as of
which the redemption price of such Shares is determined, except
the right of such Shareholder to receive (i) the redemption
price
of such Shares from the Trust in accordance with the provisions
hereof, and (ii) any dividend or distribution to which such
Shareholder previously had become entitled as the record holder
of such
Shares on the record date for such dividend or distribution.
(g) Redemption of Shares by the Trust is conditional
upon the Trust having funds or other assets legally available
therefor.
(h) The Trust, either directly or through an agent, may
repurchase its Shares, out of funds legally available therefor,
upon such terms and conditions and for such consideration as the
Trustees shall deem advisable, by agreement with the owner at a
price not exceeding the net asset value per Share as determined
by
or pursuant to the order of the Trustees at such time or times
as the Trustees shall designate, less a charge not to exceed one
percent (1%) of such net asset value, if and as fixed by
resolution of the Trustees from time to time, and to take all
other steps deemed necessary or advisable in connection
therewith.
(i) Shares purchased or redeemed by the Trust shall be
cancelled or held by the Trust for reissue, as the Trustees from
time to time may determine.
(j) The obligations set forth in this Article VI may
be suspended or postponed, (1) for any period (i) during which
the New York Stock Exchange is closed other than for customary
weekend and holiday closings, or (ii) during which trading on
the
New York Stock Exchange is restricted, (2) for any period during
which an emergency exists as a result of which (i) the disposal
by the Trust of investments owned by it is not reasonably
practicable, or
(ii) it is not reasonably practicable for the Trust fairly to
determine the value of its net assets, or (3) for such other
periods as the Commission or any successor governmental
authority by order may permit.
Notwithstanding any other provision of this Section 3 of
Article VI, if certificates representing such Shares have been
issued, the redemption or repurchase price need not be paid by
the
Trust until such certificates are presented in proper form for
transfer to the Trust or the agent of the Trust appointed for
such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees,
regardless of whether or not such presentation has been made.
Section 4. Redemptions at the Option of the Trust.
The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof
as determined in accordance with Section 3 of Article VI of this
Declaration of Trust: (i) if at such time such Shareholder owns
fewer Shares than, or Shares having an aggregate net asset value
of less than, an amount determined from time to time by the
Trustees; or (ii) to the extent that such Shareholder owns
Shares
of a particular series or class of Shares equal to or in excess
of a percentage of the outstanding Shares of that series or
class
determined from time to time by the Trustees; or (iii) to the
extent that such Shareholder owns Shares of the Trust
representing
a percentage equal to or in excess of such percentage of the
aggregate number of outstanding Shares of the Trust or the
aggregate net asset value of the Trust determined from time to
time by the Trustees.
Section 5. Dividends, Distributions, Redemptions and
Repurchases. No dividend or distribution (including, without
limitation, any distribution paid upon termination of the Trust
or of any series) with respect to, nor any redemption or
repurchase of, the Shares of any series shall be effected by the
Trust other than from the assets of such series.
ARTICLE VII
Compensation and Limitation of
Liability of Trustees
Section 1. Compensation. The Trustees shall be
entitled to reasonable compensation from the Trust and may fix
the amount of their compensation.
Section 2. Limitation of Liability. The Trustees
shall not be responsible or liable in any event for any neglect
or wrongdoing of any officer, agent, employee or Manager of the
Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, but nothing herein contained
shall protect any Trustee against any liability to which he
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.
Every note, bond, contract, instrument, certificate,
share, or undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust or the Trustees or
any of them in connection with the Trust, shall be deemed
conclusively to have been executed or done only in their or his
capacity as Trustees or Trustee, and such Trustees or Trustee
shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Section 1. Indemnification of Trustees, Officers,
Employees and Agents. Each person who is or was a Trustee,
officer, employee or agent of the Trust shall be entitled to
indemnification out of the assets of the Trust to the extent
provided in, and subject to the provisions of, the By-Laws,
provided that no indemnification shall be granted by the Trust
in contravention of the 1940 Act.
Section 2. Merged Corporations. For the purposes of
this Article VIII references to "the Trust" include any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or
agents as well as the resulting or surviving entity; so that any
person who is or was a director, officer, employee or agent of
such a constituent corporation or is or was serving at the
request of such a constituent corporation as a trustee,
director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article VIII with respect
to the resulting or surviving entity as he would have with
respect to
such a constituent corporation if its separate existence had
continued.
Section 3. Shareholders. In case any Shareholder or
former Shareholder shall be held to be personally liable solely
by reason of his being or having been a Shareholder and not
because of his acts or omissions or for some other reason, the
Shareholder
or former Shareholder (or his heirs, executors, administrators
or other legal representatives or in the case of a corporation
or
other entity, its corporate or other general successor) shall be
entitled out of the assets of the particular series of Shares of
which he is or was a Shareholder to be held harmless from and
indemnified against all losses and expenses arising from such
liability. Upon request, the Trust shall cause its counsel to
assume the defense of any claim which, if successful, would
result
in an obligation of the Trust to indemnify the Shareholder as
aforesaid.
ARTICLE IX
Status of the Trust and Other General Provisions
Section 1. Trust Not a Partnership. It is hereby
expressly declared that a trust and not a partnership is created
hereby. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind
personally either the Trust's Trustees or officers or any Share-
holders. All persons extending credit to, contracting with or
having any claim against the Trust or a particular series of
Shares shall look only to the assets of the Trust or the assets
of
that particular series for payment under such credit, contract
or claim; and neither the Shareholders nor the Trustees, nor any
of the Trust's officers, employees or agents, whether past,
present
or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any
liability to which such Trustee otherwise would be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
Section 2. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety. The exercise by the Trustees of
their
powers and discretion hereunder under the circumstances then
prevailing, shall be binding upon everyone interested. A
Trustee
shall be
liable for his or her own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact
or
law.
The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of
Trust,
and subject to the provisions of Section 1 of this Article IX
shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such
advice.
The Trustees shall not be required to give any bond as such, nor
any surety if a bond is required.
Section 3. Liability of Third Persons Dealing with
Trustees. No person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made
or to be made by the Trustees pursuant hereto or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
Section 4. Trustees, Shareholders, etc. Not
Personally
Liable; Notice. All persons extending credit to, contracting
with or having any claim against the Trust or a particular
series of Shares shall look only to the assets of the Trust or
the assets
of that particular series of Shares for payment under such
credit, contract or claim; and neither the Shareholders nor the
Trustees,
nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor.
Section 5. Consolidation, Merger, Sale of Assets. The
Trust may, in accordance with the provisions of this Section:
(1) Consolidate with one or more corporations or
trusts to form a new consolidated corporation or trust; or
(2) Merge into a corporation or trust, or have merged
into it one or more corporations or trusts; or
(3) Sell, lease, exchange or transfer all, or
substantially all, its property and assets, including its good
will and franchises.
Any such consolidation, merger, sale, lease, exchange or
other transfer of all or substantially all of the property and
assets of the Trust may be made only upon substantially the
terms
and conditions set forth in a proposed form of articles of
consolidation, articles of merger or articles of sale, lease,
exchange or transfer, as the case may be, which are approved by
votes of the Trustees and Shareholders holding a majority of the
Shares entitled to vote thereon, provided that in the case of a
merger in which the Trust is the surviving entity which effects
no reclassification or change of any outstanding shares of the
Trust
or other amendment of this Declaration of Trust, no vote of the
Shareholders shall be necessary (and in lieu thereof, the
proposed
articles of merger shall be approved by a majority of the
Trustees) if the number of Shares, if any, of the Trust to be
issued or delivered in the merger does not exceed fifteen
percent
of the number of Shares outstanding (before giving effect to the
merger) on the effective date of the merger. Any articles of
consolidation, merger, sale, lease, exchange or transfer shall
constitute a supplemental Declaration of Trust, copies of which
shall be filed as specified in Section 7 of this Article IX.
Section 6. Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of
time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares of each
series entitled to vote or by the Trustees by written notice to
the Shareholders. Any series of Shares may be terminated at any
time by vote of Shareholders holding at least a majority of the
Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more
series of Shares, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued
or anticipated as may be determined by the Trustees, the Trust
shall reduce, in accordance with such procedures as the Trustees
consider appropriate, the remaining assets to distributable form
in cash or shares or other securities, or any combination
thereof,
and distribute the proceeds to the Shareholders of the series
involved, ratably according to the number of Shares of such
series
held by the several Shareholders of such series on the date of
termination, except to the extent otherwise required or
permitted
by the preferences and special or relative rights and privileges
of any classes of Shares of that series, provided that any
distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the
number of Shares of such class held by each of them.
Section 7. Filing of Copies, References, Headings. The
original or a copy of this instrument and of each amendment
hereto and of each Declaration of Trust supplemental hereto
shall
be kept at the office of the Trust where it may be inspected by
any Shareholder. A copy of this instrument and of each such
amendment and
supplemental Declaration of Trust shall be filed by the Trust
with the Secretary of State of The Commonwealth of Massachusetts
and the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required.
Anyone
dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments or
supplemental
Declarations of Trust have been made and as to matters in
connection with the Trust hereunder; and, with the same effect
as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendment or supplemental Declaration of Trust. In this
instrument or in any such amendment or supplemental Declaration
of Trust, references to this instrument, and all expressions
like
"herein," "hereof," and "hereunder," shall be deemed to refer to
this instrument as amended or affected by any such amendment or
supplemental Declaration of Trust. Headings are placed herein
for
convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall
control.
This instrument may be executed in any number of counterparts
each of which shall be deemed an original.
Section 8. Applicable Law. The Trust set forth in
this instrument is made in The Commonwealth of Massachusetts,
and
it is
created under and is to be governed by and construed and
administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by
such a trust.
Section 9. Amendments. This Declaration of Trust may
be amended at any time by an instrument in writing signed by a
majority of the then Trustees when authorized so to do by a vote
of Shareholders holding a majority of the Shares of each series
or class entitled to vote, except that an amendment which shall
affect the holders of one or more series or class of Shares but
not the holders of all outstanding series or class shall be
authorized by vote of the Shareholders holding a majority of the
Shares entitled to vote of each series or class affected and no
vote of Shareholders of a series or class not affected shall be
required. Amendments having the purpose of changing the name of
the Trust or of supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or
inconsistent
provision contained herein shall not require authorization by
Shareholder vote.
IN WITNESS WHEREOF, the undersigned Trustees have
hereunto set their hand and seal for themselves and their
assigns as of the day and year first above written.
David P. Feldman
Diane Dunst
Jay I. Meltzer
Daniel Rose
Howard Stein
Sander Vanocur
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 25th day of June, 1992, before me personally
came the above-named Trustees of the Fund, to me known, and
known to me to be the persons described in and who executed the
foregoing instrument, and each duly acknowledged to me that he
or she had executed the same.
Notary Public
<PAGE>
Exhibit (1)(b)
DREYFUS STRATEGIC INCOME
ARTICLES OF AMENDMENT
Dreyfus Strategic Income, a business trust formed by an
Agreement and Declaration of Trust dated July 24, 1985, pursuant
to the laws of the Commonwealth of Massachusetts (the "Trust"),
hereby certifies to the Secretary of State of the Commonwealth
of Massachusetts that:
FIRST: The Agreement and Declaration of Trust of the
Trust is hereby amended by striking out Article I, Section 1 and
inserting in lieu thereof the following:
"Section 1. Name. This Trust shall
be known as 'Dreyfus Income Funds.'"
SECOND: The amendment to the Agreement and Declaration
of Trust herein made was duly approved by at least a majority of
the Trustees of the Trust at a meeting held on December 6, 1995
pursuant to Article IX, Section 9 of the Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, Dreyfus Strategic Income has caused
these Articles to be signed in its name and on its behalf by the
undersigned Trustees.
DREYFUS STRATEGIC INCOME
David W. Burke, Trustee
Joseph S. DiMartino, Trustee
Diane Dunst, Trustee
Rosalind Gersten Jacobs, Trustee
Jay I. Meltzer, Trustee
Daniel Rose, Trustee
Warren B. Rudman, Trustee
Sander Vanocur, Trustee
<PAGE>
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 6th day of December, 1995, before me
personally
came the above-named Trustees of the Fund, to me known, and
known
to me to be the persons described in and who executed the
foregoing instrument, and who duly acknowledged to me that they
had executed the same.
_______________________
Notary Public
<PAGE>
Exhibit (2)
BY-LAWS
OF
DREYFUS INCOME FUNDS
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1. Agreement and Declaration of Trust. These
By-Laws shall be subject to the Agreement and Declaration of
Trust, as from time to time in effect (the "Declaration of
Trust"), of the
above-captioned Massachusetts business trust established by the
Declaration of Trust (the "Trust").
1.2. Principal Office of the Trust. The principal
office of the Trust shall be located in New York, New York. Its
resident agent in Massachusetts shall be CT Corporation System,
2 Oliver Street, Boston, Massachusetts, or such other person as
the Trustees from time to time may select.
ARTICLE 2
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the
Trustees may be held without call or notice at such places and
at such times as the Trustees from time to time may determine,
provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees.
2.2. Special Meetings. Special meetings of the
Trustees may be held at any time and at any place designated in
the call of the meeting when called by the President or the
Treasurer or by two or more Trustees, sufficient notice thereof
being given to each Trustee by the Secretary or an Assistant
Secretary or by the officer or the Trustees calling the meeting.
2.3. Notice of Special Meetings. It shall be
sufficient notice to a Trustee of a special meeting to send
notice by mail at least forty-eight hours or by telegram at
least
twenty-four hours before the meeting addressed to the Trustee at
his or her usual or last known business or residence address or
to give
notice to him or her in person or by telephone at least twenty-
four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by
him or her before or after the meeting, is filed with the
records
of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack
of notice
to him or her. Neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.
2.4. Notice of Certain Actions by Consent. If in
accordance with the provisions of the Declaration of Trust any
action is taken by the Trustees by a written consent of less
than all of the Trustees, then prompt notice of any such action
shall
be furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall
not be impaired by any delay or failure to furnish such notice.
ARTICLE 3
Officers
3.1. Enumeration; Qualification. The officers of the
Trust shall be a President, a Treasurer, a Secretary, and such
other officers, if any, as the Trustees from time to time may in
their discretion elect. The Trust also may have such agents as
the Trustees from time to time may in their discretion appoint.
Officers may be but need not be a Trustee or shareholder. Any
two or more offices may be held by the same person.
3.2. Election. The President, the Treasurer and the
Secretary shall be elected by the Trustees upon the occurrence
of any vacancy in any such office. Other officers, if any, may
be elected or appointed by the Trustees at any time. Vacancies
in any such other office may be filled at any time.
3.3. Tenure. The President, Treasurer and Secretary
shall hold office in each case until he or she sooner dies,
resigns, is removed or becomes disqualified. Each other officer
shall hold office and each agent shall retain authority at the
pleasure of the Trustees.
3.4. Powers. Subject to the other provisions of these
By-Laws, each officer shall have, in addition to the duties and
powers herein and in the Declaration of Trust set forth, such
duties and powers as commonly are incident to the office
occupied
by him or her as if the Trust were organized as a Massachusetts
business corporation or such other duties and powers as the
Trustees may from time to time designate.
3.5. President. Unless the Trustees otherwise
provide, the President shall preside at all meetings of the
shareholders and of the Trustees. Unless the Trustees otherwise
provide, the President shall be the chief executive officer.
3.6. Treasurer. The Treasurer shall be the chief
financial and accounting officer of the Trust, and, subject to
the provisions of the Declaration of Trust and to any
arrangement
made by the Trustees with a custodian, investment adviser or
manager,
or transfer, shareholder servicing or similar agent, shall be in
charge of the valuable papers, books of account and accounting
records of the Trust, and shall have such other duties and
powers as may be designated from time to time by the Trustees or
by the President.
3.7. Secretary. The Secretary shall record all
proceedings of the shareholders and the Trustees in books to be
kept therefor, which books or a copy thereof shall be kept at
the
principal office of the Trust. In the absence of the Secretary
from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a
temporary Secretary chosen at such meeting shall record the
proceedings thereof in the aforesaid books.
3.8. Resignations and Removals. Any Trustee or
officer may resign at any time by written instrument signed by
him or her and delivered to the President or Secretary or to a
meeting of the
Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. The
Trustees may
remove any officer elected by them with or without cause.
Except to the extent expressly provided in a written agreement
with the Trust, no Trustee or officer resigning and no officer
removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to
damages on account of such removal.
ARTICLE 4
Committees
4.1. Appointment. The Trustees may appoint from
their number an executive committee and other committees.
Except
as the Trustees otherwise may determine, any such committee may
make rules for conduct of its business.
4.2. Quorum; Voting. A majority of the members of any
Committee of the Trustees shall constitute a quorum for the
transaction of business, and any action of such a Committee may
be taken at a meeting by a vote of a majority of the members
present (a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the
time and in the manner required by the Declaration of Trust or
any applicable law. Officers and Committees shall render such
additional reports as they may deem desirable or as may from
time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
The fiscal year of the Trust shall be fixed, and shall
be subject to change, by the Board of Trustees.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced
die with the word "Massachusetts," together with the name of the
Trust and the year of its organization cut or engraved thereon
but, unless otherwise required by the Trustees, the seal shall
not be
necessary to be placed on, and in its absence shall not impair
the validity of, any document, instrument or other paper
executed
and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases
may authorize the execution thereof in some other manner, all
deeds, leases, contracts, notes and other obligations made by
the Trustees shall be signed by the President, any Vice
President, or by the Treasurer and need not bear the seal of the
Trust.
ARTICLE 9
Issuance of Share Certificates
9.1. Sale of Shares. Except as otherwise determined by
the Trustees, the Trust will issue and sell for cash or
securities from time to time, full and fractional shares of its
shares of beneficial interest, such shares to be issued and sold
at a price
of not less than net asset value per share as from time to time
determined in accordance with the Declaration of Trust and these
By-Laws and, in the case of fractional shares, at a
proportionate
reduction in such price. In the case of shares sold for
securities, such securities shall be valued in accordance with
the provisions for determining value of assets of the Trust as
stated in the Declaration of Trust and these By-Laws. The
officers of the Trust are severally authorized to take all such
actions as may
be necessary or desirable to carry out this Section 9.1.
9.2. Share Certificates. In lieu of issuing
certificates for shares, the Trustees or the transfer agent
either may issue receipts therefor or may keep accounts upon the
books of the Trust for the record holders of such shares, who
shall in either case, for all purposes hereunder, be deemed to
be
the holders of certificates for such shares as if they had
accepted
such certificates and shall be held to have expressly assented
and agreed to the terms hereof.
The Trustees at any time may authorize the issuance of
share certificates. In that event, each shareholder shall be
entitled to a certificate stating the number of shares owned by
him, in such form as shall be prescribed from time to time by
the
Trustees. Such certificate shall be signed by the President or
Vice President and by the Treasurer or Assistant Treasurer.
Such signatures may be facsimile if the certificate is signed by
a transfer agent, or by a registrar, other than a Trustee,
officer
or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate
shall cease to be such officer before such certificate is
issued,
it may be issued by the Trust with the same effect as if he or
she were such officer at the time of its issue.
9.3. Loss of Certificates. The Trust, or if any
transfer agent is appointed for the Trust, the transfer agent
with the approval of any two officers of the Trust, is
authorized
to issue and countersign replacement certificates for the shares
of the Trust which have been lost, stolen or destroyed subject
to
the deposit of a bond or other indemnity in such form and with
such security, if any, as the Trustees may require.
9.4. Discontinuance of Issuance of Certificates. The
Trustees at any time may discontinue the issuance of share
certificates and by written notice to each shareholder, may
require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.
ARTICLE 10
Indemnification
10.1. Trustees, Officers, etc. The Trust shall
indemnify each of its Trustees and officers (including persons
who serve at the Trust's request as directors, officers or
trustees of
another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as
a "Covered Person") against all liabilities and expenses,
including
but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees
reasonably
incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether
civil
or criminal, before any court or administrative or legislative
body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may
be
or may have been threatened, while in office or thereafter, by
reason of being or having been such a Trustee or officer, except
with respect to any matter as to which such Covered Person shall
have been finally adjudicated in a decision on the merits in any
such action, suit or other proceeding not to have acted in good
faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust and except that no
Covered
Person shall be indemnified against any liability to the Trust
or
its Shareholders to which such Covered Person would otherwise be
subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including
counsel fees so incurred by any such Covered Person (but
excluding
amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Trust
in
advance of the final disposition or any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of
such
Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is
not
authorized under this Article, provided that (a) such Covered
Person shall provide security for his undertaking, (b) the Trust
shall be insured against losses arising by reason of such
Covered Person's failure to fulfill his undertaking, or (c) a
majority of
the Trustees who are disinterested persons and who are not
Interested Persons (as that term is defined in the Investment
Company Act of 1940) (provided that a majority of such Trustees
then in office act on the matter), or independent legal counsel
in
a written opinion, shall determine, based on a review of readily
available facts (but not a full trial-type inquiry), that there
is reason to believe such Covered Person ultimately will be
entitled to indemnification.
10.2. Compromise Payment. As to any matter disposed
of (whether by a compromise payment, pursuant to a consent
decree
or otherwise) without an adjudication in a decision on the
merits
by a court, or by any other body before which the proceeding was
brought, that such Covered Person either (a) did not act in good
faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust or (b) is liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office,
indemnification shall be provided if (a) approved as in the best
interest of the Trust, after notice that it involves such
indemnification, by at least a majority of the Trustees who are
disinterested persons and are not Interested Persons (provided
that a majority of such Trustees then in office act on the
matter), upon a determination, based upon a review of readily
available facts (but not a full trial-type inquiry) that such
Covered Person acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Trust and is not liable to the Trust or its Shareholders by
reason
of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered
Person's office, or (b) there has been obtained an opinion in
writing of independent legal counsel, based upon a review of
readily available facts (but not a full trial-type inquiry) to
the
effect that such Covered Person appears to have acted in good
faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust and that such
indemnification would not protect such Covered Person against
any
liability to the Trust to which such Covered Person would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his office. Any approval pursuant to this
Section
shall not prevent the recovery from any Covered Person of any
amount paid to such Covered Person in accordance with this
Section
as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered
Person's action was in the best interests of the Trust or to
have
been liable to the Trust or its shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard
of
the duties involved in the conduct of such Covered Person's
office.
10.3. Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or
affect any other rights to which any such Covered Person may be
entitled. As used in this Article 10, the term "Covered Person"
shall include such person's heirs, executors and administrators,
and a "disinterested person" is a person against whom none of
the
actions, suits or other proceedings in question or another
action,
suit, or other proceeding on the same or similar grounds is then
or has been pending. Nothing contained in this article shall
affect any rights to indemnification to which personnel of the
Trust, other than Trustees and officers, and other persons may
be
entitled by contract or otherwise under law, nor the power of
the Trust to purchase and maintain liability insurance on behalf
of such person.
10.4. Limitation. Notwithstanding any provisions in
the Declaration of Trust and these By-Laws pertaining to
indemnification, all such provisions are limited by the
following
undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
In the event that a claim for
indemnification is asserted by a Trustee,
officer or controlling person of the Trust in
connection with the registered securities of
the Trust, the Trust will not make such
indemnification unless (i) the Trust has
submitted, before a court or other body, the
question of whether the person to be
indemnified was liable by reason of 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 Trust shall have obtained a
reasonable determination, based upon a review
of the facts, that such person was not liable
by virtue of such conduct, by (a) the vote of
a majority of Trustees who are neither
interested persons as such term is defined in
the Investment Company Act of 1940, nor
parties to the proceeding or (b) an
independent legal counsel in a written
opinion.
The Trust will not advance attorneys'
fees or other expenses incurred by the person
to be indemnified unless the Trust shall have
(i) received an undertaking by or on behalf of
such person to repay the advance unless it is
ultimately determined that such person is
entitled to indemnification and one of the
following conditions shall have occurred:
(x) such person shall provide security for his
undertaking, (y) the Trust shall be insured
against losses arising by reason of any lawful
advances or (z) a majority of the
disinterested, non-party Trustees of the
Trust, or an independent legal counsel in a
written opinion, shall have determined that
based on a review of readily available facts
there is reason to believe that such person
ultimately will be found entitled to
indemnification.
ARTICLE 11
Shareholders
11.1. Meetings. A meeting of the shareholders shall be
called by the Secretary whenever ordered by the Trustees, or
requested in writing by the holder or holders of at least 10% of
the outstanding shares entitled to vote at such meeting. If the
meeting is a meeting of the shareholders of one or more series
or
class of shares, but not a meeting of all shareholders of the
Trust, then only the shareholders of such one or more series or
classes shall be entitled to notice of and to vote at the
meeting.
If the Secretary, when so ordered or requested, refuses or
neglects for more than five days to call such meeting, the
Trustees, or the shareholders so requesting may, in the name of
the Secretary, call the meeting by giving notice thereof in the
manner required when notice is given by the Secretary.
11.2. Access to Shareholder List. Shareholders of
record may apply to the Trustees for assistance in communicating
with other shareholders for the purpose of calling a meeting in
order to vote upon the question of removal of a Trustee. When
ten or more shareholders of record who have been such for at
least six
months preceding the date of application and who hold in the
aggregate shares having a net asset value of at least $25,000 or
at least 1% of the outstanding shares, whichever is less, so
apply, the Trustees shall within five business days either:
(i) afford to such applicants access to a list of
names and addresses of all shareholders as recorded on the books
of the Trust; or
(ii) inform such applicants of the approximate
number of shareholders of record and the approximate cost of
mailing material to them and, within a reasonable time
thereafter,
mail, materials submitted by the applicants, to all such
shareholders of record. The Trustees shall not be obligated to
mail materials which they believe to be misleading or in
violation of applicable law.
11.3. Record Dates. For the purpose of determining the
shareholders of any series or class who are entitled to vote or
act at any meeting or any adjournment thereof, or who are
entitled
to receive payment of any dividend or of any other distribution,
the Trustees from time to time may fix a time, which shall be
not
more than 90 days before the date of any meeting of shareholders
or the date of payment of any dividend or of any other
distribution, as the record date for determining the
shareholders
of such series or class having the right to notice of and to
vote at such meeting and any adjournment thereof or the right to
receive such dividend or distribution, and in such case only
shareholders of record on such record date shall have such right
notwithstanding any transfer of shares on the books of the Trust
after the record date; or without fixing such record date the
Trustees may for any such purposes close the register or
transfer books for all or part of such period.
11.4. Place of Meetings. All meetings of the
shareholders shall be held at the principal office of the Trust
or at such other place within the United States as shall be
designated by the Trustees or the President of the Trust.
11.5. Notice of Meetings. A written notice of each
meeting of shareholders, stating the place, date and hour and
the
purposes of the meeting, shall be given at least ten days before
the meeting to each shareholder entitled to vote thereat by
leaving such notice with him or at his residence or usual place
of business or by mailing it, postage prepaid, and addressed to
such
shareholder at his address as it appears in the records of the
Trust. Such notice shall be given by the Secretary or an
Assistant Secretary or by an officer designated by the Trustees.
No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or
after the meeting by such shareholder or his attorney thereunto
duly authorized, is filed with the records of the meeting.
11.6. Ballots. No ballot shall be required for any
election unless requested by a shareholder present or
represented at the meeting and entitled to vote in the election.
11.7. Proxies. Shareholders entitled to vote may vote
either in person or by proxy in writing dated not more than six
months before the meeting named therein, which proxies shall be
filed with the Secretary or other person responsible to record
the
proceedings of the meeting before being voted. Unless otherwise
specifically limited by their terms, such proxies shall entitle
the holders thereof to vote at any adjournment of such meeting
but shall not be valid after the final adjournment of such
meeting.
ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any
meeting of the Trustees, or by one or more writings signed by
such a majority.
Dated: September 11, 1986
Amended: December 6, 1995
<PAGE>
Exhibit (5)
MANAGEMENT AGREEMENT
DREYFUS INCOME FUNDS
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, December 6, 1995
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series"),
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and
reinvesting the same in investments of the type and in
accordance
with the limitations specified in its charter documents and in
its Prospectus and Statement of Additional Information as from
time to time in effect, copies of which have been or will be
submitted to you, and in such manner and to such extent as from
time to time may be approved by the Fund's Board. The Fund
desires to employ you to act as its investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons
may be officers or employees who are employed by both you and
the Fund. The compensation of such person or persons shall be
paid by you and no obligation may be incurred on the Fund's
behalf in any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of each Series'
portfolio in accordance with such Series' investment objectives
and policies as stated in the Fund's Prospectus and Statement of
Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise each Series' investments and conduct
a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of such Series' assets. You
will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or
contemplate
purchasing, as the Fund may reasonably request. The Fund wishes
to be informed of important developments materially affecting
any
Series' portfolio and shall expect you, on your own initiative,
to furnish to the Fund from time to time such information as you
may believe appropriate for this purpose.
In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to each Series'
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of each Series'
shares; and generally assist in all aspects of the Fund's
operations. You shall have the right, at your expense, to
engage
other entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees
as an inducement to your undertaking the same that you shall not
be liable hereunder for any error of judgment or mistake of law
or for any loss suffered by one or more Series, provided that
nothing herein shall be deemed to protect or purport to protect
you against any liability to the Fund or a Series or to its
security holders to which you would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in
the performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the rate set forth opposite each Series'
name
on Schedule 1 hereto. Net asset value shall be computed on such
days and at such time or times as described in the Fund's then-
current Prospectus and Statement of Additional Information. The
fee for the period from the date of the commencement of the
public sale of a Series' shares to the end of the month during
which such sale shall have been commenced shall be pro-rated
according to the proportion which such period bears to the full
monthly period, and upon any termination of this Agreement
before
the end of any month, the fee for such part of a month shall be
pro-rated according to the proportion which such period bears to
the full monthly period and shall be payable upon the date of
termination of this Agreement.
For the purpose of determining fees payable to you, the
value of each Series' net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions paid
on securities sold short, brokerage fees and commissions, if
any,
fees of Board members who are not your officers, directors or
employees or holders of 5% or more of your outstanding voting
securities, Securities and Exchange Commission fees and state
Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs
attributable to investor services (including, without
limitation,
telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and
any extraordinary expenses.
As to each Series, if in any fiscal year the aggregate
expenses of the Fund (including fees pursuant to this Agreement,
but excluding interest, taxes, brokerage and, with the prior
written consent of the necessary state securities commissions,
extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Series, the Fund may deduct
from the fees to be paid hereunder, or you will bear, such
excess
expense to the extent required by state law. Your obligation
pursuant hereto will be limited to the amount of your fees here-
under. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as the case may be,
on a monthly basis.
The Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to one
or more other investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so
acting, provided that when the purchase or sale of securities of
the same
issuer is suitable for the investment objectives of two or more
companies or accounts managed by you which have available funds
for investment, the available securities will be allocated in a
manner believed by you to be equitable to each company or
account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by one or more
Series or the size of the position obtainable for or disposed of
by one or more Series.
In addition, it is understood that the persons employed
by you to assist in the performance of your duties hereunder
will
not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection
with the matters to which this Agreement relates, except for a
loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or
from
reckless disregard by you of your obligations and duties under
this Agreement. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even
though paid by you.
As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproval Date") and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940) of such Series' outstanding voting securities,
provided that in either event its continuance also is approved
by
a majority of the Fund's Board members who are not "interested
persons" (as defined in said Act) of any party to this
Agreement,
by vote cast in person at a meeting called for the purpose of
voting on such approval. As to each Series, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series' shares
or, upon not less than 90 days' notice, by you. This Agreement
also will terminate automatically, as to the relevant Series, in
the event of its assignment (as defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations,
business trusts, partnerships or other entities (including other
investment companies) and that such other entities may include
the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into investment advisory
or other agreements with such other entities. If you cease to
act as the Fund's investment adviser, the Fund agrees that, at
your request, the Fund will take all necessary action to change
the name of the Fund to a name not including "Dreyfus" in any
form or combination of words.
This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS INCOME FUNDS
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
<PAGE>
SCHEDULE 1
Annual Fee as
a Percentage
of Average
Daily Net
Name of Series Assets Reapproval Date Reapproval
Day
Dreyfus Equity
Dividend Fund .75% September 11, 1997 September 11th
Dreyfus High Yield
Bond Fund .65% September 11, 1997 September 11th
Dreyfus Strategic
Income Fund .60% September 11, 1996 September 11th
<PAGE>
Exhibit (6)
DISTRIBUTION AGREEMENT
DREYFUS INCOME FUNDS
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, December 6, 1995
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the agree-
ments hereinafter contained, the above-named investment company
(the "Fund") has agreed that you shall be, for the period of
this agreement, the distributor of (a) shares of each Series of
the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes
of this agreement the term "Shares" shall mean the authorized
shares of the relevant Series, if any, and otherwise shall mean
the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities Act
of 1933, as amended, and will transmit promptly any orders
received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which the
Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit
orders for the sale of Shares. It is contemplated that you will
enter into sales or servicing agreements with securities
dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be furnished
by the Fund hereunder, and all expenses in connection with the
preparation and printing of the Fund's prospectuses and
statements of additional information for regulatory purposes and
for distribution to shareholders; provided, however, that
nothing contained herein shall be deemed to require the Fund to
pay any of the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents
and to furnish any and all information and otherwise to take all
actions which may be reasonably necessary in the discretion of
the Fund's officers in connection with the qualification of
Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such
qualification. You shall pay all expenses connected with your
own qualification as a dealer under state or Federal laws and,
except as otherwise specifically provided in this agreement, all
other expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for
use in connection with the sale of Shares, such information with
respect to the Fund or any relevant Series and the Shares as you
may reasonably request, all of which shall be signed by one or
more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information,
when so signed by the Fund's officers, shall be true and
correct. The Fund also shall furnish you upon request with:
(a) semi-annual reports and annual audited reports of the Fund's
books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings
statements prepared by the Fund, (c) a monthly itemized list of
the securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition
as you may reasonably request.
1.8 The Fund represents to you that all registration
statements and prospectuses filed by the Fund with the Securi-
ties and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as
amended, with respect to the Shares have been carefully prepared
in conformity with the requirements of said Acts and rules and
regulations of the Securities and Exchange Commission there-
under. As used in this agreement the terms "registration state-
ment" and "prospectus" shall mean any registration statement and
prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and
Exchange Commission and any amendments and supplements thereto
which at any time shall have been filed with said Commission.
The Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be
stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact
contained in any such registration statement and prospectus will
be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Fund may but
shall not be obligated to propose from time to time such amend-
ment or amendments to any registration statement and such
supplement or supplements to any prospectus as, in the light of
future developments, may, in the opinion of the Fund's counsel,
be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from
you to do so, you may, at your option, terminate this agreement
or decline to make offers of the Fund's securities until such
amendments are made. The Fund shall not file any amendment to
any registration statement or supplement to any prospectus
without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to
any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in
the form furnished to you from time to time, in connection with
the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person
who controls you within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which you, your officers and directors, or any such con-
trolling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or
based upon any untrue statement, or alleged untrue statement, of
a material fact contained in any registration statement or any
prospectus or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated
in either any registration statement or any prospectus or
necessary to make the statements in either thereof not
misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such control-
ling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its address set forth above within ten days after
the summons or other first legal process shall have been served.
The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain counsel
of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
elect to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the controlling
person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or
them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and their
successors. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund,
its several officers and Board members, and any person who con-
trols the Fund within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933,
as amended, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting
from such claims or demands, shall arise out of or be based upon
any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration
statement or in the corresponding statements made in the pro-
spectus, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with
such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the
Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification
to be given by letter or telegram addressed to you at your
address set forth above within ten days after the summons or
other first legal process shall have been served. You shall
have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or
omission on your part, and in any other event the Fund, its
officers or Board members, or such controlling person shall each
have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which
you may have to the Fund, its officers or Board members, or to
such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement contained in this
paragraph 1.10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's
officers and Board members, and their respective estates, and to
the benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the
Fund under any of the provisions of this agreement and no orders
for the purchase or sale of such Shares hereunder shall be
accepted by the Fund if and so long as the effectiveness of the
registration statement then in effect or any necessary amend-
ments thereto shall be suspended under any of the provisions of
the Securities Act of 1933, as amended, or if and so long as a
current prospectus as required by Section 10 of said Act, as
amended, is not on file with the Securities and Exchange
Commission; provided, however, that nothing contained in this
paragraph 1.11 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to repurchase any
Shares from any shareholder in accordance with the provisions of
the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement
or prospectus then in effect or for additional
information;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending
the effectiveness of the registration statement or pro-
spectus then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the
registration statement or prospectus then in effect or
which requires the making of a change in such registra-
tion statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments to
any registration statement or prospectus which may from
time to time be filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you
shall be offered for sale at a price per share (the "offering
price") approximately equal to (a) their net asset value
(determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred
sales charge as set forth in the Fund's then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate Reapproval Date shall be specified
on Exhibit A for each Series), and thereafter shall continue
automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A
hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as to
the Fund or relevant Series, as the case may be, in the event of
its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares, you
shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons employed by
you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
DREYFUS INCOME FUNDS
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
<PAGE>
EXHIBIT A
Name of Series Reapproval Date Reapproval Day
Dreyfus Equity
Dividend Fund September 11, 1997 September 11th
Dreyfus High
Yield Bond Fund September 11, 1997 September 11th
Dreyfus Strategic
Income Fund September 11, 1996 September 11th
<PAGE>
Exhibit (8)
CUSTODY AGREEMENT
Custody Agreement made as of February 8, 1990, as
amended and restated December 6, 1995 between DREYFUS INCOME
FUNDS, a business trust organized and existing under the laws of
the Commonwealth of Massachusetts, having its principal office
and
place of business at 200 Park Avenue, New York, New York 10166
(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 90 Washington Street,
New York, New York 10286 (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 Fund's Board 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 para-
graph 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 Board 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, as amended,
its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of
the Fund's Board 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 with respect to a party, the
consolidation or amalgamation with, merger into, or transfer of
all or substantially all of such party's assets to, another
entity, where such party is not the surviving entity.
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
ordinarily 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 Fund's Board
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. "Series" shall mean (i) the Series of the Fund
specified on Appendix D hereto, or, where the context requires
each such Series, or (ii) if no Series are set forth on such
Appendix, the Fund.
30. "Shares" shall mean the shares of beneficial
interest of the Fund, each of which, in the case of a Fund
having Series, is allocated to a particular Series.
31. "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.
32. "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.
33. "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 any Series, including cash received for the issuance of such
Series' shares, at any time during the period of this Agreement
and shall specify the Series, if any, to which the same are to
be
specifically allocated. 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 a
Series' 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 Fund's Board 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 a Series in the Depository,
the Fund shall deliver to the Custodian a certified resolution
of
the Fund's Board 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 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 such Series
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 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 for each Series all moneys received by it
for the account of the Fund, with respect to such Series. Money
credited to the separate account for a Series shall be disbursed
by the Custodian 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, the
Series account from which 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 each Series
during said day. Where Securities are transferred to the
account
of a Series, the Custodian shall also by book-entry or otherwise
identify as belonging to such Series 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 each Series under this Agreement.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held for a Series,
which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held
by the Custodian in that form; all other Securities held for a
Series
may be registered in the name of such Series, in the name of 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 a Series and which may from time to
time be registered in the name of such Series. 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 such Series 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 each Series 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 l940, 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 each Series 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 Series in
exchange for other Securities or cash issued or paid in
connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
(c) Deliver any Securities held for the Series 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 Series 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 Series to which the Securities purchased are to be
specifically allocated; (b) the name of the issuer and the title
of the Securities; (c) the number of shares or the principal
amount purchased and accrued interest, if any; (d) the date of
purchase and settlement; (e) the purchase price per unit; (f)
the
total amount payable upon such purchase; (g) 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 (h) the name of
the broker to which payment is to be made. The Custodian shall,
upon receipt of Securities purchased by or for such Series, pay
out of the moneys held for the account of such Series 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 Series to which such
Securities sold were specifically allocated; (b) the name of the
issuer and the title of the Security; (c) the number of shares
or principal amount sold, and accrued interest, if any; (d) the
date of sale; (e) the sale price per unit; (f) the total amount
payable
to such Series upon such sale; (g) 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 (h) 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 for the account of such Series 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
Series
to which the Option purchased is to be specifically allocated;
(b) the type of Option (put or call); (c) 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;
(d) the expiration date; (e) the exercise price; (f) the dates
of purchase and settlement; (g) the total amount payable by the
Fund for the account of such Series in connection with such
purchase; (h) the name of the Clearing Member through which such
Option was
purchased; and (i) 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 such Series,
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 Series to which the Option sold was specifically
allocated; (b) the type of Option (put or call); (c) 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; (d) the date of sale; (e) the sale price; (f) the date of
settlement; (g) the total amount payable to the Fund for the
account of such Series upon such sale; and (h) 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 for the account of such Series, 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 Series to which the Call
Option exercised was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Call
Option; (c) the expiration date; (d) the date of exercise and
settlement; (e) the exercise price per share; (f) the total
amount
to be paid by the Fund for the account of such Series upon such
exercise; and (g) 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 such Series 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 Series to which the Put
Option exercised was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Put
Option; (c) the expiration date; (d) the date of exercise and
settlement; (e) the exercise price per share; (f) the total
amount
to be paid to the Fund for the account of such Series upon such
exercise; and (g) 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 for the account
of such Series 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 Series to
which the Stock Index Option exercised was specifically
allocated;
(b) the type of Stock Index Option (put or call); (c) the number
of Options being exercised; (d) the stock index to which such
Option relates; (e) the expiration date; (f) the exercise price;
(g) the total amount to be received by the Fund for the account
of such Series in connection with such exercise; and (h) 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
Series to which the Covered Call Option written is to be
specifically allocated; (b) 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; (c) the expiration date; (d) the
exercise price; (e) the premium to be received by the Fund for
the account of such Series; (f) the date such Covered Call
Option
was written; and (g) 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 Series to which the Covered Call
Option exercised was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Covered
Call Option; (c) the Clearing Member to whom the underlying
Securities are to be delivered; and (d) the total amount payable
to the Fund for the account of such Series 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 Series to which the
Put
Option written is to be specifically allocated; (b) the name of
the issuer and the title and number of shares for which the Put
Option is written and which underlie the same; (c) the
expiration
date; (d) the exercise price; (e) the premium to be received by
the Fund for the account of such Series; (f) the date such Put
Option is written; (g) 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; (h) the amount of cash,
and/or the amount and kind of Securities, if any, to be
deposited
in the Segregated Security Account; and (i) 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 Series to which the Put Option exercised was specifically
allocated; (b) the name of the issuer and title and number of
shares subject to the Put Option; (c) the Clearing Member from
which the underlying Securities are to be received; (d) the
total
amount payable by the Fund upon such delivery; (e) the amount of
cash and/or the amount and kind of Securities to be withdrawn
from
the Collateral Account; and (f) 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 such Series
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) the
Series to which the Stock Index Option written is to be
specifically allocated; (b) whether such Stock Index Option is a
put or a call; (c) the number of Options written; (d) the stock
index to which such Option relates; (e) the expiration date;
(f) the exercise price; (g) the Clearing Member through which
such
Option was written; (h) the premium to be received by the Fund
for
the account of such Series; (i) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the
Segregated Security Account; (j) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the
Collateral Account; and (k) 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) the Series to which the Stock Index Option exercised was
specifically allocated; (b) such information as may be necessary
to identify the Stock Index Option being exercised; (c) the
Clearing Member through which such Stock Index Option is being
exercised; (d) the total amount payable upon such exercise, and
whether such amount is to be paid by or to the Fund for the
account of such Series; (e) the amount of cash and/or amount and
kind of Securities, if any, to be withdrawn from the Margin
Account; and (f) 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) the Series to which the Option purchased
is
to be specifically allocated; (b) that the transaction is a
Closing Purchase Transaction; (c) 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; (d) the exercise price;
(e) the premium to be paid by the Fund for the account of such
Series; (f) the expiration date; (g) the type of Option (put or
call); (h) the date of such purchase; (i) the name of the
Clearing
Member to which the premium is to be paid; and (j) 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 for the account of a Series 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 Series
to which the Futures Contract entered into is to be specifically
allocated; (b) the category of Futures Contract (the name of the
underlying stock index or financial instrument); (c) the number
of identical Futures Contracts entered into; (d) the delivery or
settlement date of the Futures Contract(s); (e) the date the
Futures Contract(s) was (were) entered into and the maturity
date;
(f) whether the Fund is buying (going long) or selling (going
short) on such Futures Contract(s); (g) the amount of cash
and/or
the amount and kind of Securities, if any, to be deposited in
the Segregated Security Account; (h) the name of the broker,
dealer or
futures commission merchant through which the Futures Contract
was entered into; and (i) 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. Any variation margin payment or similar payment
required to be made by the Fund for the account of a Series 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 Series to which the
Futures Contract retained is to be specifically allocated; (b)
the
Futures Contract; (c) 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; (d) the
broker,
dealer or futures commission merchant to or from which payment
or delivery is to be made or received; and (e) 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 Series to which the offsetting Futures
Contract is to be specifically allocated; (b) the items of
information required in a Certificate described in paragraph 1
of
this Article, and (c) 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 for the account
of such Series 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 Series to which the Futures Contract Option
purchased is to be specifically allocated; (b) the type of
Futures
Contract Option (put or call); (c) the type of Futures Contract
and such other information as may be necessary to identify the
Futures Contract underlying the Futures Contract Option
purchased;
(d) the expiration date; (e) the exercise price; (f) the dates
of
purchase and settlement; (g) the amount of premium to be paid by
the Fund for the account of such Series upon such purchase; (h)
the name of the broker or futures commission merchant through
which such option was purchased; and (i) 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 Series to
which the Futures Contract Option sold was specifically
allocated;
(b) the type of Futures Contract Option (put or call); (c) the
type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the
Futures
Contract Option; (d) the date of sale; (e) the sale price; (f)
the
date of settlement; (g) the total amount payable to the Fund for
the account of such Series upon such sale; and (h) 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 for the
account
of such Series, 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 Series to which the Futures Contract Option exercised
was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures
Contract
underlying the Futures Contract Option; (d) the date of
exercise;
(e) the name of the broker or futures commission merchant
through which the Futures Contract Option is exercised; (f) the
net total
amount, if any, payable by the Fund; (g) the amount, if any, to
be received by the Fund for the account of such Series; and (h)
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 Series to which the Futures Contract Option written is to be
specifically allocated; (b) the type of Futures Contract Option
(put or call); (c) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the expiration date;
(e) the exercise price; (f) the premium to be received by the
Fund
for the account of such Series; (g) the name of the broker or
futures commission merchant through which the premium is to be
received; and (h) 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 Series to
which the Futures Contract Option exercised was specifically
allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract
Option; (d) the name of the broker or futures commission
merchant
through which such Futures Contract Option was exercised; (e)
the
net total amount, if any, payable to the Fund for the account of
such Series upon such exercise; (f) the net total amount, if
any,
payable by the Fund for the account of such Series upon such
exercise; 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, upon its receipt of the net total amount
payable to the Fund for the account of such Series, 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 Series to which the Futures Contract Option exercised was
specifically allocated; (b) the particular Futures Contract
Option
exercised; (c) the type of Futures Contract underlying such
Futures Contract Option; (d) the name of the broker or futures
commission merchant through which such Futures Contract Option
is
exercised; (e) the net total amount, if any, payable to the Fund
for the account of such Series upon such exercise; (f) the net
total amount, if any, payable by the Fund for the account of
such Series upon such exercise; and (g) 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 for the
account of such Series, 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) the Series to
which the Futures Contract Option purchased is to be
specifically
allocated; (b) that the transaction is a closing transaction;
(c)
the type of Futures Contract and such other information as may
be necessary to identify the Futures Contract underlying the
Futures
Contract Option; (d) the exercise price; (e) the premium to be
paid by the Fund for the account of such Series; (f) the
expiration date; (g) the name of the broker or futures
commission
merchant to which the premium is to be paid; and (h) 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
Series
to which the short sale is to be specifically allocated; (b) the
name of the issuer and the title of the Security; (c) the number
of shares or principal amount sold, and accrued interest or
dividends, if any; (d) the dates of the sale and settlement; (e)
the sale price per unit; (f) the total amount credited to the
Fund
for the account of such Series upon such sales, if any; (g) 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; (h)
the amount of cash and/or the amount and kind of Securities, if
any, to be deposited in a Segregated Security Account; and (i)
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 Series to which the short sale being closed-out was
specifically allocated; (b) the name of the issuer and the title
of the Security; (c) 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; (d) the dates of the
closing-out and settlement; (e) the purchase price per unit; (f)
the net total amount payable to the Fund for the account of such
Series upon such closing-out; (g) the net total amount payable
to the broker upon such closing-out; (h) the amount of cash and
the amount and kind of Securities to be withdrawn, if any, from
the Margin Account; (i) the amount of cash and/or the amount and
kind
of Securities, if any, to be withdrawn from the Segregated
Security Account; and (j) 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 for the
account of such Series 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 Series 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, on behalf of a Series,
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 Series to which the Reverse Repurchase Agreement is to
be
specifically allocated; (b) the total amount payable to the Fund
for the account of such Series in connection with such Reverse
Repurchase Agreement; (c) the broker or dealer through or with
which the Reverse Repurchase Agreement is entered; (d) the
amount
and kind of Securities to be delivered by the Fund to such
broker
or dealer; (e) the date of such Reverse Repurchase Agreement;
and
(f) 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 Series to which the Reverse Repurchase
Agreement terminated was specifically allocated; (b) the Reverse
Repurchase Agreement being terminated; (c) the total amount
payable by the Fund for the account of such Series in connection
with such termination; (d) the amount and kind of Securities to
be
received by the Fund for the account of such Series in
connection
with such termination; (e) the date of termination; (f) the name
of the broker or dealer with or through which the Reverse
Repurchase Agreement is to be terminated; and (g) 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 designated Series, 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 respect to each Series 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. For each Series, the Fund shall furnish to the
Custodian a copy of the resolution of the Fund's Board,
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 Series the total amount payable to the
Dividend Agent of the Fund.
ARTICLE XII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Series' Shares, the
Fund 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
such Series.
3. Upon issuance of any Series' Shares in accordance
with the foregoing provisions of this Article, the Custodian
shall
pay, out of the money held for the account of such Series, all
original issue or other taxes required to be paid by the Fund
for
the account of such Series 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 Series' Shares, the Fund 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 a Series' 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
such
Series 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 Series' Shares, whenever a Series' 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 a Series which results in an
overdraft
because the moneys held by the Custodian for the account of such
Series 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 in the account for such Series for some other
reason, or
if a Series 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 such Series 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 l/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 such Series
which have not been collected by the Custodian on behalf of such
Series
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 such Series or in which such Series 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 such Series' 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
in a Series' portfolio 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 Series to which the
borrowing relates; (b) the name of the bank; (c) 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; (d) the time and date, if known, on
which
the loan is to be entered into; (e) the date on which the loan
becomes due and payable; (f) the total amount payable to the
Fund
for the account of such Series on the borrowing date; (g) 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 (h) 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,
as amended, 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
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 Series, 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
organization documents and as disclosed in its most recent and
currently effective prospectus to lend the portfolio Securities
of a Series, 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
Series to which the Securities to be loaned are specifically
allocated; (b) the name of the issuer and the title of the
Securities; (c) the number of shares or the principal amount
loaned; (d) the date of loan and delivery; (e) the total amount
to be delivered to the Custodian against the loan of the
Securities,
including the amount of cash collateral and the premium, if any,
separately identified; and (f) the name of the broker, dealer or
financial institution to which the loan was made. 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
Series to which the Securities to be returned are specifically
allocated; (b) the name of the issuer and the title of the
Securities to be returned; (c) the number of shares or the
principal amount to be returned; (d) the date of termination;
(e)
the total amount to be delivered by the Custodian (including the
cash collateral for such Securities minus any offsetting credits
as described in said Certificate); and (f) the name of the
broker, dealer or financial institution from which the
Securities
will be
returned. The Custodian shall receive all Securities returned
from the broker, dealer, or financial institution to which such
Securities were loaned and upon receipt thereof shall pay, out
of the moneys held for the account of the Series specified in
the
Certificate, 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 are payable to or for the account of the
applicable Series
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 the Certificate, which shall, if requested by the
Custodian, be accompanied by an approving resolution of the
Fund's
Board adopted in accordance with Rule 17f-5 under the Investment
Company Act of 1940, as amended. Notwithstanding anything to
the
contrary contained in this Agreement, the Custodian shall hold
harmless and indemnify the Fund from and against any losses,
actions, claims, demands, expenses and proceedings, including
counsel fees, that occur as a result of any act or omission of
any Foreign Sub-Custodian or Depository with respect to the
safekeeping of moneys and securities of the Fund.
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
organization documents.
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, 1996 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 1 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 sub-
section (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 for which The Dreyfus
Corporation or any of its affiliates acts as the sole investment
adviser. 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 responsi-
bilities 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) Any 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 Fund's
Board, 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 Board, 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 hereto as Appendix A is a Certificate
setting forth the names 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 setting forth
the names 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, 13th Floor, New York, New York 10286, 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 offices at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, 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 Fund's Board.
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 Board.
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 has been executed on behalf of the
Fund by the undersigned officer of the Fund. The obligations of
this Agreement shall only be binding upon the assets and
property
of the Fund and shall not be binding upon any trustee, officer
or shareholder of the Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers, thereunto
duly authorized, as of the day and year first above written.
DREYFUS INCOME FUNDS
By:
Attest:
THE BANK OF NEW YORK
By:
Attest:
<PAGE>
Appendix A
<TABLE>
<CAPTION>
DREYFUS INCOME FUNDS
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN ACCOUNT
FOR PORTFOLIO SECURITIES TRANSACTIONS
Group I Group II
<S> <C> <C>
Frank Greene, Phyllis Paul R. Casti, Jr.
Meiner, Paul R. Casti, Jr., Jeffrey N. Nachman Thomas J. Durante
Thomas J. Durante, Jean Philip Toia James M.
Windels
Farley, Gregory S. Gruber, Lawrence Kash Paul T. Molloy
Paul T. Molloy, Jeffrey N. Joseph I. Connolly Jean Farley
Nachman, James M. Windels, Gregory S. Gruber
Anna Mancini and Mary
Kate Macchia
</TABLE>
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 no individual shall be
authorized to sign more than once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either
Group I or Group II, or both such Groups, except that
no
individual shall be authorized to sign more than once.
3. Other expenses of the Fund, over $5,000 but not over
$25,000:
Two (2) signatures required, one of which must be from
Group II, except that no individual shall be
authorized to sign more than once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or Group
II, including any one of the following: Paul R.
Casti,
Jr., James M. Windels, Jeffrey N. Nachman, Joseph I.
Connolly or Philip Toia, except that no individual
shall be
authorized to sign more than once.
Custodian Account for Portfolio Securities Transactions
Two (2) signatures required from any of the following:
Joseph I. Connolly, Philip Toia, Paul R. Casti,
Jr., Thomas J. Durante, Jean Farley, Gregory S. Gruber, Paul T.
Molloy, Jeffrey N. Nachman, James M. Windels, Mary Kate Macchia,
Robert Salviolo, Katya Jiminez, Paul Goerke, Christine O'Hara
and
Anna Mancini.
<PAGE>
Appendix B
DREYFUS INCOME FUNDS
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
Marie E. Connolly President and Treasurer
John E. Pelletier Vice President and Secretary
Frederick C. Dey Vice President and Assistant
Treasurer
Eric B. Fischman Vice President and Assistant
Secretary
Elizabeth Bachman Vice President and Assistant
Secretary
Joseph S. Tower, III Assistant Treasurer
John J. Pyburn Assistant Treasurer
Margaret Pardo Assistant Secretary
Timiothy M. Ghriskey Portfolio Manager
Garrit Kono Portfolio Manager
Kevin McClintock Portfolio Manager
Gerald Thunelius Portfolio Manager
Wolodymyr Wronskyj Portfolio Manager
Eric B. Fischman, Margaret Pardo,
Vice President Assistant Secretary
<PAGE>
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
The New York Times
Standard & Poor's Called Bond Record
The Wall Street Journal
<PAGE>
Appendix D
Name of Series
Dreyfus Equity Dividend Fund
Dreyfus High Yield Bond Fund
Dreyfus Strategic Income Fund
<PAGE>
Schedule A
The fees payable to the Custodian with respect to
securities held in domestic custody are annexed hereto.
<PAGE>
DREYFUS INCOME FUNDS
Domestic Custody Fees
Basic Fee: 1/100 of 1% per annum of the
first $500,000,000, and 1/200 of
1% of the excess over
$500,000,000 per annum of the
total market value of
domestic
securities held.
Custodial Transactions:
$8.00 per transaction for each receipt and delivery of
book entry securities through DTC/FRB.
$20.00 per transaction for physical settlements,
municipal sub-custodian settlements, writing options
(preparation of depository or escrow receipts) and initial
futures transactions.
$5.00 for futures variation margin maintenance.
$7.00 for P&I paydowns.
$10.00 for GNMA PTC settlements.
$200.00 for the collection of interest on securities
held in "street name".
<PAGE>
Schedule B
The fees payable to the Custodian with respect to
securities held in foreign custody are as set forth in a letter
dated January 13, 1995 from Jerome P. Isoldi of The Bank of New
York to Frederick C. Dey, a copy of which is attached hereto.
<PAGE>
THE BANK OF NEW YORK
90 Washington Street
New York, New York 10286
January 13, 1995
Mr. Frederick C. Dey
Assistant Treasurer
200 Park Avenue
New York, New York 10166
Re: Global Custody Fees
Dear Fred:
This letter is an update of my September 21, 1993 global
custody fee schedule letter addressed to Mr. Jeffrey Nachman for
the Dreyfus Family of Funds.
Safekeeping charges and transaction fees will be applied
per country, as indicated in the attached schedule.
Warmest regards.
Sincerely,
Jerome P. Isoldi
Senior Vice President
JPI/nd
Enclosure
<PAGE>
GLOBAL CUSTODY FEE PROPOSAL
THE DREYFUS FAMILY OF FUNDS
AUSTRALIA MEXICO (BONDS)
CANADA NETHERLANDS
FRANCE NEW ZEALAND
GERMANY SWEDEN
IRELAND SWITZERLAND
JAPAN
SAFEKEEPING FEE
12 b.p. PER ANNUM ON FIRST 250MM MARKET VALUE OF ASSETS
10 b.p. PER ANNUM ON NEXT 500MM
8 b.p. PER ANNUM ON EXCESS
TRANSACTION FEE
$50 FOR EACH TRANSACTION
CEDEL
SAFEKEEPING FEE
5 b.p. PER ANNUM ON MARKET VALUE OF ASSETS HELD
TRANSACTION FEE
$25 FOR EACH TRANSACTION
<PAGE>
GLOBAL CUSTODY FEE PROPOSAL
THE DREYFUS FAMILY OF FUNDS
SAFEKEEPING TRANSACTIONS
ARGENTINA 30 b.p. $ 75
AUSTRIA 8 b.p. 60
BANGLADESH 40 b.p. 170
BELGIUM 8 b.p. 75
BRAZIL * 45 b.p. 75
CHILE 35 b.p. 90
CHINA 25 b.p. 50
COLUMBIA 45 b.p. 125
CZECH REPUBLIC 50 b.p. 55
DENMARK 15 b.p. 75
FINLAND 10 b.p. 75
GREECE
Bond 25 b.p. 30
Equity 50 b.p. 450
HONG KONG 15 b.p. 100
HUNGARY 5 b.p. 75
INDIA 45 b.p. 125
INDONESIA 15 b.p. 75
ISRAEL 65 b.p. 45
ITALY 18 b.p. 75
KOREA 12.5 b.p. 25
LUXEMBOURG 6.5 b.p. 75
MALAYSIA 15 b.p. 100
MEXICO (EQUITIES) 25 b.p. 60
NORWAY 25 b.p. 125
PAKISTAN 40 b.p. 150
PERU 65 b.p. 175
PHILIPPINES 12.5 b.p. 150
POLAND 50 b.p. 150
PORTUGAL 25 b.p. 220
SINGAPORE 15 b.p. 150
SOUTH AFRICA 12.5 b.p. 150
SPAIN 8 b.p. 50
SRI LANKA 20 b.p. 60
TAIWAN 15 b.p. 150
THAILAND 18 b.p. 95
TURKEY 25 b.p. 60
UNITED KINGDOM 8 b.p. 50
URUGUAY ** 55 b.p. 75
VENEZUELA 45 b.p. 75
* Includes Local Administrator.
** $4,000 Per Year, Per Account.
OUT-OF-POCKET EXPENSES
TELEX, TELEPHONE, SECURITIES REGISTRATION, ETC., ARE IN ADDITION
TO THE ABOVE.
<PAGE>
Exhibit (9)
DREYFUS INCOME FUNDS
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Shareholder
Services Plan under which the Fund would pay the Fund's
distributor (the "Distributor") for providing services to (a)
shareholders of each series of the Fund or class of Fund shares
set forth on Exhibit A hereto, as such Exhibit may be revised
from time to time, or (b) if no series or classes are set forth
on such Exhibit, shareholders of the Fund. The Distributor
would
be permitted to pay certain financial institutions, securities
dealers and other industry professionals (collectively, "Service
Agents") in respect of these services. The Plan is not to be
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "Act"), and the fee under the Plan is
intended to be a "service fee" as defined in Article III,
Section 26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use Fund assets for such purposes.
In voting to approve the implementation of such a plan,
the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as follows:
1. The Fund shall pay to the Distributor a fee at
the annual rate set forth on Exhibit A in respect of the
provision of personal services to shareholders and/or the
maintenance of shareholder accounts. The Distributor shall
determine the amounts to be paid to Service Agents and the basis
on which such payments will be made. Payments to a Service
Agent
are subject
to compliance by the Service Agent with the terms of any related
Plan agreement between the Service Agent and the Distributor.
2. For the purpose of determining the fees payable
under this Plan, the value of the net assets of the Fund or the
net assets attributable to each series or class of Fund shares
identified on Exhibit A, as applicable, shall be computed in the
manner specified in the Fund's charter documents for the
computation of net asset value.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by a majority of the Board members, including a
majority of the Board members who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or
indirect financial
interest in the operation of this Plan or in any agreements
entered into in connection with this Plan, pursuant to a vote
cast in person at a meeting called for the purpose of voting on
the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board,
provided that any material amendments of the terms of this Plan
shall become effective only upon approval as provided in
paragraph 4 hereof.
7. This Plan is terminable without penalty at any
time by vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of
this Plan or in any agreements entered into in connection with
this Plan.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and
property of the Fund or the affected series or class, as the
case
may be, and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
Dated: July 19, 1995
Revised: December 6, 1995
<PAGE>
EXHIBIT A
Name of Series Fee as a Percentage of
Average Daily Net Assets
Dreyfus Equity Dividend Fund .25%
Dreyfus High Yield Bond Fund .25%
Dreyfus Strategic Income Fund .25%
<PAGE>
Exhibit (11)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Condensed Financial Information" and "Transfer and Dividend
Disbursing Agent, Custodian, Counsel and Independent Auditors"
and to the use of our report dated December 4, 1995, in this
Registration Statement (Form N-1A 33-7172) of Dreyfus Income
Funds (formerly Dreyfus Strategic Income).
ERNST & YOUNG LLP
New York, New York
December 22, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 299661
<INVESTMENTS-AT-VALUE> 314125
<RECEIVABLES> 12410
<ASSETS-OTHER> 345
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 326880
<PAYABLE-FOR-SECURITIES> 5969
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 566
<TOTAL-LIABILITIES> 6535
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 328173
<SHARES-COMMON-STOCK> 22520
<SHARES-COMMON-PRIOR> 24912
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<NET-INVESTMENT-INCOME> 21736
<REALIZED-GAINS-CURRENT> (8706)
<APPREC-INCREASE-CURRENT> 38489
<NET-CHANGE-FROM-OPS> 51519
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 21736
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1300
<NUMBER-OF-SHARES-REDEEMED> 4865
<SHARES-REINVESTED> 1173
<NET-CHANGE-IN-ASSETS> (2142)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (13586)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 1899
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3292
<AVERAGE-NET-ASSETS> 316475
<PER-SHARE-NAV-BEGIN> 12.95
<PER-SHARE-NII> .93
<PER-SHARE-GAIN-APPREC> 1.27
<PER-SHARE-DIVIDEND> .93
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.22
<EXPENSE-RATIO> .010
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
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