<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
DREYFUS NEW YORK TAX EXEMPT INTERMEDIATE BOND FUND
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(Name of Registrant as Specified In Its Charter)
DREYFUS NEW YORK TAX EXEMPT INTERMEDIATE BOND FUND
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- - - - - - - - --------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: 1934 Act Filings
Gentlemen:
Pursuant to Rule 14a-6(b) under the Securities Exchange Act of 1934, as
amended, transmitted herewith for filing is a copy of definitive proxy
materials for meetings of stockholders of Funds in The Dreyfus Family of
Funds. The filing fee of $125 for each Fund was forwarded prior to filing
the preliminary proxy materials.
It is estimated that proxy materials will be mailed to stockholders of
record on or about June 9, 1994.
<PAGE>
LOGO OF THE DREYFUS CORPORATION
HOWARD STEIN JOSEPH S. DiMARTINO
CHAIRMAN OF THE BOARD PRESIDENT AND
CHIEF EXECUTIVE OFFICER CHIEF OPERATING OFFICER
Dear Dreyfus Fund Stockholder:
As you know, The Dreyfus Corporation has agreed to merge with Mellon Bank.
In the past, when we have solicited proxies, you have received a proxy
statement directed solely to your Fund. Because all Funds in the Dreyfus
Family are affected similarly by this transaction, we believed it was more
efficient to prepare a single proxy statement to be used by all shareholders,
in addition to a supplement pertaining only to your Fund--although we
apologize for the sheer "weight" of the package.
While we encourage you to read the full text of the proxy statement, we
thought it would be helpful to put together a few brief Questions and Answers
(Q&A). That Q&A is on the reverse side of this page.
It is important to keep in mind that The Dreyfus Corporation, NOT THE FUND,
plans to merge with Mellon Bank. YOUR FUND SHARES WILL NOT CHANGE, THE
ADVISORY FEES CHARGED TO YOUR FUND WILL NOT CHANGE, AND THE DREYFUS
CORPORATION WILL CONTINUE TO ACT IN ITS SAME CAPACITY TO YOUR FUND AS BEFORE.
Most importantly, you will continue to receive the high quality of shareholder
services that you have come to expect over the years.
After careful consideration, the Directors of your Fund suggest that you
vote "FOR" all the Proposals on the enclosed proxy card. As always, we thank
you for your confidence and support.
Sincerely,
/s/ Howard Stein /s/ Joseph S. DiMartino
Q & A on reverse side
<PAGE>
Q. WHAT IS HAPPENING?
A. The Dreyfus Corporation, not the Fund, plans to merge with Mellon Bank.
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Dreyfus will remain as a separate operating corporation.
Q. WHY AM I BEING ASKED TO VOTE ON THESE PROPOSALS?
A. The Investment Company Act requires a vote whenever there is a change of
a certain percentage in the ownership of the investment advisory company. As a
result, the Act requires the approval of a new investment or sub-investment
advisory agreement by the shareholders of each Fund. Also, various regulatory
requirements that would become applicable as a result of the merger require
some amendments to the Rule 12b-1 Plans of certain Funds, but no change in the
fees.
Q. HOW WILL THIS AFFECT ME AS A FUND SHAREHOLDER?
A. Your Fund shares will not change. You will still own the same shares in
---------------
the same Fund.
The primary difference is that the ownership of The Dreyfus Corporation will
change from a publicly-held corporation to a subsidiary of Mellon Bank, N.A.
The Dreyfus Corporation will continue to act in its same capacity to your Fund
as before.
This transaction should not result in changes to your Fund's advisory services
or in the high quality of shareholder services that you have come to expect
over the years.
Q. WILL THE INVESTMENT ADVISORY AND RULE 12B-1 FEES BE THE SAME?
A. Yes, the fees charged to your Fund will remain the same.
----------------------------------------------
Q. HOW DO THE BOARD MEMBERS OF MY FUND SUGGEST THAT I VOTE?
A. After careful consideration, the Board members of your Fund recommend
that you vote "FOR" all the Proposals on the enclosed proxy card.
Q. WHOM DO I CALL?
A. If you have any questions, please call D.F. King & Co., Inc. at 1-800-
859-8515.
PLEASE VOTE
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
<PAGE>
THE DREYFUS FAMILY OF FUNDS
200 PARK AVENUE
NEW YORK, NEW YORK 10166
Dear Dreyfus Fund Stockholder:
The attached proxy statement discusses 13 proposals, many of which do not
affect your Fund. THE ENCLOSED PROXY CARD LISTS THE PROPOSALS WHICH DO AFFECT
YOUR FUND AND ON WHICH YOU ARE BEING ASKED TO VOTE.
As you may be aware, The Dreyfus Corporation ("Dreyfus"), which provides
investment advisory services to each Fund in The Dreyfus Family of Funds (the
"Funds"), has agreed to merge with a subsidiary of Mellon Bank Corporation
("Mellon"). Dreyfus and Mellon have advised that this transaction will not
result in changes to your Fund's advisory services or in the high quality
stockholder services that you have come to expect over the years.
This transaction will result in the automatic termination of (i) the
agreements under which Dreyfus provides investment advisory services to the
Funds and (ii) the sub-investment advisory agreements pertaining to certain
Funds, as required by the Investment Company Act of 1940, as amended. This
transaction also necessitates the adoption of new Rule 12b-1 plans pertaining
to certain Funds. This transaction thus requires the approval by the holders of
shares of each Fund of a new investment advisory agreement--which will be
substantially identical to the agreement currently in effect. It also provides
an opportunity to request approvals for various other matters which are
described in the proxy materials.
For each Fund, the aggregate contractual rate chargeable for investment
advisory services will remain the same (for The Dreyfus Socially Responsible
Growth Fund, Inc. and The Dreyfus Third Century Fund, Inc. the nature of the
relationship between Dreyfus and the sub-investment adviser to each of these
Funds and the allocation of the fee will change as described in the proxy
materials). For each Fund operating under a Rule 12b-1 plan, the aggregate rate
payable by the Fund will remain the same.
When we have solicited proxies in the past, you have received a proxy
statement directed solely to your Fund. Because all Funds in The Dreyfus Family
are affected by this transaction and since much of the information required to
be included in the proxy materials for each Fund is substantially identical, we
believe it is more efficient to prepare a single, "omnibus" proxy statement for
use by the stockholders of all Funds. Further information pertaining to your
Fund is contained in a separate Exhibit (the "Fund Exhibit") which accompanies,
and forms a part of, these materials. (If you own shares in more than one
Dreyfus Fund, the term "your Fund" means each of your Funds.) You are receiving
separate proxy materials and a separate Fund Exhibit for each Fund you own.
As you may be aware, the Funds are organized as Maryland corporations,
Massachusetts business trusts or Delaware limited partnerships. In each state,
nomenclature varies. But for ease of presentation, we will refer to you
throughout the proxy statement as "stockholders," your Fund shares as "shares,"
your directors, trustees or managing general partners as "Board members" and
your Fund's Articles of Incorporation, Agreement and Declaration of Trust, or
Agreement of Limited Partnership as its "charter."
Your Board has voted in favor of each proposal that applies to your Fund and
recommends that you vote "FOR" each proposal. As you will note, stockholders of
a Fund will not vote on each proposal. The attached Notice of Meeting sets
forth which Fund's stockholders will vote on a proposal. The enclosed proxy
card permits you to vote only with respect to the proposals relating to your
Fund.
Please review the proxy statement carefully and cast your vote on the
--- ---- ---- ----
enclosed proxy card. If you are a stockholder of more than one Fund, you will
receive, in separate mailings, a proxy statement, Fund Exhibit and proxy card
for each of your Funds. Management and the Board of each Fund recommend you
vote "FOR" each proposal. PLEASE VOTE EACH PROXY CARD YOU RECEIVE TO ENSURE ALL
YOUR SHARES ARE VOTED. EVERY VOTE COUNTS! If you have any questions, please
call D.F. King & Co., Inc., which has been engaged to solicit proxies on behalf
of each Fund's Board, at 1-800-859-8515.
Sincerely,
/s/ Howard Stein /s/ Joseph S. DiMartino
Chairman President
The Dreyfus Corporation The Dreyfus Corporation
<PAGE>
THE DREYFUS FAMILY OF FUNDS
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NOTICE OF MEETINGS OF STOCKHOLDERS
---------------
To the Stockholders:
Meetings of Stockholders of each of the Funds in The Dreyfus Family of Funds
listed on Part I of Exhibit A and Comstock Partners Strategy Fund, Inc. (each,
a "Fund" and, collectively, the "Funds") will be held on the date, and at the
time and place, set forth on the Fund Exhibit accompanying, and forming a part
of, these materials. The meetings will be held for the following purposes:
THE FOLLOWING PROPOSAL APPLIES TO STOCKHOLDERS OF EACH FUND:
1. To approve a new investment advisory or sub-investment advisory
agreement. No fee increase is proposed.
THE FOLLOWING PROPOSAL APPLIES TO STOCKHOLDERS OF EACH FUND, EXCEPT COMSTOCK
PARTNERS STRATEGY FUND, INC., DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS
BASIC MUNICIPAL FUND, DREYFUS FLORIDA MUNICIPAL MONEY MARKET FUND, DREYFUS
FOCUS FUNDS, INC., DREYFUS GLOBAL BOND FUND, INC., DREYFUS INSTITUTIONAL SHORT
TERM TREASURY FUND, DREYFUS INTERNATIONAL EQUITY FUND, INC., DREYFUS
PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND, DREYFUS VARIABLE INVESTMENT
FUND, PREMIER INSURED MUNICIPAL BOND FUND AND PREMIER STATE MUNICIPAL BOND
FUND:
2. To elect Board members to hold office until their successors are duly
elected and qualified. All nominees currently serve as Board members, with
one exception for certain Funds.
THE FOLLOWING PROPOSAL APPLIES TO STOCKHOLDERS OF EACH FUND, EXCEPT COMSTOCK
PARTNERS STRATEGY FUND, INC.:
3. To ratify the selection of the Fund's independent auditors. No change
in auditors is proposed.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF EACH FUND CURRENTLY
SUBJECT TO A RULE 12B-1 PLAN:
4. To approve new Rule 12b-1 plans. No fee increase is proposed.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF DREYFUS GLOBAL BOND
FUND, INC.:
5. To approve a new sub-investment advisory agreement between The Dreyfus
Corporation and the sub-investment adviser of Dreyfus Global Bond Fund,
Inc. No fee increase is proposed.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF DREYFUS INTERNATIONAL
EQUITY FUND, INC.:
6. To approve a new sub-investment advisory agreement between The Dreyfus
Corporation and the sub-investment adviser of Dreyfus International Equity
Fund, Inc. No fee increase is proposed.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF DREYFUS STRATEGIC
GROWTH, L.P.:
7. To approve a new sub-investment advisory agreement between The Dreyfus
Corporation and the sub-investment adviser of Dreyfus Strategic Growth,
L.P. No fee increase is proposed.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF THE INTERNATIONAL EQUITY
PORTFOLIO OF DREYFUS VARIABLE INVESTMENT FUND:
8. To approve a new sub-investment advisory agreement between The Dreyfus
Corporation and the sub-investment adviser of the International Equity
Portfolio of Dreyfus Variable Investment Fund. No fee increase is proposed.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF PREMIER GROWTH FUND,
INC.:
9. To approve a new sub-investment advisory agreement between The Dreyfus
Corporation and the sub-investment adviser of Premier Growth Fund, Inc. No
fee increase is proposed.
<PAGE>
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF THE DREYFUS SOCIALLY
RESPONSIBLE GROWTH FUND, INC.:
10. To approve a new sub-investment advisory agreement between The
Dreyfus Corporation and NCM Capital Management Group, Inc., relating to The
Dreyfus Socially Responsible Growth Fund, Inc.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF THE DREYFUS THIRD
CENTURY FUND, INC.:
11. To approve a new sub-investment advisory agreement between The
Dreyfus Corporation and NCM Capital Management Group, Inc., relating to The
Dreyfus Third Century Fund, Inc.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF CERTAIN FUNDS IN THE
GENERAL FAMILY OF FUNDS:
12. To approve an amendment to the charter of the following Funds to
permit the issuance of additional classes of shares:
. General California Municipal Money Market Fund
. General Government Securities Money Market Fund, Inc.
. General Money Market Fund, Inc.
. General Municipal Bond Fund, Inc.
. General Municipal Money Market Fund, Inc.
. General New York Municipal Bond Fund, Inc.
. General New York Municipal Money Market Fund
Existing stockholders will not be affected by this Proposal.
THE FOLLOWING PROPOSAL APPLIES ONLY TO STOCKHOLDERS OF THE FUNDS LISTED ON
EXHIBIT C (SEE PAGE C-1 OF THE PROXY STATEMENT):
13. To change certain of the Funds' fundamental policies and investment
restrictions.
---------------
14. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Stockholders of record at the close of business on June 6, 1994 will be
entitled to receive notice of and to vote at the meeting.
By Order of the Board
Secretary
New York, New York
June 3, 1994
WE NEED YOUR PROXY VOTE IMMEDIATELY
-----------
A STOCKHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY LAW,
-----
THE MEETING OF STOCKHOLDERS OF EACH FUND WILL HAVE TO BE ADJOURNED WITHOUT
CONDUCTING ANY BUSINESS IF LESS THAN A MAJORITY OF ITS SHARES ELIGIBLE TO
VOTE IS REPRESENTED. IN THAT EVENT, THE AFFECTED FUND WOULD CONTINUE TO
SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD
BE CRITICAL TO ENABLE THE FUND(S) TO HOLD THE MEETING(S) AS SCHEDULED, SO
PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS
-----------
WILL BENEFIT FROM YOUR COOPERATION.
2
<PAGE>
THE DREYFUS FAMILY OF FUNDS
COMBINED PROXY STATEMENT
------------------------
MEETING OF STOCKHOLDERS
This proxy statement is furnished in connection with a solicitation of
proxies by the Board of each of the Funds in The Dreyfus Family of Funds listed
on Part I of Exhibit A and Comstock Partners Strategy Fund, Inc. (each, a
"Fund" and, collectively, the "Funds") to be used at the Meeting of
Stockholders of each Fund to be held for the purposes set forth in the
accompanying Notice of Meeting of Stockholders. Stockholders of record at the
close of business on June 6, 1994 are entitled to be present and to vote at the
meeting. Each Fund share is entitled to one vote. Stockholders can vote only on
matters affecting the Fund(s) of which they are stockholders. Shares
represented by executed and unrevoked proxies will be voted in accordance with
the specifications made thereon. If the enclosed form of proxy is executed and
returned, it nevertheless may be revoked by another proxy or by letter or
telegram directed to the relevant Fund, which must indicate the stockholder's
name and account number. To be effective, such revocation must be received
prior to the relevant Fund's meeting. In addition, any stockholder who attends
a meeting in person may vote by ballot at the relevant Fund meeting, thereby
canceling any proxy previously given. Your Fund had outstanding the number of
shares indicated on the Fund Exhibit accompanying, and forming a part of, these
materials (the "Fund Exhibit").
It is estimated that proxy materials will be mailed to stockholders of record
on or about June 9, 1994. Copies of each Fund's current Annual Report have been
mailed to stockholders to the extent required by applicable regulation. The
principal executive offices of each Fund, other than Comstock Partners Strategy
Fund, Inc., are located at 200 Park Avenue, New York, New York 10166. The
principal executive offices of Comstock Partners Strategy Fund, Inc. are
located at 10 Exchange Place, Jersey City, New Jersey 07302.
Proposals are to be voted upon by stockholders of the Funds as follows:
Proposal 1--This Proposal applies to stockholders of each Fund.
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Stockholders of each Fund, other than Comstock Partners Strategy Fund, Inc.,
will vote to approve such Fund's new investment advisory agreement with The
Dreyfus Corporation ("Dreyfus").
Stockholders of Comstock Partners Strategy Fund, Inc. will vote to approve
the new sub-investment advisory agreement between such Fund's investment
adviser and Dreyfus.
Proposal 2--This Proposal applies to stockholders of each Fund, other than
----------
Comstock Partners Strategy Fund, Inc., Dreyfus Asset Allocation Fund, Inc.,
Dreyfus BASIC Municipal Fund, Dreyfus Florida Municipal Money Market Fund,
Dreyfus Focus Funds, Inc., Dreyfus Global Bond Fund, Inc., Dreyfus
Institutional Short Term Treasury Fund, Dreyfus International Equity Fund,
Inc., Dreyfus Pennsylvania Intermediate Municipal Bond Fund, Dreyfus Variable
Investment Fund, Premier Insured Municipal Bond Fund and Premier State
Municipal Bond Fund. These stockholders will vote to elect their Fund's Board
members.
Proposal 3--This Proposal applies to stockholders of each Fund, other than
----------
Comstock Partners Strategy Fund, Inc. These stockholders will vote to ratify
the selection of their Fund's independent auditors.
Proposal 4--This Proposal applies only to stockholders of each Fund subject
----------
to a Rule 12b-1 plan. These stockholders will vote to approve their Fund's new
Rule 12b-1 plan. (To see whether your Fund has adopted a Rule 12b-1 plan, see
the Fund Exhibit.)
Proposal 5--This Proposal applies only to stockholders of Dreyfus Global Bond
----------
Fund, Inc. These stockholders will vote to approve the new sub-investment
advisory agreement between Dreyfus and such Fund's sub-investment adviser.
Proposal 6--This Proposal applies only to stockholders of Dreyfus
----------
International Equity Fund, Inc. These stockholders will vote to approve the new
sub-investment advisory agreement between Dreyfus and such Fund's sub-
investment adviser.
Proposal 7--This Proposal applies only to stockholders of Dreyfus Strategic
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Growth, L.P. These stockholders will vote to approve the new sub-investment
advisory agreement between Dreyfus and such Fund's sub-investment adviser.
Proposal 8--This Proposal applies only to stockholders of the International
----------
Equity Portfolio of Dreyfus Variable Investment Fund. These stockholders will
vote to approve the new sub-investment advisory agreement between Dreyfus and
such Portfolio's sub-investment adviser.
<PAGE>
Proposal 9--This Proposal applies only to stockholders of Premier Growth
----------
Fund, Inc. These stockholders will vote to approve the new sub-investment
advisory agreement between Dreyfus and such Fund's sub-investment adviser.
Proposal 10--This Proposal applies only to stockholders of The Dreyfus
-----------
Socially Responsible Growth Fund, Inc. These stockholders will vote to approve
a new sub-investment advisory agreement between Dreyfus and NCM Capital
Management Group, Inc.
Proposal 11--This Proposal applies only to stockholders of The Dreyfus Third
-----------
Century Fund, Inc. These stockholders will vote to approve a new sub-investment
advisory agreement between Dreyfus and NCM Capital Management Group, Inc.
Proposal 12--This Proposal applies only to stockholders of the following
-----------
Funds in the General Family:
. General California Municipal Money Market Fund
. General Government Securities Money Market Fund, Inc.
. General Money Market Fund, Inc.
. General Municipal Bond Fund, Inc.
. General Municipal Money Market Fund, Inc.
. General New York Municipal Bond Fund, Inc.
. General New York Municipal Money Market Fund
These stockholders will vote to approve amendments to their Fund's charter to
permit the issuance of additional classes of shares.
Proposal 13--This Proposal applies only to stockholders of each Fund listed
-----------
on Exhibit C (see page C-1). These stockholders will vote to change certain of
their Fund's fundamental policies and investment restrictions.
Stockholders of each Fund will vote as a single class, except as noted in
respect of Proposal 4, and will vote separately on each proposal on which
stockholders of that Fund are entitled to vote. If the transaction described in
Proposal 1 between Dreyfus and Mellon Bank Corporation is not consummated,
Proposal 1 (except as Proposal 1 relates to The Dreyfus Socially Responsible
Growth Fund, Inc. ("Dreyfus Socially Responsible Fund") and The Dreyfus Third
Century Fund, Inc. ("Dreyfus Third Century Fund")) and Proposals 4 through 9
will not be implemented, even if the stockholder vote necessary to adopt them
is received. In all other cases, if a proposal is approved by stockholders of
one Fund and disapproved by stockholders of any other Fund, the proposal will
be implemented for the Fund that approved the proposal and will not be
implemented for any Fund that did not approve the proposal.
The transaction described in Proposal 1 between Dreyfus and Mellon Bank
Corporation is conditioned, among other matters, on its approval by the Fund
Boards and stockholders of Funds holding not less than 90% of the aggregate net
assets as of the close of business on December 3, 1993 of all Funds managed,
administered or advised by Dreyfus (excluding, for the purpose of such
approvals and assets, the Funds in the First Prairie Family listed on Part II
of Exhibit A, and Pacific American Fund). Therefore, it is essential that
stockholders who own shares in more than one Fund complete, date, sign and
return each proxy card they receive.
----
If a quorum is not present at a meeting, or if a quorum is present but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies. In determining whether to adjourn the meeting,
the following factors may be considered: the nature of the proposals that are
the subject of the meeting, the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to stockholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares represented at the meeting in person or by
proxy. A stockholder vote may be taken for one or more of the Funds on one or
more of the proposals in this proxy statement prior to any adjournment if
sufficient votes have been received for approval.
PROPOSAL 1. APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE FUND
AND DREYFUS OR APPROVAL OF THE NEW SUB-INVESTMENT ADVISORY AGREEMENT BETWEEN
DREYFUS AND THE INVESTMENT ADVISER OF COMSTOCK PARTNERS STRATEGY FUND, INC.
INTRODUCTION
Under an Amended and Restated Agreement and Plan of Merger (the "Merger
Agreement") dated as of December 5, 1993, by and among Mellon Bank Corporation
("Mellon"), Mellon Bank, N.A., XYZ Sub Corporation and Dreyfus,
2
<PAGE>
Dreyfus has agreed to merge with a subsidiary of Mellon Bank, N.A. (the
"Transaction"). Upon completion of the Transaction, Dreyfus will become a
wholly-owned subsidiary of Mellon Bank, N.A. and will continue to be called
"The Dreyfus Corporation."
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's
banking subsidiaries are located in the Central Atlantic states of
Pennsylvania, Delaware and Maryland, and in Massachusetts, while other
subsidiaries are located in key business centers throughout the United States
and abroad. Mellon is currently the twenty-third largest bank holding company
in the United States based on total assets of $36.6 billion as of March 31,
1994. Based on Securities and Exchange Commission ("SEC") filings, Mellon has
informed the Funds that the following stockholders, who are affiliated with one
another, are the only Mellon stockholders who, as of December 31, 1993, either
individually or as a "group" (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended), beneficially owned more than 10% of the
outstanding shares of Mellon's voting securities (comprised of common stock and
Series D stock):
<TABLE>
<CAPTION>
AMOUNT OWNED
BENEFICIALLY PERCENT
------------------ OF
COMMON SERIES D VOTING
NAME ADDRESS STOCK STOCK CLASS
---- ------- --------- -------- -------
<S> <C> <C> <C> <C>
Warburg, Pincus Capital Compa- 466 Lexington Avenue 6,914,236 564,190 11.36%
ny, L.P....................... New York, NY 10017
Warburg, Pincus Capital Part- 466 Lexington Avenue 1,382,842 -0- 2.10%
ners, L.P..................... New York, NY 10017
</TABLE>
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A., Mellon
Bank (DE) National Association, Mellon Bank (MD), The Boston Company, Inc.,
AFCO Credit Corporation and a number of companies known as Mellon Financial
Services Corporations. Mellon's banking subsidiaries engage in domestic retail
banking, worldwide commercial banking, trust banking, investment management and
other financial services and securities-related activities. Mellon's financial
services related subsidiaries provide a broad range of bank-related services
including commercial financial services, equipment leasing, data processing,
residential real estate financing, commercial and consumer real estate
financing, insurance premium financing, stock transfer services, cash
management, mortgage servicing, and trust and investment management services.
Through its subsidiaries, Mellon managed approximately $132 billion in assets
as of March 31, 1994, including approximately $6 billion in mutual fund assets.
As of March 31, 1994, various subsidiaries of Mellon provided non-investment
services, such as custodial or administration services, for approximately $631
billion in assets, including $127 billion in mutual fund assets. Mutual fund
assets under administration decreased by approximately $40 billion as a result
of the sale, effective May 6, 1994, by The Boston Company, Inc., a subsidiary
of Mellon, of a portion of its third party mutual fund administration business
to The Shareholder Services Group, Inc.
Pursuant to the terms of the Merger Agreement, upon the closing of the
Transaction each share of Dreyfus common stock outstanding shall be
automatically converted into the right to receive 0.88017 shares of Mellon
common stock. No fractional shares of Mellon common stock will be issued. At
June 1, 1994, there were 36,559,078 shares of Dreyfus common stock outstanding
and the market price of Mellon common stock was $59.25 per share.
As required by the Investment Company Act of 1940, as amended (the "Act"),
the existing investment advisory agreement between each Fund and Dreyfus (or,
for Comstock Partners Strategy Fund, Inc., the sub-investment advisory
agreement between Dreyfus and Comstock Partners, Inc.) (in each case, the
"Existing Agreement") provides for its automatic termination upon its
"assignment." The Transaction, when consummated, would give rise to an
"assignment," within the meaning of the Act, of the Existing Agreement for each
Fund.
The approval of the Transaction by: (1) all required governmental or
regulatory authorities, (2) the stockholders of Mellon and Dreyfus,
respectively, and (3) the Fund Boards and stockholders of Funds holding not
less than 90% of the aggregate net assets as of the close of business on
December 3, 1993 of all Funds managed, administered or advised by Dreyfus
(excluding, for the purpose of such approvals and assets, the Funds in the
First Prairie Family listed on Part II of Exhibit A, and Pacific American Fund)
(the "90% Condition") are conditions to the consummation of the Transaction. On
May 4, 1994, the Office of the Comptroller of the Currency notified Mellon that
it had granted the necessary regulatory approval. On February 3, 1994, the
Federal Trade Commission notified Dreyfus and Mellon that early termination of
the applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, had been granted. Dreyfus and Mellon have
advised that they anticipate all other regulatory approvals will
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be obtained and that they intend to solicit approval of their respective
stockholders at approximately the same time Fund stockholders will be
solicited.
The closing of the Transaction and, thus, the assignment, currently is
scheduled to occur in the third quarter of 1994. The precise date at which any
assignment of each Fund's Existing Agreement will occur, if at all, cannot now
be determined. The Merger Agreement may be terminated upon certain events and
may be terminated by either party if the transactions thereunder have not been
consummated on or before December 31, 1994.
Each Fund's Board is proposing that its stockholders approve a new investment
advisory agreement between each such Fund and Dreyfus (or, as to Comstock
Partners Strategy Fund, Inc., a new sub-investment advisory agreement between
Dreyfus and the investment adviser of such Fund) (each, the "New Agreement").
Each New Agreement would become effective upon consummation of the Transaction,
except that the New Agreement for each of Dreyfus Socially Responsible Fund and
Dreyfus Third Century Fund would become effective upon stockholder approval. A
description of each Fund's New Agreement and the services to be provided by
Dreyfus are set forth below. This description is qualified in its entirety by
reference to the New Agreement for each Fund set forth on such Fund's Fund
Exhibit. Each proposed New Agreement is substantively the same as the Existing
Agreement, differing only in its effective date and as otherwise noted on the
relevant Fund Exhibit, except for the proposed New Agreements for Dreyfus
Socially Responsible Fund and Dreyfus Third Century Fund which are described
under "--Existing and New Agreements" below. The notes at the end of the New
Agreement set forth on the Fund Exhibit should be reviewed carefully.
For each Fund, the aggregate contractual rate chargeable for investment
advisory services will remain the same (although for Dreyfus Socially
Responsible Fund and Dreyfus Third Century Fund the nature of the relationship
between Dreyfus and the sub-investment adviser to each of these Funds and the
fee allocations will change as described below).
In connection with each Fund's approval of its New Agreement, its Board
considered that the terms of the Transaction do not require any change in the
Fund's investment objective or policies, Dreyfus' investment management or
operation of the Fund, the investment personnel managing the Fund, or the
stockholder services or other business activities of the Fund. Mellon and
Dreyfus have informed each Fund's Board that the Transaction is not expected to
result in any such change, although no assurance can be given that such a
change will not occur. Each also has advised that, at present, neither plans
nor proposes to make any material changes in the business, corporate structure
or composition of senior management or personnel of Dreyfus, or in the manner
in which Dreyfus renders investment advisory services to each Fund. If, after
the Transaction, changes in Dreyfus are proposed that might materially affect
its services to a Fund, the Fund's Board will consider the effect of those
changes and take such action as it deems advisable under the circumstances.
Each Fund's Board also considered the effect of interpretations of applicable
law relating to the permissible activities of affiliates of a bank (which
Dreyfus will become after the Transaction), including that:
(i) Dreyfus Service Corporation no longer would be permitted to act as each
Fund's distributor (see "--Information about the Funds' Distributor");
(ii) while Dreyfus no longer would be permitted to purchase Fund shares for
its account, either to provide initial capital or for other purposes,
satisfactory alternative arrangements have been made; and
(iii) Dreyfus would be subject to bank regulatory requirements, designed to
avoid confusion between Fund shares and bank products, when marketing
mutual funds.
Mellon and Dreyfus advised each Fund's Board members that in their collective
judgment the resulting changes in Dreyfus' operations should not have any
material adverse effect on the Funds' ongoing operations or on the extent or
quality of services provided to the Funds, or increase the cost to the Funds of
such services.
Dreyfus has informed each Fund that it proposes to comply with Section 15(f)
of the Act. Section 15(f) provides a non-exclusive safe harbor for an
investment adviser or any of its affiliated persons to receive any amount or
benefit in connection with a change in control of the investment adviser as
long as two conditions are met. First, for a period of three years after the
transaction, at least 75% of the Board members of the investment company must
not be interested persons of such investment adviser. Second, an "unfair
burden" must not be imposed on the investment company as a result of such
transaction or any express or implied terms, conditions or understandings
applicable thereto. The term "unfair burden" is defined in Section 15(f) to
include any arrangement during the two-year period after the transaction
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whereby the investment adviser, or any interested person of any such adviser,
receives or is entitled to receive any compensation, directly or indirectly,
from the investment company or its security holders (other than fees for bona
fide investment advisory or other services) or from any person in connection
with the purchase or sale of securities or other property to, from or on behalf
of the investment company (other than bona fide ordinary compensation as
principal underwriter for such investment company). Dreyfus, after due inquiry,
is not aware of any express or implied term, condition, arrangement or
understanding which would impose an "unfair burden" on any Fund as a result of
the Transaction. Mellon has agreed that it, Dreyfus and their affiliates will
take no action that would have the effect of imposing an "unfair burden" on any
Fund as a result of the Transaction. Dreyfus and Mellon have undertaken to pay
all costs and expenses incurred by each Fund as a result of the Transaction,
including the costs of each Fund's meeting.
In addition to complying with Section 15(f), Dreyfus also will comply with
applicable bank regulatory requirements, which require that no officer or
director of Mellon, Dreyfus or certain other Mellon subsidiaries will serve as
an officer or director of any Fund.
At a meeting held on the date set forth on the Fund Exhibit, each Fund's
Board, including a majority of the Board members who are not "interested
persons" (as defined in the Act) of any party to the New Agreement, approved
the New Agreement.
DREYFUS
Dreyfus, located at 200 Park Avenue, New York, New York 10166, provides
investment advisory services to each Fund under the terms of a separate
Existing Agreement with such Fund. As to each Fund, the Existing Agreement was
entered into and last approved by such Fund's Board and by its stockholders on
the dates set forth on the Fund Exhibit.
Dreyfus was formed in 1947, has advised The Dreyfus Fund Incorporated since
that time and serves as investment adviser, sub-investment adviser or
administrator for the investment companies set forth on Exhibit A. The
approximate net assets of each such investment company as of May 4, 1994 and
the fee payable by it to Dreyfus (as a percentage of average daily net assets)
are listed on Exhibit A.
Dreyfus' Chairman of the Board and Chief Executive Officer is Howard Stein.
Other directors of Dreyfus are Mandell L. Berman, real estate consultant and
private investor, Southfield, Michigan; Joseph S. DiMartino, Dreyfus' President
and Chief Operating Officer; Alvin E. Friedman, Senior Adviser to Dillon, Read
& Co. Inc., investment bankers, New York, New York; Lawrence M. Greene, legal
consultant to Dreyfus; Abigail Q. McCarthy, author, lecturer, columnist,
educational consultant, formerly, Founding President of the Washington Clearing
House on Women's Issues, and a member of The Advisory Board of the Washington
Independent Writers, Washington, D.C.; Julian M. Smerling, Vice Chairman of the
Board of Directors of Dreyfus; and Dr. David B. Truman, educational consultant
and past President of Mt. Holyoke College and of the Russell Sage Foundation,
Hillsdale, New York.
Dreyfus' common stock is listed on the New York Stock Exchange and the
Pacific Stock Exchange. As of March 31, 1994, all Dreyfus' officers and
directors, in the aggregate, owned 7.3% of Dreyfus' outstanding common stock.
The preceding figure includes those shares held in Dreyfus' Retirement Profit-
Sharing Plan (the "Profit-Sharing Plan") for the benefit of Dreyfus' officers
and directors who are vested under the Profit-Sharing Plan. Nonvested shares
held in the Profit-Sharing Plan for the benefit of Dreyfus' officers and
directors amounted to less than 1% of Dreyfus' outstanding common stock on
March 31, 1994. Total shares held in the Profit-Sharing Plan for the benefit of
all participants, including officers and directors, aggregated 4% of Dreyfus'
outstanding common stock on March 31, 1994. To Dreyfus' knowledge, no
stockholder beneficially owned 10% or more of its outstanding common stock on
that date.
An audited consolidated balance sheet of The Dreyfus Corporation and
Subsidiary Companies as of December 31, 1993 is set forth as Exhibit B.
EXISTING AND NEW AGREEMENTS
Although not necessarily identical, the Existing and New Agreements for each
Fund are substantively the same, except as noted on the relevant Fund Exhibit
and except for the proposed New Agreements for Dreyfus Socially Responsible
Fund and Dreyfus Third Century Fund. The notes set forth at the end of the
relevant Fund Exhibit should be reviewed carefully. Each Fund's New Agreement
is set forth on its Fund Exhibit and a description follows.
Investment Advisory Agreements
The following applies to each Fund, other than Comstock Partners Strategy
Fund, Inc.
For each Fund, under the terms of its New Agreement, Dreyfus is required to
manage the Fund's portfolio of investments in accordance with its stated
policies, subject to the approval of the Fund's Board. For certain Funds, as
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noted on the relevant Fund's Fund Exhibit, Dreyfus has engaged a sub-investment
adviser to provide day-to-day portfolio management subject to Dreyfus'
supervision. As a result of the Transaction, five of these arrangements will
require stockholder reapproval as described in Proposals 5, 6, 7, 8 and 9.
For each of Dreyfus Socially Responsible Fund and Dreyfus Third Century Fund,
its Board has determined to replace the Fund's existing sub-investment adviser,
Tiffany Capital Advisors, Inc. ("Tiffany"), and has approved an increase in the
rate at which Dreyfus is paid so that it equals the rate previously paid to it
and Tiffany, in the aggregate, and would specifically authorize Dreyfus to
engage a new sub-investment adviser, at Dreyfus' cost, to provide day-to-day
portfolio management, subject to Dreyfus' supervision. Dreyfus would be
required to seek stockholder approval for any sub-investment adviser it
employs. Dreyfus has determined to engage NCM Capital Management Group, Inc.
("NCM") to so act. The sub-investment advisory arrangements between Dreyfus and
NCM for these Funds are described in Proposals 10 and 11.
Dreyfus maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research services for
each Fund. All purchases and sales of portfolio securities by a Fund are
reported for its Board's review at the meeting subsequent to such transactions.
For each Fund, under the terms of its New Agreement, Dreyfus will continue to
pay the salaries of all officers and employees who are employed by both it and
the Fund, maintain office facilities, and furnish statistical and research
data, clerical help, accounting, data processing, bookkeeping and internal
auditing, legal, executive (to the extent permitted by applicable regulations)
and certain other required services.
All expenses incurred in the operation of a Fund are borne by the Fund,
except to the extent specifically assumed by Dreyfus or some other entity.
These expenses are described in the New Agreement set forth on the Fund
Exhibit.
For each Fund, Dreyfus 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 investment advisory fee, exceed the
amount provided in its New Agreement, such Fund may deduct from the fees to be
paid to Dreyfus under the New Agreement, or Dreyfus will bear, such excess
expense to the extent set forth therein. 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.
As compensation for Dreyfus' services, each Fund has agreed to pay Dreyfus a
monthly fee as set forth on its Fund Exhibit. For each Fund, except Dreyfus
Socially Responsible Fund and Dreyfus Third Century Fund, the rate used to
determine fees payable by it pursuant to its New Agreement is identical to the
rate in its Existing Agreement. All fees and expenses are accrued daily and
deducted before declaration of dividends to stockholders. For each Fund, the
investment advisory fees payable, the amounts by which such fees were reduced
pursuant to undertakings by Dreyfus, and the net investment advisory fees paid
by such Fund for its most recent fiscal year under its Existing Agreement are
set forth on its Fund Exhibit.
For each Fund, its New Agreement will continue automatically for successive
annual periods, provided such continuance is specifically approved at least
annually by (i) such Fund's Board or (ii) vote of a majority (as defined in the
Act) of such Fund's outstanding voting securities and, further provided, that
in either event its continuance also is approved by a majority of such Fund's
Board members who are not "interested persons" (as defined in the Act) of any
party to the New Agreement, by a vote cast in person at a meeting called for
the purpose of voting on such approval. For each Fund, its New Agreement may be
terminated without penalty, on 60 days' notice, by its Board or by vote of the
holders of a majority of its outstanding voting securities, or, upon not less
than 90 days' notice, by Dreyfus. Each New Agreement will terminate
automatically in the event of its assignment (as defined in the Act).
The New Agreement provides that, in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard for its obligations thereunder,
Dreyfus shall not be liable for any act or omission in the course of or in
connection with the rendering of its services thereunder.
New Agreements For The Dreyfus Socially Responsible Growth Fund, Inc. and The
Dreyfus Third Century Fund, Inc.
The following applies to both Funds.
At a meeting held on May 26, 1994, each Fund's Board determined that
employing another sub-investment adviser would be in the best interests of the
Fund and its stockholders and would better serve to achieve the Fund's
investment objectives. After such determination, the Fund's Board directed
officers of the Fund to provide written notice to Tiffany to terminate the
Fund's Sub-Investment Advisory Agreement with Tiffany and to provide written
notice to Dreyfus to terminate the Fund's Existing Agreement.
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At a meeting held on May 26, 1994, the Fund's Board, including a majority of
the non-interested Board members, approved the entry by the Fund into its New
Agreement and approved a new sub-investment advisory agreement between Dreyfus
and NCM. The fee to be paid by the Fund to Dreyfus under its New Agreement will
equal an annual rate of .75 of 1% of the value of the Fund's average daily net
assets, which amount is equal to the combined fee previously paid to Dreyfus
and Tiffany under the investment advisory and sub-advisory arrangements
previously in effect. Dreyfus will pay NCM directly out of the fee it receives
under its New Agreement. See Proposals 10 and 11 for a description of Dreyfus'
agreement with NCM.
In reaching its decision to approve the respective Fund's New Agreement, its
Board considered, among other things, the nature and quality of the services
previously and currently being provided by Dreyfus, and the nature of the
services to be provided by Dreyfus under its New Agreement and by NCM under its
agreement with Dreyfus. The Board of each Fund also considered the overall fee
structure and concluded that the aggregate fee continues to be fair and
reasonable to its Fund's stockholders. The New Agreement for each Fund is set
forth on its Fund Exhibit. Fund stockholders should review carefully the New
Agreement and the accompanying notes included at the end of the Fund Exhibit.
It is proposed that the New Agreement for each of Dreyfus Socially
Responsible Fund and Dreyfus Third Century Fund would become effective upon
stockholder approval. The approval sought by these proxy materials also will
cover the New Agreements if they are deemed terminated by the Transaction.
Sub-Investment Advisory Agreement For Comstock Partners Strategy Fund, Inc.
The Existing and New Agreements for Comstock Partners Strategy Fund, Inc. are
substantially identical except for their dates.
Under the Existing Agreement for this Fund, Dreyfus manages the short-term
cash and cash equivalent investments of the Fund and provides investment
research and other advice regarding the Fund's portfolio. Dreyfus also provides
general advice regarding economic factors and trends, including statistical and
other factual information. For such services, at no cost to the Fund, Comstock
Partners, Inc., the Fund's investment adviser ("Comstock Partners"), pays
Dreyfus a monthly fee at an annual rate of .15% of the Fund's average daily net
assets. For the fiscal year ended April 30, 1994, sub-investment advisory fees
paid by Comstock Partners to Dreyfus amounted to $858,128.
In connection with being retained as a sub-investment adviser to Dreyfus
Capital Value Fund, Inc., Comstock Partners and Dreyfus entered into an
agreement not to compete. The agreement provides that if Comstock Partners acts
as an investment adviser to a registered closed-end investment company, which
Comstock Partners Strategy Fund, Inc. was before it converted into an open-end
investment company, Comstock Partners will pay Dreyfus a fee at the annual rate
of not less than .10% of such closed-end investment company's average net
assets. So long as the New Agreement for this Fund is in effect, Comstock
Partners will be deemed to have satisfied its obligation to make payments with
respect to Comstock Partners Strategy Fund, Inc. under such agreement not to
compete.
The New Agreement for Comstock Partners Strategy Fund, Inc. is set forth on
its Fund Exhibit. Fund stockholders should review carefully the New Agreement
and the accompanying notes included at the end of the Fund Exhibit.
PORTFOLIO TRANSACTIONS
With respect to each Fund denominated as "Money Market" on its Fund Exhibit,
portfolio securities ordinarily are purchased directly from the issuer or from
an underwriter or a market maker for the securities. Usually no brokerage
commissions are paid by these Funds for such purchases. Purchases from
underwriters of portfolio securities may include a concession paid by the
issuer to the underwriter and the purchase price paid to, and sales price
received from, market makers for the securities may reflect the spread between
the bid and asked price. No brokerage commissions have been paid by any of
these Funds to date.
With respect to each Fund denominated as "Bond" on its Fund Exhibit,
portfolio securities ordinarily are purchased from and sold to parties acting
as either principal or agent. Newly-issued securities ordinarily are purchased
directly from the issuer or from an underwriter; other purchases and sales
usually are placed with those dealers from which it appears that the best price
or execution will be obtained. Usually no brokerage commissions, as such, are
paid by these Funds for such purchases and sales, although the price paid
usually includes an undisclosed compensation to the dealer acting as agent. The
prices paid to underwriters of newly-issued securities usually include a
concession paid by the issuer
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to the underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by any of these Funds to date.
With respect to each Fund denominated as "Equity" on its Fund Exhibit,
allocation of brokerage transactions, including their frequency, is made in the
investment adviser's best judgment and in a manner deemed fair and reasonable
to stockholders. Brokers also are 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,
in certain cases, may result from two or more clients Dreyfus might advise
being engaged simultaneously in the purchase or sale of the same security. The
brokerage commissions paid by each of these Funds during its last fiscal year
is set forth on its Fund Exhibit.
With respect to Comstock Partners Strategy Fund, Inc., Dreyfus engages in
portfolio transactions only with respect to certain short-term instruments.
Such portfolio transactions are conducted in the manner described above with
respect to Funds denominated as "Money Market" on their Fund Exhibits.
Transactions are allocated to various dealers by each Fund's Investment
Officers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Fund's investment adviser to supplement its own
research and analysis with the views and information of other securities firms.
In certain circumstances, sales of Fund shares by a broker may be taken into
consideration. If during a Fund's last fiscal year, transactions in newly
issued debt obligations in fixed price public offerings were directed to an
underwriter or underwriters because of, among other things, research services
provided, the amount of such transactions are set forth on its Fund Exhibit.
Similarly, if during a Fund's last fiscal year, Dreyfus, as such Fund's
investment adviser, directed the Fund's brokerage transactions to a broker or
brokers because of research services provided, the amount of such transactions
and related commissions are set forth on its Fund Exhibit. No brokerage
commissions have been paid by a Fund to its distributor.
Research services furnished by brokers through which a given Fund effects
securities transactions may be used by Dreyfus (and, for Funds with sub-
investment advisers, the sub-investment adviser) in advising other funds it
advises and, conversely, research services furnished to Dreyfus (and, if
applicable, the sub-investment adviser) by brokers in connection with other
funds Dreyfus (and, if applicable, the sub-investment adviser) advises may be
used by Dreyfus (and, if applicable, the sub-investment adviser) in advising
that Fund. Although it is not possible to place a dollar value on these
services, it is the opinion of Dreyfus that the receipt and study of such
services should not reduce the overall expenses of its research department.
INFORMATION ABOUT THE FUNDS' DISTRIBUTOR
Dreyfus Service Corporation ("DSC"), a wholly-owned subsidiary of Dreyfus,
currently acts as the exclusive distributor of each open-end Fund's shares.
Each such Fund currently sells shares on a continuous basis through DSC, as
agent. DSC is not obligated to sell a particular amount of shares. DSC has
offices at 200 Park Avenue, New York, New York 10166.
To comply with various regulatory requirements applicable as a result of the
Transaction, effective upon the consummation of the Transaction, Premier
Distributor, Inc., located at One Exchange Place, Boston, Massachusetts 02109,
will serve as each open-end Fund's distributor (the "New Distributor"). The New
Distributor is a subsidiary of Institutional Administration Services, Inc., the
parent company of which is Boston Institutional Group, Inc. Institutional
Administration Services, Inc. provides mutual fund administration services.
Each such Fund will sell its shares on a continuous basis through the New
Distributor, as agent. The New Distributor will not be obligated to sell a
particular amount of shares.
SHAREHOLDER SERVICES PLANS
Each Fund designated on its Fund Exhibit as being subject to a "Reimbursement
Plan" is subject to a Shareholder Services Plan pursuant to which the Fund has
agreed to reimburse DSC an amount not to exceed an annual rate of .25 of 1% of
the value of the Fund's average daily net assets for certain allocated expenses
of providing personal services to, and/or maintaining accounts of,
stockholders. The services provided may include personal services relating to
stockholder accounts, such as answering stockholder inquiries regarding the
Fund and providing reports and other
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information, and services related to the maintenance of stockholder accounts.
These Shareholder Services Plans are not adopted under Rule 12b-1 under the Act
and do not require any stockholder vote. The amount each such Fund reimbursed
to DSC in respect of its last fiscal year under a Shareholder Services Plan is
set forth on its Fund Exhibit.
LEGAL PROCEEDINGS PERTAINING TO THE TRANSACTION
Class Action by Fund Stockholders
On March 23, 1994, two stockholders of Dreyfus Liquid Assets, Inc. ("Dreyfus
Liquid Assets") and Dreyfus Growth Opportunity Fund, Inc. ("Dreyfus Growth")
filed a complaint in the Supreme Court of the State of New York, County of
Queens, naming Dreyfus and DSC as defendants, and Dreyfus Liquid Assets and
Dreyfus Growth, individually and as representatives of the management
investment companies for which Dreyfus serves as investment adviser under the
Act, as nominal defendants. The complaint is brought derivatively on behalf of
Dreyfus Liquid Assets and Dreyfus Growth, individually and as representatives
of The Dreyfus Family of Funds.
In the complaint, the plaintiffs allege, among other things, that Dreyfus and
DSC violated their fiduciary duties by receiving pecuniary benefits from the
sale of their "trust offices" in connection with the Transaction. The
plaintiffs allege that the Transaction would not satisfy the requirements of
Section 15(f) of the Act so as to permit Dreyfus to derive a benefit from the
assignment of Dreyfus' management contracts with the Funds because allegedly
(i) 75% of the various Funds' Boards are not "non-interested" persons within
the meaning of the Act, and (ii) the Transaction will impose an "unfair burden"
on the Funds. Plaintiffs allege that many of the "non-interested" Board members
serve on multiple Boards of Funds and thereby earn substantial sums of money
for limited work and have close business relationships with Dreyfus, and
therefore are "interested" within the meaning of the Act. The plaintiffs
further allege that Dreyfus and DSC breached their respective fiduciary duties
by charging the Funds excessive fees of at least $55 million, in order to
maximize profits earned from the sale of the "trust offices," and by acting
solely to maximize their own profits through the proposed sale of the "trust
offices" to Mellon, in violation of Section 15(f) of the Act. Consequently, the
plaintiffs allege that the Transaction would impose an "unfair burden" on the
Funds.
The action seeks, among other things, to enjoin Dreyfus and DSC from selling
the profits from the "trust offices" to Mellon, or, in the event that the
Transaction is consummated, a rescission or accounting of all profits earned by
Dreyfus and DSC as a result of the sale of the "trust offices," unspecified
compensatory damages, costs and disbursements.
On April 12, 1994, defendants removed this action to the United States
District Court for the Eastern District of New York. Dreyfus believes that the
complaint lacks merit and intends to defend it vigorously.
Class Action by Dreyfus Stockholders
Six purported class action suits by six public stockholders of Dreyfus were
filed in December 1993 in the Supreme Court of the State of New York, County of
New York, naming Dreyfus, Mellon and the individual directors of Dreyfus as
defendants.
In these complaints, plaintiffs allege, among other things, that Dreyfus and
its directors breached their fiduciary duties to the public stockholders of
Dreyfus by agreeing to the sale of Dreyfus at a price which does not maximize
stockholder value; failing to include a collar, or other form of price
protection; placing the defendants' interests above those of Dreyfus'
stockholders; including in the Merger Agreement a $50 million termination fee;
and failing to create the conditions for an open and vigorous auction of
Dreyfus. The complaint seeks injunctive relief as well as compensatory and
punitive damages.
Dreyfus believes that these complaints lack merit and intends to defend them
vigorously.
Application Filed with the SEC
On December 22, 1993, six stockholders of various Funds filed an application
with the SEC for a statutory determination that the "independent" Board members
of the Funds are "interested" Board members within the meaning of the Act,
thereby prohibiting them from voting on each Fund's New Agreement and other
related matters in connection with the Transaction (the "Application"). On
April 1, 1994, the SEC rejected the Application. In the Application, the
applicants alleged, among other things, that (i) many of the "independent"
Board members serve on multiple boards of
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Funds, (ii) as a result of such service, such Board members earn material sums
of money for very limited services, (iii) such Board members have material
business or professional relationships with Dreyfus, and (iv) these Board
members, therefore, are "interested." The Application further claimed that
common service on multiple boards with "interested" Board members who are
employees of Dreyfus renders the "independent" Board members "interested." The
applicants also alleged that since the "independent" Board members of the Funds
are "interested," the Board members are not qualified to make decisions on
behalf of the Funds.
Applicants further noted that as a result of the Transaction, the Existing
Agreements will terminate. Applicants contended that truly independent Board
members might well be in a position to bargain for possibly more advantageous
terms in the New Agreements than had been negotiated with respect to the
Existing Agreements. In the Application, applicants sought (i) a hearing before
the SEC to consider the Application, (ii) discovery from Dreyfus and Mellon
prior to such hearing, as such is permitted under the Administrative Procedure
Act, and (iii) an order to Dreyfus to cease and desist any efforts to obtain
approval by the Funds' stockholders or the Funds' Boards of the Transaction or
pending the hearing and a final ruling on the Application by the SEC. The SEC
determined that the Applicants did not have a right to initiate a hearing;
rather, the discretion to initiate such a hearing rests with the SEC, and the
SEC determined not to hold a hearing.
The "independent" Board members opposed the Application on the grounds that
(i) the Board members are not interested persons within the meaning of Section
2(a)(19) of the Act, and (ii) the legislative history, court and SEC decisions,
and industry practice all recognize that service on multiple boards within a
mutual fund complex does not render a Board member "interested" within the
meaning of the Act.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
Approval of its New Agreement with respect to each Fund will require the
affirmative vote of a "majority of the outstanding voting securities" of such
Fund (or Series, for Series Funds), which for this purpose means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares
of such Fund (or Series) or (2) 67% or more of the shares of such Fund (or
Series) present at the meeting if more than 50% of the outstanding shares of
such Fund (or Series) are represented at the meeting in person or by proxy (a
"Majority Vote"). If the stockholders of a Fund do not approve the New
Agreement, Mellon and Dreyfus nevertheless intend to proceed with the
Transaction (assuming all conditions precedent, including the 90% Condition,
have been satisfied or waived) and, in such case, the Fund's Existing Agreement
will terminate automatically. In that event, the Fund's Board will take such
further action as it may deem to be in the best interests of the Fund's
stockholders.
To provide for the possibility that the Transaction may be consummated before
an effective stockholder vote has been received from one or more Funds, the
Funds intend to apply for exemptive relief from the SEC to permit, without
formal stockholder approval, (i) implementation of the New Agreements (other
than for Dreyfus Socially Responsible Fund and Dreyfus Third Century Fund),
(ii) continuation of the Existing Agreements for Dreyfus Socially Responsible
Fund and Dreyfus Third Century Fund and (iii) implementation of the new sub-
investment advisory agreements between Dreyfus and the sub-investment advisers
of Dreyfus Global Bond Fund, Inc., Dreyfus International Equity Fund, Inc.,
Dreyfus Strategic Growth, L.P., the International Equity Portfolio of Dreyfus
Variable Investment Fund and Premier Growth Fund, Inc. The requested exemption
would cover an interim period of not more than 120 days (the "Interim Period")
beginning on the date of consummation of the Transaction, and continuing
through the date the New Agreements and sub-investment advisory agreements are
approved or disapproved by the stockholders of the respective Funds. No
assurance can be given that the Funds will receive the necessary regulatory
approval to permit implementation of the New Agreements and new sub-investment
advisory agreements or continuation of the Existing Agreements for Dreyfus
Socially Responsible Fund and Dreyfus Third Century Fund during the Interim
Period, although substantially similar arrangements proposed by other
investment companies have received regulatory approval in the past.
THE BOARD OF EACH FUND, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS,
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
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PROPOSAL 2. ELECTION OF BOARD MEMBERS
STOCKHOLDERS OF EACH FUND, OTHER THAN COMSTOCK PARTNERS STRATEGY FUND, INC.,
DREYFUS ASSET ALLOCATION FUND, INC., DREYFUS BASIC MUNICIPAL FUND, DREYFUS
FLORIDA MUNICIPAL MONEY MARKET FUND, DREYFUS FOCUS FUNDS, INC., DREYFUS GLOBAL
BOND FUND, INC., DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND, DREYFUS
INTERNATIONAL EQUITY FUND, INC., DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL
BOND FUND, DREYFUS VARIABLE INVESTMENT FUND, PREMIER INSURED MUNICIPAL BOND
FUND AND PREMIER STATE MUNICIPAL BOND FUND, VOTE ON THIS PROPOSAL.
It is proposed that stockholders of each Fund to which this Proposal relates
consider the election as Board members of the individuals (the "Nominees")
listed in Part B of the Fund Exhibit pertaining to their Fund. Biographical
information about the Nominees and other relevant information is set forth on
such Fund Exhibit.
The persons named in the accompanying form of proxy intend to vote each such
proxy "FOR" the election of the Nominees, unless stockholders specifically
indicate on their proxies the desire to withhold authority to vote for
elections to office. It is not contemplated that any Nominee will be unable to
serve as a Board member for any reason, but if that should occur prior to the
meeting, the proxy holders reserve the right to substitute another person or
persons of their choice as nominee or nominees.
Each Nominee has consented to being named in this proxy statement and has
agreed to serve as a Board member if elected. If the Transaction is
consummated, to comply with then applicable bank regulatory requirements, each
Nominee who currently is a director, officer or employee of Dreyfus or any
subsidiary or affiliate, other than David W. Burke (who has advised that he
will resign from his offices in Dreyfus upon consummation of the Transaction)
as respects certain Funds, will resign as a Board member. Similarly, to comply
with bank regulatory requirements, each Fund officer listed in Part B of the
Fund Exhibit who is a director, officer or employee of Dreyfus or any
subsidiary or affiliate will resign as an officer of the Fund if the
Transaction is consummated. Employees of the New Distributor will serve as Fund
officers, other than the Investment Officers. The Fund's Investment Officers
will remain the same.
Except as provided on the Fund Exhibit, none of the Funds has a standing
audit or compensation committee or any committees performing similar functions.
The audit committee, where appointed, of a Fund reviews the Fund's financial
statements and other audit-related matters as they arise throughout the year.
Except as provided on its Fund Exhibit, each Fund has a standing nominating
committee comprised of its Board members who are not "interested persons" of
the Fund, the function of which is to select and nominate all candidates who
are not "interested persons" for election to the Fund's Board. Except as set
forth on its Fund Exhibit, Board members and officers of a Fund, in the
aggregate, owned less than 1% of such Fund's outstanding shares.
REMUNERATION OF BOARD MEMBERS, OFFICERS AND OTHERS
The Funds do not pay any remuneration to their officers and Board members,
other than fees and expenses to Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
Dreyfus. The Funds typically pay Board members an annual retainer and a per
meeting fee and reimburse them for their expenses. For each Fund's most recent
fiscal year, the number of Board meetings that were held, the schedule of fees
payable by the Fund to Board members and the amount of fees and expenses
received by Board members as a group are set forth on its Fund Exhibit.
REQUIRED VOTE
For each Fund, election of each of the Nominees listed in Part B of its Fund
Exhibit requires the affirmative vote of a plurality of the votes cast at the
Fund's meeting.
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PROPOSAL 3. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
STOCKHOLDERS OF EACH FUND, OTHER THAN COMSTOCK PARTNERS STRATEGY FUND, INC.,
VOTE ON THIS PROPOSAL.
The Act requires that each Fund's independent auditors be selected by a
majority of those Board members who are not "interested persons" (as defined in
the Act) of the Fund and that the employment of such independent auditors be
conditioned on the right of the Fund, by vote of a majority of its outstanding
securities at any meeting called for that purpose, to terminate such employment
forthwith without penalty. Each Fund's Board, including a majority of its
members who are not "interested persons" of such Fund, approved the selection
of Ernst & Young (the "Auditors") for such Fund's current fiscal year at a
Board meeting held on the date set forth on its Fund Exhibit.
The selection by the Board of the Auditors as independent auditors for the
current fiscal year is submitted to the stockholders for ratification. Apart
from its fees as independent auditors and certain consulting fees, neither the
Auditors nor any of its partners has a direct, or material indirect, financial
interest in any Fund or Dreyfus.
The Auditors, a major international independent accounting firm, have been
the auditors of each Fund since its inception (except General New York
Municipal Bond Fund, Inc. for which they have been auditors since November 1,
1987). Each Fund's Board believes that the continued employment of the services
of the Auditors for the current fiscal year would be in the Fund's best
interests.
A representative of the Auditors is expected to be present at each Fund's
meeting and will have the opportunity to make a statement and will be available
to respond to appropriate questions.
EACH FUND'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE SELECTION OF THE AUDITORS AS
INDEPENDENT AUDITORS OF THE FUND.
PROPOSAL 4. APPROVAL OF RULE 12B-1 PLANS
ONLY THE STOCKHOLDERS OF FUNDS CURRENTLY SUBJECT TO RULE 12B-1 PLANS VOTE ON
THIS PROPOSAL.
INTRODUCTION
Rule 12b-1 (the "Rule"), adopted by the SEC under the Act, provides, among
other things, that an investment company may bear expenses of distributing its
shares only pursuant to a plan (a "12b-1 Plan") adopted in accordance with the
Rule. Four different types of 12b-1 Plans are in effect with respect to the
Funds. Each type is described below. The Fund Exhibit indicates the type of
12b-1 Plan, if any, to which each Fund is subject and the amount each such Fund
has paid under its 12b-1 Plan during its last fiscal year.
To comply with various regulatory requirements applicable as a result of the
Transaction, it is proposed that, effective upon the consummation of the
Transaction, each of the 12b-1 Plans be amended as described below. The
principal change results from the appointment of the New Distributor to replace
DSC as each Fund's distributor and the payment to it of certain amounts under
the 12b-1 Plans. In no case is the rate a Fund pays under its 12b-1 Plan
proposed to be increased. A form of proposed 12b-1 Plan (each, a "New Plan")
applicable to each Fund currently subject to a Rule 12b-1 Plan is included as a
part of its Fund Exhibit.
Stockholders should review the Fund Exhibit to determine the type of 12b-1
Plan, if any, applicable to their Funds and review the applicable section below
that describes the relevant 12b-1 Plan.
TYPE 1 PLANS
Existing Plan. Each Fund adopting this type of Rule 12b-1 Plan pays DSC for
advertising, marketing and distributing the Fund's shares and for Servicing (as
defined below) at the annual rate set forth on its Fund Exhibit. Under the 12b-
1 Plan, DSC makes payments to certain financial institutions, securities
dealers and other industry professionals (collectively, "Service Agents") for
administration, for servicing Fund stockholders who also are their clients
and/or for distribution. Service Agents receive such fees in respect of the
average daily value of the Fund's shares owned by stockholders for whom the
Service Agent performs Servicing or for whom the Service Agent is the dealer or
holder of record. The 12b-1 Plan also provides that Dreyfus may pay Service
Agents for Servicing out of its management fee, its past profits or any other
source available to it. The fees payable to DSC under the 12b-1 Plan for
advertising, marketing
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and distributing the Fund's shares and for payments to Service Agents are
payable without regard to actual expenses incurred.
Proposed New Plan. Each Fund that had adopted a Type 1 Plan has adopted a New
Plan, subject to stockholder approval, under which it will (a) reimburse the
New Distributor for payments to third parties for distributing the Fund's
shares and servicing stockholder accounts and (b) pay Dreyfus, DSC or any
affiliate for advertising and marketing relating to the Fund and for servicing
stockholder accounts. Certain ancillary costs are borne pursuant to the New
Plan. See "Applicable to Type 1 Plans, Certain Type 2 Plans and Type 3 Plans--
Ancillary Costs" below. The rate payable by each Fund under its New Plan is the
same as it pays under its existing 12b-1 Plan. Under the New Plan, the New
Distributor, Dreyfus and DSC are permitted to pay Service Agents.
TYPE 2 PLANS
Existing Plan. Each Fund adopting this type of 12b-1 Plan pays DSC for
advertising, marketing and distributing Fund shares at the annual rate set
forth on its Fund Exhibit. Under the 12b-1 Plan, DSC may make payments to
Service Agents in respect of these services. Service Agents receive such fees
in respect of the average daily value of Fund shares owned by their clients.
The fees payable to DSC under the 12b-1 Plan for advertising, marketing and
distributing Fund shares and for payments to Service Agents are payable without
regard to actual expenses. As indicated on the Fund Exhibit, some of the Funds
have adopted this type of 12b-1 Plan only with respect to their Class B shares.
Each of these Funds also has adopted a Shareholder Services Plan (which is
not subject to the Rule) under which the Fund pays DSC for the provision of
certain services to Fund stockholders 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 stockholder accounts, such as answering
stockholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of stockholder accounts.
DSC may make payments to Service Agents in respect of these services. DSC
determines the amounts to be paid to Service Agents. The Shareholder Services
Plan is not subject to stockholder vote. The amount each such Fund paid under
its Shareholder Services Plan during its last fiscal year is set forth on its
Fund Exhibit.
Proposed New Plan. Each of Dreyfus Asset Allocation Fund, Inc., Dreyfus Focus
Funds, Inc., Dreyfus Global Bond Fund, Inc. and Dreyfus International Equity
Fund, Inc. has adopted a New Plan, subject to stockholder approval, under which
it would (a) reimburse the New Distributor for payments to third parties for
distributing the Fund's shares and (b) pay Dreyfus, DSC or any affiliate for
advertising and marketing relating to the Fund. Certain ancillary costs are
borne pursuant to the New Plan. See "Applicable to Type 1 Plans, Certain Type 2
Plans and Type 3 Plans--Ancillary Costs" below. The rate payable by each Fund
under its New Plan is the same as it pays under its existing 12b-1 Plan. Under
the New Plan, the New Distributor may pay third parties in respect of
distribution services.
Each of Dreyfus Capital Value Fund (A Premier Fund), Premier Global
Investing, Dreyfus Strategic Investing, Premier Growth Fund, Inc., Premier
Insured Municipal Bond Fund, Premier State Municipal Bond Fund, Premier
California Municipal Bond Fund, Premier GNMA Fund, Premier New York Municipal
Bond Fund and Premier Municipal Bond Fund has adopted a New Plan, subject to
stockholder approval, under which it would pay the New Distributor for
distributing the Fund's Class B shares a fee at the annual rate set forth on
its Fund Exhibit. The rate payable by each Fund under its New Plan is the same
as each Fund pays under its existing 12b-1 Plan.
TYPE 3 PLANS
(Only Dreyfus Appreciation Fund, Inc., General Government Securities Money
Market Fund, Inc. and General Money Market Fund, Inc.)
Existing Plan. Each Fund adopting this type of 12b-1 Plan directly bears the
costs of preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the 12b-1 Plan. In
addition, DSC has entered into service agreements with Service Agents who
receive fees in respect of the Fund's shares owned by stockholders for whom the
Service Agent is the dealer or holder of record, or for whom the Service Agent
performs Servicing. These fees are paid: first, in amounts to be reimbursed by
the Fund to Dreyfus or DSC, and described in the next sentence; and next, by
Dreyfus out of its investment advisory fee, its past profits or any other
source available to it. The Fund reimburses Dreyfus or DSC, as the case may be,
for payments made to a Service Agent at the annual
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rate set forth on the Fund Exhibit of the average daily value of the Fund
shares owned by clients of such Service Agent during the period payments for
Servicing are being made to it. DSC is entitled to receive a similar fee for
Servicing in respect of stockholders that cease being clients of a Service
Agent. The fees payable for Servicing are payable without regard to actual
expenses incurred.
Proposed New Plan. Each Fund that had adopted a Type 3 Plan has adopted a New
Plan, subject to stockholder approval, under which (a) the New Distributor
would pay for distributing the Fund's shares and servicing stockholder accounts
and (b) Dreyfus, DSC or any affiliate would pay for servicing stockholder
accounts. Each would be reimbursed by the Fund at the same aggregate annual
rate as under the existing 12b-1 Plan. Certain ancillary costs are borne
pursuant to the New Plan. See "Applicable to Type 1 Plans, Certain Type 2 Plans
and Type 3 Plans--Ancillary Costs" below. Under the New Plan, the New
Distributor, Dreyfus and DSC are permitted to pay Service Agents and DSC is
permitted to be a Service Agent and be reimbursed by the New Distributor.
TYPE 4 PLANS
(Only Dreyfus Cash Management, Dreyfus Cash Management Plus, Inc., Dreyfus
Government Cash Management, Dreyfus Institutional Short Term Treasury Fund,
Dreyfus Municipal Cash Management Plus, Dreyfus New York Municipal Cash
Management, Dreyfus Tax Exempt Cash Management, Dreyfus Treasury Cash
Management and Dreyfus Treasury Prime Cash Management)
Existing Plan. Each Fund adopting this type of 12b-1 Plan pays DSC, out of
the assets attributable to its Class B shares only, for advertising, marketing
and distributing Class B shares and for the provision of certain services to
the holders of Class B shares a fee at the annual rate of .25 of 1% of the
value of the average daily net assets of Class B. The services provided may
include personal services relating to stockholder accounts, such as answering
stockholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of such stockholder
accounts. Under the 12b-1 Plan, DSC may make payments to Service Agents in
respect of these services. DSC determines the amounts to be paid to Service
Agents. The fees payable to DSC under the 12b-1 Plan for advertising, marketing
and distributing Class B shares and for payments to Service Agents are payable
without regard to actual expenses incurred.
Proposed New Plan. Each Fund that had adopted a Type 4 Plan has adopted a New
Plan, subject to stockholder approval, under which the Fund would (a) reimburse
the New Distributor for payments to third parties for distributing the Fund's
Class B shares and (b) pay Dreyfus, DSC or any affiliate for advertising or
marketing relating to the Fund's Class B shares and for providing certain
services relating to Class B stockholder accounts, such as answering
stockholder inquiries regarding the Fund and providing reports and other
information, and services relating to the maintenance of stockholder accounts.
The rate payable by each Fund under its New Plan is the same as it pays under
its existing 12b-1 Plan. Under the New Plan, the New Distributor, Dreyfus and
DSC are permitted to pay Service Agents.
APPLICABLE TO TYPE 1 PLANS AND TYPE 3 PLANS
Servicing may include, among other things, one or more of the following:
answering client inquiries regarding the Fund; assisting clients in changing
dividend options, account designations and addresses; performing subaccounting;
establishing and maintaining stockholder accounts and records; processing
purchase and redemption transactions; investing client cash account balances
automatically in Fund shares; providing periodic statements showing a client's
account balance and integrating such statements with those of other
transactions and balances in the client's other accounts serviced by the
Service Agent; arranging for bank wires; and such other services as the Fund
may request, to the extent the Service Agent is permitted by applicable
statute, rule or regulation.
APPLICABLE TO TYPE 1 PLANS, CERTAIN TYPE 2 PLANS AND TYPE 3 PLANS--ANCILLARY
COSTS
(Applicable to Existing and New Plans for each Fund subject to a Type 1 Plan
or a Type 3 Plan and for each of Dreyfus Asset Allocation Fund, Inc., Dreyfus
Focus Funds, Inc., Dreyfus Global Bond Fund, Inc. and Dreyfus International
Equity Fund, Inc.)
The Fund bears the costs of preparing and printing prospectuses and
statements of additional information used for regulatory purposes and for
distribution to existing Fund stockholders. Under the 12b-1 Plan, the Fund or a
particular Class, as the case may be, bears (a) the costs of preparing,
printing and distributing prospectuses and statements of
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additional information used for other purposes and (b) the costs associated
with implementing and operating the 12b-1 Plan, the aggregate of such amounts
not to exceed in any fiscal year of the Fund the greater of $100,000 or .005 of
1% of the value of the average daily net assets of the Fund or Class for such
fiscal year.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
Approval of the New Plan with respect to each Fund, except Funds adopting a
New Plan with respect to a particular Class of shares only, will require a
Majority Vote. For Funds adopting a New Plan with respect to a particular Class
of shares only, approval of the New Plan will require a Majority Vote of only
that Class of shares. If the stockholders of a Fund do not approve its New
Plan, that Fund's Board would consider alternative distribution arrangements
for the Fund. In that event, the Fund's Board will take such further action as
it may deem to be in the best interests of the Fund's stockholders.
THE BOARD OF EACH FUND, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS,
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 5. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR DREYFUS
GLOBAL BOND FUND, INC.
ONLY THE STOCKHOLDERS OF DREYFUS GLOBAL BOND FUND, INC. VOTE ON THIS
PROPOSAL.
Dreyfus serves as investment adviser to Dreyfus Global Bond Fund, Inc.
("DGBF") under an Existing Agreement described under Proposal 1. It has engaged
M&G Investment Management Limited ("M&G"), located at Three Quays Tower Hill,
London EC3R 6BQ, England, to serve as DGBF's sub-investment adviser under a
sub-investment advisory agreement (the "Existing DGBF Agreement"). As of March
31, 1994, M&G managed approximately $20.9 billion in assets.
The Existing DGBF Agreement provides, in relevant part, for its automatic
termination if Dreyfus' Existing Agreement in respect of DGBF terminates, which
will occur if the Transaction is consummated. Accordingly, at the Board meeting
at which DGBF's New Agreement was considered, DGBF's Board considered the
approval of a sub-investment advisory agreement identical to the Existing DGBF
Agreement (the "New DGBF Agreement"), except with respect to its date. A copy
of the New DGBF Agreement is set forth on DGBF's Fund Exhibit.
The New DGBF Agreement provides that M&G, subject to Dreyfus' supervision and
approval, will provide investment advisory assistance and the day-to-day
management of DGBF's investments, as well as investment research and
statistical information.
The fee payable under the New DGBF Agreement is the same as in the Existing
DGBF Agreement. For the period from March 18, 1994 (commencement of operations)
through April 30, 1994, no sub-investment advisory fee was paid by Dreyfus to
M&G under the Existing DGBF Agreement pursuant to an undertaking in effect.
The following persons are officers and/or directors of M&G: Laurence E.
Linaker, Chairman of the Board of Directors; David L. Morgan, Managing Director
and a director; John P. Allard, John W. Boeckmann, Gordon P. Craig, Robert A.R.
Hayes, Richard S. Hughes, David J. Hutchins, Peter D. Jones, James R.D. Korner,
Michael G.A. McLintock, Ewen A. Macpherson, Paul R. Marsh, Nigel D. Morrison,
Roger D. Nightinghale, Paul D.A. Nix, William J. Nott, Neil A. Pegrum, Duncan
N. Robertson, J. Christopher Whitaker, directors; and Anthony J. Ashplant,
Secretary.
An audited consolidated balance sheet of M&G as of September 30, 1993 is
included in DGBF's Fund Exhibit.
DGBF's portfolio transactions are undertaken as described in Proposal 1.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the New DGBF Agreement. The
consequence of failure to obtain the requisite vote is as set forth in Proposal
1.
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DGBF'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 6. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR DREYFUS
INTERNATIONAL EQUITY FUND, INC.
ONLY THE STOCKHOLDERS OF DREYFUS INTERNATIONAL EQUITY FUND, INC. VOTE ON THIS
PROPOSAL.
Dreyfus serves as investment adviser to Dreyfus International Equity Fund,
Inc. ("DIEF") under an Existing Agreement described under Proposal 1. It has
engaged M&G Investment Management Limited ("M&G"), located at Three Quays Tower
Hill, London EC3R 6BQ, England, to serve as DIEF's sub-investment adviser under
a sub-investment advisory agreement (the "Existing DIEF Agreement"). As of
March 31, 1994, M&G managed approximately $20.9 billion in assets.
The Existing DIEF Agreement provides, in relevant part, for its automatic
termination if Dreyfus' Existing Agreement in respect of DIEF terminates, which
will occur if the Transaction is consummated. Accordingly, at the Board meeting
at which DIEF's New Agreement was considered, DIEF's Board considered the
approval of a sub-investment advisory agreement identical to the Existing DIEF
Agreement (the "New DIEF Agreement"), except with respect to its date. A copy
of the New DIEF Agreement is set forth on DIEF's Fund Exhibit.
The New DIEF Agreement provides that M&G, subject to Dreyfus' supervision and
approval, will provide investment advisory assistance and the day-to-day
management of DIEF's investments, as well as investment research and
statistical information.
The fee payable under the New DIEF Agreement is the same as in the Existing
DIEF Agreement. For the period from June 29, 1993 (commencement of operations)
through March 31, 1994, Dreyfus paid M&G $205,451 under the Existing DIEF
Agreement.
The following persons are officers and/or directors of M&G: Laurence E.
Linaker, Chairman of the Board of Directors; David L. Morgan, Managing Director
and a director; John P. Allard, John W. Boeckmann, Gordon P. Craig, Robert A.R.
Hayes, Richard S. Hughes, David J. Hutchins, Peter D. Jones, James R.D. Korner,
Michael G.A. McLintock, Ewen A. Macpherson, Paul R. Marsh, Nigel D. Morrison,
Roger D. Nightinghale, Paul D.A. Nix, William J. Nott, Neil A. Pegrum, Duncan
N. Robertson, J. Christopher Whitaker, directors; and Anthony J. Ashplant,
Secretary.
An audited consolidated balance sheet of M&G as of September 30, 1993 is
included in DIEF's Fund Exhibit.
DIEF's portfolio transactions are undertaken as described in Proposal 1.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the New DIEF Agreement. The
consequence of failure to obtain the requisite vote is as set forth in Proposal
1.
DIEF'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 7. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR DREYFUS
STRATEGIC GROWTH, L.P.
ONLY THE STOCKHOLDERS OF DREYFUS STRATEGIC GROWTH, L.P. VOTE ON THIS
PROPOSAL.
Dreyfus serves as investment adviser to Dreyfus Strategic Growth, L.P.
("DSG") under an Existing Agreement described under Proposal 1. It has engaged
Osprey Funds Management, a Maryland Limited Partnership (formerly Baltimore
Street Capital V Limited Partnership) ("OFM"), located at 300 East Lombard
Street, Suite 1420, Baltimore,
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Maryland 21202, to serve as DSG's sub-investment adviser under a sub-investment
advisory agreement (the "Existing DSG Agreement"). As of March 31, 1994, OFM
managed approximately $164 million in assets.
The Existing DSG Agreement provides, in relevant part, for its automatic
termination if Dreyfus' Existing Agreement in respect of DSG terminates, which
will occur if the Transaction is consummated. Accordingly, at the Board meeting
at which DSG's New Agreement was considered, DSG's Board considered the
approval of a sub-investment advisory agreement identical to the Existing DSG
Agreement (the "New DSG Agreement"), except with respect to its date. A copy of
the New DSG Agreement is set forth on DSG's Fund Exhibit.
The New DSG Agreement provides that OFM, subject to Dreyfus' supervision and
approval, will provide investment advisory assistance and the day-to-day
management of DSG's investments, as well as investment research and statistical
information.
The fee payable under the New DSG Agreement is the same as in the Existing
DSG Agreement. For the period from January 1, 1994 (the date OFM was engaged)
through May 5, 1994, Dreyfus paid OFM $32,662 under the Existing DSG Agreement.
The sole officer of OFM is Robert K. Jermain. The general partners of OFM are
Alex. Brown Management Services, Inc. and Mako Investments, Inc., whose
President is Mr. Jermain.
An audited balance sheet of OFM as of December 31, 1993 is included in DSG's
Fund Exhibit.
DSG's portfolio transactions are undertaken as described in Proposal 1.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the New DSG Agreement. The consequence
of failure to obtain the requisite vote is as set forth in Proposal 1.
DSG'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 8. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR
DREYFUS VARIABLE INVESTMENT FUND'S INTERNATIONAL EQUITY PORTFOLIO
ONLY THE STOCKHOLDERS OF DREYFUS VARIABLE INVESTMENT FUND'S INTERNATIONAL
EQUITY PORTFOLIO VOTE ON THIS PROPOSAL.
Dreyfus serves as investment adviser to Dreyfus Variable Investment Fund's
International Equity Portfolio ("IEP") under an Existing Agreement described
under Proposal 1. It has engaged M&G Investment Management Limited ("M&G"),
located at Three Quays Tower Hill, London EC3R 6BQ, England, to serve as IEP's
sub-investment adviser under a sub-investment advisory agreement (the "Existing
IEP Agreement"). As of March 31, 1994, M&G managed approximately $20.9 billion
in assets.
The Existing IEP Agreement provides, in relevant part, for its automatic
termination if Dreyfus' Existing Agreement in respect of IEP terminates, which
will occur if the Transaction is consummated. Accordingly, at the Board meeting
at which IEP's New Agreement was considered, Dreyfus Variable Investment Fund's
Board considered the approval of a sub-investment advisory agreement identical
to the Existing IEP Agreement (the "New IEP Agreement"), except with respect to
its date. A copy of the New IEP Agreement is set forth on Dreyfus Variable
Investment Fund's Fund Exhibit for IEP.
The New IEP Agreement provides that M&G, subject to Dreyfus' supervision and
approval, will provide investment advisory assistance and the day-to-day
management of IEP's investments, as well as investment research and statistical
information.
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The fee payable under the New IEP Agreement is the same as in the Existing
IEP Agreement. IEP commenced operations on May 2, 1994 and no sub-investment
advisory fee had been paid by Dreyfus to M&G under the Existing IEP Agreement
pursuant to an undertaking in effect.
The following persons are officers and/or directors of M&G: Laurence E.
Linaker, Chairman of the Board of Directors; David L. Morgan, Managing Director
and a director; John P. Allard, John W. Boeckmann, Gordon P. Craig, Robert A.R.
Hayes, Richard S. Hughes, David J. Hutchins, Peter D. Jones, James R.D. Korner,
Michael G.A. McLintock, Ewen A. Macpherson, Paul R. Marsh, Nigel D. Morrison,
Roger D. Nightinghale, Paul D.A. Nix, William J. Nott, Neil A. Pegrum, Duncan
N. Robertson, J. Christopher Whitaker, directors; and Anthony J. Ashplant,
Secretary.
An audited consolidated balance sheet of M&G as of September 30, 1993 is
included in Dreyfus Variable Investment Fund's Fund Exhibit for IEP.
IEP's portfolio transactions are undertaken as described in Proposal 1.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the New IEP Agreement. The consequence
of failure to obtain the requisite vote is as set forth in Proposal 1.
DREYFUS VARIABLE INVESTMENT FUND'S BOARD, INCLUDING THE "NON-INTERESTED"
BOARD MEMBERS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 9. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR PREMIER
GROWTH FUND, INC.
ONLY THE STOCKHOLDERS OF PREMIER GROWTH FUND, INC. VOTE ON THIS PROPOSAL.
Dreyfus serves as investment adviser to Premier Growth Fund, Inc. ("PGF")
under an Existing Agreement described under Proposal 1. It has engaged Fayez
Sarofim & Co. ("Sarofim"), located at Two Houston Center, Suite 2907, Houston,
Texas 77010, to serve as PGF's sub-investment adviser under a sub-investment
advisory agreement (the "Existing PGF Agreement"). As of December 31, 1993,
Sarofim managed approximately $24 billion in assets for three investment
companies and numerous separate discretionary accounts.
The Existing PGF Agreement provides, in relevant part, for its automatic
termination if Dreyfus' Existing Agreement in respect of PGF terminates, which
will occur if the Transaction is consummated. Accordingly, at the Board meeting
at which PGF's New Agreement was considered, PGF's Board considered the
approval of a sub-investment advisory agreement identical to the Existing PGF
Agreement (the "New PGF Agreement"), except with respect to its date. A copy of
the New PGF Agreement is set forth on PGF's Fund Exhibit.
The New PGF Agreement provides that Sarofim, subject to Dreyfus' supervision
and approval, will provide investment advisory assistance and the day-to-day
management of PGF's investments, as well as investment research and statistical
information.
The fee payable under the New PGF Agreement is the same as in the Existing
PGF Agreement. For the period from July 15, 1993 (commencement of operations)
through May 3, 1994, no sub-investment advisory fee was paid by Dreyfus to
Sarofim under the Existing PGF Agreement pursuant to an undertaking in effect.
The following persons are officers and/or directors of Sarofim: Fayez S.
Sarofim, Chairman of the Board and President; Raye G. White, Executive Vice
President, Secretary, Treasurer and a director; Russell M. Frankel, Russel B.
Hawkins, William K. McGee, Jr., Charles E. Sheedy and Ralph B. Thomas, Senior
Vice Presidents; and Nancy Daniel, Frank P. Lee and James A. Reynolds, III,
Vice Presidents.
An audited consolidated balance sheet of Sarofim as of December 31, 1993 is
included in PGF's Fund Exhibit.
PGF's portfolio transactions are undertaken as described in Proposal 1.
18
<PAGE>
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the New PGF Agreement. The consequence
of failure to obtain the requisite vote is as set forth in Proposal 1.
PGF'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 10. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR THE
DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
ONLY THE STOCKHOLDERS OF THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
VOTE ON THIS PROPOSAL.
As described in Proposal 1 under "--Investment Advisory Agreements," Dreyfus
Socially Responsible Fund's Board has approved a New Agreement with Dreyfus
under which it is contemplated that Dreyfus will engage NCM Capital Management
Group, Inc. ("NCM") as the Fund's sub-investment adviser. NCM, located at 103
West Main Street, 4th Floor, Durham, North Carolina 27705-3638, was founded in
1986, is one of the nation's largest minority-owned investment management firms
and, as of December 31, 1993, had $2.1 billion in assets under management. To
date, NCM has not advised a registered investment company.
The Sub-Investment Advisory Agreement between Dreyfus and NCM (the "NCM
Agreement") is substantially similar to the Fund's Sub-Investment Advisory
Agreement with Tiffany (the "Prior Agreement"), except: (i) the NCM Agreement
is between Dreyfus and NCM, not between the Fund and NCM, (ii) NCM will be paid
by Dreyfus, and not by the Fund, and (iii) the fee to be paid by Dreyfus is
equal to or lower than the fee previously paid by the Fund to Tiffany. A copy
of the NCM Agreement is set forth on Dreyfus Socially Responsible Fund's Fund
Exhibit.
Under the Prior Agreement, the Fund paid Tiffany a fee at an annual rate
based on the value of the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL ASSETS AVERAGE DAILY NET ASSETS
------------ -----------------------------
<S> <C>
0 up to $200 million........................... .10 of 1%
$200 million up to $300 million................ .20 of 1%
In excess of $300 million...................... .375 of 1%
</TABLE>
Under the Prior Agreement and the Fund's Existing Agreement, the Fund paid
Dreyfus and Tiffany an aggregate annual fee of .75 of 1% of the value of the
Fund's average daily net assets. Under the Fund's New Agreement, Dreyfus would
receive an annual fee of .75 of 1% of such net assets and would pay NCM as
described in the next paragraph.
Under the NCM Agreement, Dreyfus would pay NCM out of the fee it receives
under its New Agreement with the Fund, and only to the extent thereof, a fee at
an annual rate based on the value of the Fund's average daily net assets as
follows:
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL ASSETS AVERAGE DAILY NET ASSETS
------------ -----------------------------
<S> <C>
0 up to $500 million........................... .10 of 1%
In excess of $500 million...................... .20 of 1%
</TABLE>
Under the NCM Agreement, NCM would provide investment advisory assistance and
the day-to-day management of the Fund's portfolio, as well as investment
research and statistical information for the Fund's benefit, subject to the
supervision and approval of Dreyfus and the Fund's Board.
It is proposed that the NCM Agreement would become effective upon stockholder
approval. The approval sought by these proxy materials also will cover the NCM
Agreement if it is deemed terminated by the Transaction.
19
<PAGE>
The following persons are officers and/or directors of NCM: Maceo K. Sloan,
Chairman, President and Chief Executive Officer; Justin F. Beckett, Executive
Vice President and director; Peter J. Anderson, director; Morris Goodwin, Jr.,
director; Edith H. Noel, Senior Vice President, Corporate Secretary and
Treasurer; Dennis M. McCaskill, Jr., Senior Vice President; Clifford D. Mpare,
Jr., Senior Vice President--Investments; Susan Rowe Ingram, David C. Carter,
Tammie F. Coley, Marsha G. Kee, Mary M. Ford, Stanley G. Laborde, Linda Jordan,
Victor Ross, Wendell Mackey, Lorenzo Newsome and Lawrence Verny, Vice
Presidents; Deborah C. Bronson, Vice President--Director of Operations;
Terrence S. Laster, Assistant Vice President; and Marc Reid, Assistant Vice
President--Manager of Marketing and Client Services.
NCM is a wholly-owned subsidiary of Sloan Financial Group, Inc. located at
103 West Main Street, 4th Floor, Durham, North Carolina 27705-3638. Sloan
Financial Group, Inc. is a corporation of which Maceo K. Sloan, CFA, Chairman,
President and Chief Executive Officer of NCM, owns 43%; Justin F. Beckett,
Executive Vice President and director of NCM, owns 17%; and IDS Financial
Services Inc., a wholly-owned subsidiary of American Express Company, owns 40%.
An audited balance sheet of NCM as of December 31, 1993 is included in
Dreyfus Socially Responsible Fund's Fund Exhibit.
In reaching its decision to approve the NCM Agreement, the Fund's Board
considered, among other things, the nature and quality of the services
previously and currently being provided by Dreyfus, and the nature of the
services to be provided by Dreyfus under its New Agreement and by NCM under the
NCM Agreement. The Board also considered the overall fee structure and
concluded that the aggregate fee is fair and reasonable to the Fund's
stockholders.
The Fund's portfolio transactions are undertaken as described in Proposal 1.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the NCM Agreement. If the NCM
Agreement is not approved, Dreyfus will provide day-to-day management of the
Fund's portfolio.
DREYFUS SOCIALLY RESPONSIBLE FUND'S BOARD, INCLUDING THE "NON-INTERESTED"
BOARD MEMBERS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
PROPOSAL 11. APPROVAL OF A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR THE
DREYFUS THIRD CENTURY FUND, INC.
ONLY THE STOCKHOLDERS OF THE DREYFUS THIRD CENTURY FUND, INC. VOTE ON THIS
PROPOSAL.
As described in Proposal 1 under "--Investment Advisory Agreements," Dreyfus
Third Century Fund's Board has approved a New Agreement with Dreyfus under
which it is contemplated that Dreyfus will engage NCM Capital Management Group,
Inc. ("NCM") as the Fund's sub-investment adviser. NCM, located at 103 West
Main Street, 4th Floor, Durham, North Carolina 27705-3638, was founded in 1986,
is one of the nation's largest minority-owned investment management firms and,
as of December 31, 1993, had $2.1 billion in assets under management. To date,
NCM has not advised a registered investment company.
The Sub-Investment Advisory Agreement between Dreyfus and NCM (the "NCM
Agreement") is substantially similar to the Fund's Sub-Investment Advisory
Agreement with Tiffany (the "Prior Agreement"), except: (i) the NCM Agreement
is between Dreyfus and NCM, not between the Fund and NCM, (ii) NCM will be paid
by Dreyfus, and not by the Fund, and (iii) the fee to be paid by Dreyfus is
equal to or lower than the fee previously paid by the Fund to Tiffany. A copy
of the NCM Agreement is set forth on Dreyfus Third Century Fund's Fund Exhibit.
20
<PAGE>
Under the Prior Agreement, the Fund paid Tiffany a fee at an annual rate
based on the value of the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL ASSETS AVERAGE DAILY NET ASSETS
------------ -----------------------------
<S> <C>
0 up to $200 million........................... .10 of 1%
$200 million up to $300 million................ .35 of 1%
In excess of $300 million...................... .375 of 1%
</TABLE>
Under the Prior Agreement and the Fund's Existing Agreement, the Fund paid
Dreyfus and Tiffany an aggregate annual fee of .75 of 1% of the value of the
Fund's average daily net assets. Under the Fund's New Agreement, Dreyfus would
receive an annual fee of .75 of 1% of such net assets and would pay NCM as
described in the next paragraph.
Under the NCM Agreement, Dreyfus would pay NCM out of the fee it receives
under its New Agreement with the Fund, and only to the extent thereof, a fee at
an annual rate based on the value of the Fund's average daily net assets as
follows:
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL ASSETS AVERAGE DAILY NET ASSETS
------------ -----------------------------
<S> <C>
0 up to $500 million........................... .10 of 1%
In excess of $500 million...................... .20 of 1%
</TABLE>
Under the NCM Agreement, NCM would provide investment advisory assistance and
the day-to-day management of the Fund's portfolio, as well as investment
research and statistical information for the Fund's benefit, subject to the
supervision and approval of Dreyfus and the Fund's Board.
It is proposed that the NCM Agreement would become effective upon stockholder
approval. The approval sought by these proxy materials also will cover the NCM
Agreement if it is deemed terminated by the Transaction.
The following persons are officers and/or directors of NCM: Maceo K. Sloan,
Chairman, President and Chief Executive Officer; Justin F. Beckett, Executive
Vice President and director; Peter J. Anderson, director; Morris Goodwin, Jr.,
director; Edith H. Noel, Senior Vice President, Corporate Secretary and
Treasurer; Dennis M. McCaskill, Jr., Senior Vice President; Clifford D. Mpare,
Jr., Senior Vice President--Investments; Susan Rowe Ingram, David C. Carter,
Tammie F. Coley, Marsha G. Kee, Mary M. Ford, Stanley G. Laborde, Linda Jordan,
Victor Ross, Wendell Mackey, Lorenzo Newsome and Lawrence Verny, Vice
Presidents; Deborah C. Bronson, Vice President--Director of Operations;
Terrence S. Laster, Assistant Vice President; and Marc Reid, Assistant Vice
President--Manager of Marketing and Client Services.
NCM is a wholly-owned subsidiary of Sloan Financial Group, Inc. located at
103 West Main Street, 4th Floor, Durham, North Carolina 27705-3638. Sloan
Financial Group, Inc. is a corporation of which Maceo K. Sloan, CFA, Chairman,
President and Chief Executive Officer of NCM, owns 43%; Justin F. Beckett,
Executive Vice President and director of NCM, owns 17%; and IDS Financial
Services Inc., a wholly-owned subsidiary of American Express Company, owns 40%.
An audited balance sheet of NCM as of December 31, 1993 is included in
Dreyfus Third Century Fund's Fund Exhibit.
In reaching its decision to approve the NCM Agreement, the Fund's Board
considered, among other things, the nature and quality of the services
previously and currently being provided by Dreyfus, and the nature of the
services to be provided by Dreyfus under its New Agreement and by NCM under the
NCM Agreement. The Board also considered the overall fee structure and
concluded that the aggregate fee is fair and reasonable to the Fund's
stockholders.
The Fund's portfolio transactions are undertaken as described in Proposal 1.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
A Majority Vote is required to approve the NCM Agreement. If the NCM
Agreement is not approved, Dreyfus will provide day-to-day management of the
Fund's portfolio.
DREYFUS THIRD CENTURY FUND'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD
MEMBERS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
21
<PAGE>
PROPOSAL 12. APPROVAL OF AN AMENDMENT TO THE CHARTER OF CERTAIN FUNDS IN THE
GENERAL FAMILY
ONLY THE STOCKHOLDERS OF GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND,
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC., GENERAL MONEY MARKET
FUND, INC., GENERAL MUNICIPAL BOND FUND, INC., GENERAL MUNICIPAL MONEY MARKET
FUND, INC., GENERAL NEW YORK MUNICIPAL BOND FUND, INC. AND GENERAL NEW YORK
MUNICIPAL MONEY MARKET FUND VOTE ON THIS PROPOSAL.
The Board of each Fund listed above has approved and recommends that
stockholders approve an amendment to such Fund's charter to permit the issuance
of additional classes of shares. Each Fund's Board believes that the proposed
amendment to its Fund's charter is in the best interests of its Fund's
stockholders. A stockholder's Fund shares will not be adversely affected by the
issuance of additional classes.
Each Fund's charter currently provides for the issuance of one class of
shares with each share of the class representing an equal proportionate
interest in the Fund. Each Fund's Board recommends that its Fund's charter be
amended to permit the Board members, without further stockholder action, to
cause to be issued one or more additional classes of shares having such
different characteristics, rights or privileges as the Board members may
determine, to the extent permitted under the Act.
The purpose of the amendment would be to provide each Fund with the
flexibility necessary to take advantage of alternative methods of selling Fund
shares. Each Fund's Board believes that providing investors with alternative
methods of purchasing Fund shares could (i) enable investors to choose the
purchasing method which best suits their individual situation, thereby
encouraging current stockholders to make additional investments in the Fund and
attracting new investors and assets to the Fund thus benefiting stockholders by
increasing investment flexibility for the Fund and reducing operating expense
ratios due to economies of scale; (ii) facilitate distribution of the Fund's
shares; and (iii) maintain the competitive position of the Fund in relation to
other funds that have implemented or are seeking to implement similar
distribution arrangements.
Each Fund has received exemptive relief from the SEC to permit dual or multi-
class distribution arrangements. Under these arrangements, the Fund is
permitted to offer two or more classes of shares representing interests in the
same portfolio of investments. The classes most likely would differ principally
in the method of offering shares to investors (e.g., pursuant to a front-end
sales load or contingent deferred sales load and/or Rule 12b-1 plan or non-Rule
12b-1 shareholder services plan). Any such additional class of shares would
participate in all other respects on an equal proportionate basis with all
other classes of shares, including as to investment income, realized and
unrealized gains and losses on portfolio investments and all other operating
expenses of the Fund. All classes of shares would vote together as a single
class at meetings of stockholders, except that shares of a class which is
affected by any matter in a manner materially different from shares of other
classes would vote as a separate class and holders of shares of a class not
affected by a matter would not vote on that matter.
Maryland law requires that stockholders of Funds organized as Maryland
corporations ("Maryland Funds") be presented with a copy of the proposed
charter amendment. Massachusetts law does not so require. Accordingly, the Fund
Exhibit of Maryland Funds contains a copy of the proposed charter amendment.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
As to each Fund, approval of this proposal requires the affirmative vote of
the holders of a majority of its outstanding voting securities.
THE BOARD OF EACH FUND, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS,
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
22
<PAGE>
PROPOSAL 13. APPROVAL OF CHANGES TO CERTAIN OF THE FUNDS' FUNDAMENTAL POLICIES
AND INVESTMENT RESTRICTIONS
THIS PROPOSAL IS NOT APPLICABLE TO ALL FUNDS. YOU SHOULD REVIEW EXHIBIT C TO
DETERMINE TO WHAT EXTENT, IF ANY, THIS PROPOSAL IS APPLICABLE TO YOUR FUND.
Each Fund has adopted investment restrictions as fundamental policies which
may not be changed without stockholder approval. Each Fund's Board has adopted,
and proposes for stockholder approval, revisions which are described below to
certain of these fundamental policies. Each Fund's Board believes that these
changes will allow greater portfolio management flexibility and/or will
standardize certain provisions of the Fund's investment restrictions with those
of other similar funds in The Dreyfus Family of Funds. Specifically, the
changes to investment restrictions recommended below relate to (a) borrowing
money, (b) pledging assets, (c) investing in illiquid securities, (d) selling
securities short (for Dreyfus Growth Opportunity Fund, Inc. and Dreyfus Short-
Intermediate Government Fund only), (e) lending portfolio securities (for
Dreyfus Growth Opportunity Fund, Inc. and Dreyfus Short-Intermediate Government
Fund only), (f) entering into options transactions (for Dreyfus Growth
Opportunity Fund, Inc. only) and (g) entering into futures contracts and
options on futures contracts (Dreyfus Growth Opportunity Fund, Inc. only).
(A) BORROWING MONEY
(1) THE FOLLOWING SECTION APPLIES ONLY TO NON-MONEY MARKET FUNDS LISTED ON
EXHIBIT C. Each Fund to which this Proposal relates has adopted an Investment
Restriction that generally limits its ability to borrow money. Currently, each
Fund, except certain closed-end Funds noted on Exhibit C, may borrow money in
an amount up to 5%, 10% or 15% of the value of its total assets for temporary
or emergency purposes and not for portfolio leveraging. Each closed-end Fund
noted on Exhibit C is permitted to borrow money in an amount not to exceed 33
1/3% of the value of its total assets, but may do so only for limited purposes,
not for portfolio leveraging. Each Fund's Board recommends revising this
Investment Restriction to permit its Fund to borrow money to the extent
permitted under the Act. Currently, under the Act, total borrowings of a Fund
may not exceed 33 1/3% of the value of its total assets. In addition, the
Investment Restriction of certain of the Funds states that while the Fund's
borrowings exceed 5% of its total assets, the Fund will not make any additional
investments. This language will be deleted from the Investment Restriction.
This Proposal would increase the amount a Fund would be permitted to borrow,
within the limits described below. This borrowing, which is known as
leveraging, generally will be unsecured. Leveraging may 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 subject to interest
costs that 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 also may be required to maintain minimum
average balances in connection with such borrowing or to 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.
Each Fund, except for Dreyfus GNMA Fund, Inc., Premier GNMA Fund and Dreyfus
Strategic Governments Income, Inc., intends to borrow money only for temporary
or emergency (not leveraging) purposes, in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at the lesser of cost
or market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of a Fund's total assets, it will
not make any additional investments. Each Fund's policy regarding borrowing
expressed in this paragraph will not be changed without approval of the Fund's
Board and not until the Fund's prospectus is revised appropriately.
Dreyfus GNMA Fund, Inc. and Premier GNMA Fund intend to engage in dollar roll
transactions, which is a form of secured borrowing. A dollar roll transaction
involves a sale by the Fund of a security to a financial institution, such as a
bank or broker-dealer, concurrently with an agreement by the Fund to repurchase
a similar security from the institution at a later date at an agreed-upon
price. The 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. Proceeds of the
sale will be invested in additional instruments for the Fund, and the income
from these investments, together with any additional fee income received on the
sale, are expected to generate income for the Fund exceeding the yield on the
securities sold. Dollar 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.
23
<PAGE>
Dreyfus Strategic Governments Income, Inc. intends to borrow money: (a) for
temporary or emergency purposes or for clearance of transactions in amounts not
exceeding 15% of its total assets (not including the amount borrowed). While
such borrowings exceed 5% of the Fund's assets, the Fund will not make any
additional investments; (b) in connection with repurchases of, or tenders for,
the Fund's shares, but only if after each such borrowing the ratio which the
value of the total assets of the Fund less all liabilities and indebtedness not
represented by senior securities bears to the aggregate amount of senior
securities representing indebtedness of the Fund is at least 300%; and (c) as
otherwise described in its Prospectus.
If approved by its stockholders, the first sentence of each Fund's Investment
Restriction relating to permissible borrowing by the Fund would be revised to
read as follows:
[The Fund may not/no Series may:] Borrow money, except to the extent
permitted under the Act.
(2) THE FOLLOWING SECTION APPLIES TO DREYFUS CALIFORNIA TAX EXEMPT MONEY
MARKET FUND, DREYFUS CASH MANAGEMENT, DREYFUS CASH MANAGEMENT PLUS, INC.,
DREYFUS GOVERNMENT CASH MANAGEMENT, DREYFUS INSTITUTIONAL MONEY MARKET FUND,
DREYFUS LIQUID ASSETS, INC., DREYFUS MONEY MARKET INSTRUMENTS, INC., DREYFUS
NEW YORK TAX EXEMPT MONEY MARKET FUND, DREYFUS TAX EXEMPT CASH MANAGEMENT,
DREYFUS TREASURY CASH MANAGEMENT, DREYFUS TREASURY PRIME CASH MANAGEMENT,
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND, GENERAL GOVERNMENT SECURITIES
MONEY MARKET FUND, INC., GENERAL MONEY MARKET FUND, INC. AND GENERAL NEW YORK
MUNICIPAL MONEY MARKET FUND ONLY. Each Fund to which this Proposal relates also
has adopted an Investment Restriction that generally limits its ability to
borrow money. Currently, each Fund may borrow money only from banks for
temporary or emergency (not leveraging) purposes in an amount up to 5% or 10%
of the value of its total assets. Each Fund's Board recommends revising the
amount, not the purpose of borrowing, under this Investment Restriction to
permit the Fund to borrow money only from banks for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of a Fund's total assets, it will not make any
additional investments. These borrowings would be used ONLY for temporary or
emergency purposes and would NOT be used for portfolio leveraging.
If approved by its stockholders, the Investment Restriction of each Fund,
other than Dreyfus Cash Management Plus, Inc., relating to permissible
borrowing by the Fund would be revised to read as follows:
[The Fund may not/no Series may:] Borrow money, except from banks for
temporary or emergency (not leveraging) purposes in an amount up to 15%
of the value of the Fund's total assets (including the amount borrowed)
based on the lesser of cost or market, less liabilities (not including
the amount borrowed) at the time the borrowing is made. While borrowings
exceed 5% of the value of the Fund's total assets, the Fund will not
make any additional investments.
For Dreyfus Cash Management Plus, Inc., if approved by its stockholders, its
Investment Restriction relating to permissible borrowing by the Fund would be
revised to read as follows:
[The Fund may not:] Borrow money, except (i) from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value
of the Fund's total assets (including the amount borrowed) based on the
lesser of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made and (ii) in connection with
the entry into reverse repurchase agreements to the extent described in
the Fund's Prospectus. While borrowings described in clause (i) exceed
5% of the value of the Fund's total assets, the Fund will not make any
additional investments.
(B) PLEDGING ASSETS
Each Fund listed on Exhibit C to which this Proposal relates also has adopted
an Investment Restriction that, among other things, limits the percentage of
the Fund's assets which may be pledged, mortgaged or hypothecated to secure the
borrowings referred to above. Each Fund's Board recommends this Investment
Restriction be amended to permit the Fund to pledge its assets to the extent
necessary to secure permitted borrowings. Each Fund's Board further recommends
making this Investment Restriction, as proposed to be changed herein, a non-
fundamental policy. Fundamental policies cannot be changed without approval by
Majority Vote, while non-fundamental policies may be changed by a vote of a
majority of a Fund's Board at any time.
24
<PAGE>
If approved by its stockholders, each Fund's Investment Restriction relating
to the pledging of assets by the Fund will be a non-fundamental policy and its
first sentence or clause, as the case may be, would be revised to read as
follows:
[The Fund may not/no Series may:] Pledge, mortgage, hypothecate or
otherwise encumber its assets, except to the extent necessary to secure
permitted borrowings.
(C) RESTRICTED AND ILLIQUID SECURITIES
Each Fund listed on Exhibit C to which this Proposal relates has adopted an
Investment Restriction that limits, among other things, the amount of its
assets that the Fund may invest in securities which are illiquid. Currently,
certain Funds are not permitted to invest in illiquid securities at all, while
other Funds are permitted to invest in illiquid securities in amounts up to 5%,
10% or 15% of their net assets. In some cases, this restriction also provides
that each Fund will not enter into time deposits maturing in more than seven
days and that time deposits maturing from two business through seven calendar
days will not exceed 5% or 10%, as the case may be, of the Fund's total assets.
The SEC has amended its policies to increase from 10% to 15% the amount of
net assets of an open-end management investment company, other than a money
market fund, which may be invested in illiquid securities. To be able to take
advantage of the additional flexibility permitted by the SEC with respect to
investing in illiquid securities, the Board of each Fund that is currently
permitted to invest less than 15% (10% in the case of money market funds) of
its net assets in illiquid securities recommends amending this Investment
Restriction to permit the Fund to invest up to 15% (10% in the case of money
market funds) of its net assets in illiquid securities. Each Fund's Board also
recommends deleting the separate reference to investments in time deposits.
To conform the Investment Restriction with similar Investment Restrictions
applicable to other funds in The Dreyfus Family of Funds, additional changes
are proposed. In particular, examples of specific types of illiquid securities
would be deleted. Each Fund intends to continue to treat as illiquid all types
of securities it previously treated as illiquid, except for time deposits
maturing between two and seven days, until such time as a liquid secondary
market exists for them.
Each Fund's Board also recommends making this Investment Restriction a non-
fundamental investment policy. Fundamental policies cannot be changed without
approval by Majority Vote, while non-fundamental policies may be changed by a
vote of a majority of a Fund's Board members at any time. Each Fund's Board
believes that, by making the Fund's policy on illiquid securities non-
fundamental, the Fund will be able to respond more rapidly to similar
regulatory developments.
The Investment Restrictions of certain Funds also provide that the Fund may
not purchase securities subject to restrictions on disposition under the
Securities Act of 1933 (so called "restricted securities"). In general,
illiquid securities have included restricted securities. However, the
securities markets are evolving and new types of instruments have developed
which make the Fund's current restriction overbroad and unnecessarily
restrictive. The markets for certain types of securities (so-called, "Rule 144A
securities") are almost exclusively institutional. Such securities often are
either exempt from registration or sold in transactions not requiring
registration. Institutional investors, therefore, will often depend on an
efficient institutional market in which the unregistered security can be
readily resold. The fact that there may be legal or contractual restrictions on
resale to the general public, therefore, will not be dispositive of the
liquidity of such investments. To be able to take advantage of the increasingly
liquid institutional trading markets, each Fund's Board recommends deleting the
restriction on purchasing restricted securities contained in this Investment
Restriction, as applicable, so that restricted securities that are nonetheless
liquid may be purchased, while purchases of restricted securities that are
illiquid will continue to be subject to the limitation described above.
If approved by its stockholders, each Fund's Investment Restriction relating
to the purchase of restricted or illiquid securities by the Fund will be a non-
fundamental policy and would be revised to read as follows:
[The Fund may not/no Series may:] 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% [10% for money market funds] of the value of the Fund's net assets
would be so invested.
25
<PAGE>
(D) SELLING SECURITIES SHORT
THE FOLLOWING SECTION APPLIES TO DREYFUS GROWTH OPPORTUNITY FUND, INC. AND
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND ONLY. Each Fund has adopted an
Investment Restriction that prohibits, among other things, the Fund from
selling securities short. Each Fund's Board recommends that this Investment
Restriction be revised so that its Fund would be permitted to sell securities
short.
Short sales are transactions in which the Fund sells a security it does not
own in anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to make delivery
to the buyer. The Fund then is obligated to replace the security borrowed by
purchasing it 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. Until the security is replaced, the Fund is required to pay to the lender
amounts equal to any dividends or interest which accrue during the period of
the loan. To borrow the security, the Fund also may be required to pay a
premium, which would increase the cost of the security sold. The proceeds of
the short sale will be retained by the broker, to the extent necessary to meet
margin requirements, until the short position is closed out.
Until a Fund closes its short position or replaces the borrowed security, the
Fund will: (a) maintain a segregated account, containing cash or U.S.
Government securities, at such a level that (i) the amount deposited in the
account plus the amount deposited with the broker as collateral will equal or
exceed the current value of the security sold short and (ii) the amount
deposited in the segregated account plus the amount deposited with the broker
as collateral will not be less than the market value of the security at the
time it was sold short; or (b) otherwise cover its short position.
A Fund will incur a loss as a result of the short sale 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. A Fund will realize a gain if the security
declines in price between those dates. This result is the opposite of what one
would expect from a cash purchase of a long position in a security. The amount
of any gain will be decreased, and the amount of any loss increased, by the
amount of any premium or amounts in lieu of dividends or interest the Fund may
be required to pay in connection with a short sale.
Upon approval of this Proposal, it is contemplated that each Fund also may
purchase call options to provide a hedge against an increase in the price of a
security sold short by the Fund. When the Fund purchases a call option it has
to pay a premium to the person writing the option and a commission to the
broker selling the option. If the option is exercised by the Fund, the premium
and the commission paid may be more than the amount of the brokerage commission
charged if the security were to be purchased directly.
Each Fund anticipates that the frequency of short sales will vary
substantially under different market conditions, and it does not intend that
any specified portion of its assets, as a matter of practice, will be invested
in short sales.
In addition to the short sales discussed above, each Fund will have the
ability to make short sales "against the box," a transaction in which the Fund
enters into a short sale of a security which the Fund owns. The proceeds of the
short sale will be held by a broker until the settlement date at which time the
Fund delivers the security to close the short position. The Fund receives the
net proceeds from the short sale. At no time will either Fund have more than
15% of the value of its net assets in deposits on short sales against the box.
It currently is anticipated that the Fund will make short sales against the box
for purposes of protecting the value of the Fund's net assets.
If approved by stockholders, the prohibition against selling securities short
will be deleted from the appropriate Investment Restriction of each Fund.
(E) SECURITIES LENDING
THE FOLLOWING SECTION APPLIES TO DREYFUS GROWTH OPPORTUNITY FUND, INC. AND
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND ONLY. Each Fund has adopted an
Investment Restriction that currently prohibits the Fund from making loans
except through the purchase of certain debt obligations and, with respect to
Dreyfus Short-Intermediate Government Fund, the entry into repurchase
agreements. Each Fund's Board recommends that this Investment Restriction be
amended to permit its Fund to lend its portfolio securities in an amount not to
exceed 33 1/3% of the value of its total assets. This change would permit the
Fund to lend securities from its portfolio to brokers, dealers and other
financial institutions wishing to borrow securities from the Fund. The Fund can
26
<PAGE>
increase its income through the investment of such collateral. The Fund might
experience risk of loss if an institution with which the Fund engaged in a
portfolio loan transaction breached its agreement with the Fund. With respect
to Dreyfus Short-Intermediate Government Fund, the use of this investment
technique could give rise to taxable income for purposes of state and local
income taxes.
The SEC currently requires that the following conditions be met whenever
portfolio securities are loaned: (1) the Fund must receive at least 100% cash
collateral from the borrower; (2) the borrower must increase such collateral
whenever the market value of the securities rises above the level of such
collateral; (3) the Fund must be able to terminate the loan at any time; (4)
the Fund must receive reasonable interest on the loan, as well as any interest
or other distributions payable on the loaned securities, and any increase in
market value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan.
If approved by its stockholders, each Fund's Investment Restriction relating
to lending portfolio securities by the Fund would be revised to read as
follows:
[The Fund may not:] Make loans to others, except through the purchase of
debt obligations and the entry into repurchase agreements referred to in
the Fund's Prospectus. However, the Fund may lend its portfolio
securities in an amount not to exceed 33 1/3% of the value of its total
assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Fund's Board.
(F) OPTIONS TRANSACTIONS
THE FOLLOWING SECTION APPLIES TO DREYFUS GROWTH OPPORTUNITY FUND, INC. ONLY.
The Fund has adopted an Investment Restriction that, among other things,
prohibits the Fund from engaging in the purchase and sale of put, call,
straddle or spread options or in writing such options, except that the Fund may
write and sell covered call option contracts on securities owned by the Fund
not exceeding 20% of the market value of its net assets at the time such option
contracts are written. The Fund also may purchase call options to enter into
closing purchase transactions. In connection with the writing of covered call
options, the Fund may pledge assets to an extent not greater than 20% of the
market value of its total net assets at the time such options are written.
The Fund's Board recommends that the Investment Restriction be changed to
permit the Fund to purchase and sell options to the extent described from time
to time in the Fund's Prospectus or Statement of Additional Information. These
investments are commonly referred to as "derivatives."
In addition to the types of transactions discussed above, the Fund currently
intends to invest up to 5% of its assets, represented by the premium paid, in
the purchase of call and put options in respect of specific securities (or
groups or "baskets" of specific securities) in which the Fund may invest. The
Fund also may write covered put option contracts to the extent of 20% of the
value of its net assets at the time such option contracts are written. A call
option gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security at the exercise price at any time
during the option period. Conversely, a put option gives the purchaser of the
option the right to sell, and obligates the writer to buy, the underlying
security at the exercise price at any time during the option period. A covered
put option sold by the Fund exposes the Fund during the term of the option to a
decline in price of the underlying security or securities. A put option sold by
the Fund is covered when, among other things, cash or liquid securities are
placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken.
The Fund also currently intends to purchase and sell call and put options on
foreign currency for the purpose of hedging against changes in future currency
exchange rates. Call options convey the right to buy the underlying currency at
a price which is expected to be lower than the spot price of the currency at
the time the option expires. Put options convey the right to sell the
underlying currency at a price which is anticipated to be higher than the spot
price of the currency at the time the option expires.
The Fund also currently intends to purchase cash-settled options on interest
rate swaps, interest rate swaps denominated in foreign currency and equity
index swaps. Interest rate swaps involve the exchange by the Fund with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments for fixed-rate payments) denominated in
U.S. dollars or foreign currency. 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
27
<PAGE>
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.
The Fund also currently intends to purchase and sell call and put options on
stock indexes listed on U.S. securities exchanges or traded in the over-the-
counter market. A stock index fluctuates with changes in the market values of
the stocks included in the index. Because the value of an index option depends
upon movements in the level of the index rather than the price of a particular
stock, whether the Fund will realize a gain or loss from the purchase or
writing of options on an index depends upon movements in the level of stock
prices in the stock market generally or, in the case of certain indexes, in an
industry or market segment, rather than movements in the price of a particular
stock.
Successful use by the Fund of options will be subject to Dreyfus' ability to
predict correctly movements in the direction of individual stocks, the stock
market generally, foreign currencies or interest rates. To the extent Dreyfus'
predictions are incorrect, the Fund may incur losses which could adversely
affect the value of a stockholder's investment.
The Fund's Board also recommends making this Investment Restriction, as
proposed to be changed herein, a non-fundamental policy. Fundamental policies
cannot be changed without approval by Majority Vote, while non-fundamental
policies may be changed by a vote of a majority of the Fund's Board members at
any time. The Fund's Board believes that these changes will provide the Fund
greater flexibility to respond to regulatory and other developments.
If approved by its stockholders, the Fund's Investment Restriction relating
to permissible options transactions by the Fund will be a non-fundamental
policy and would be revised to read as follows:
[The Fund may not:] Purchase, sell or write puts, calls, or combinations
thereof, except as described in the Fund's Prospectus and Statement of
Additional Information.
(G) FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
THE FOLLOWING SECTION APPLIES TO DREYFUS GROWTH OPPORTUNITY FUND, INC. ONLY.
The Fund has adopted an Investment Restriction that prohibits the Fund from
purchasing, holding or dealing in commodities or commodity contracts or in real
estate, except the Fund may invest in securities of companies engaged in real
estate activities or investments. The Fund's Board recommends that this
Investment Restriction be revised to permit the Fund to engage in futures
transactions, including those based on an index, and options thereon to the
extent permitted by applicable regulations. These investments are commonly
referred to as "derivatives."
The Fund currently anticipates entering into stock index futures contracts,
interest rate futures contracts and currency futures contracts, and options
with respect thereto, in U.S. domestic markets or on exchanges located outside
the United States. See "--(f) Options Transactions" above. These transactions
will be entered into as a substitute for comparable market positions in the
underlying securities or for hedging purposes. Although the Fund would not be a
commodity pool, it would be subject to rules of the Commodity Futures Trading
Commission limiting the extent to which the Fund could engage in these
transactions.
Engaging in these transactions involves risk of loss to the Fund's portfolio
which could adversely affect the value of a stockholder's investment. Although
the Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of fluctuation permitted
in futures contract prices during a single trading day. Once the daily limit
has been reached in a particular contract, no trades may be made that day at a
price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting the Fund to
substantial losses. In addition, engaging in futures transactions in foreign
markets may involve greater risks than trading on domestic exchanges.
Successful use of futures by the Fund also is subject to Dreyfus' ability to
predict correctly movements in the direction of the market, interest rates or
foreign currencies and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract. For
example, if the Fund has hedged against the possibility of a decline in the
market adversely affecting the value of securities held in its portfolio and
prices increase instead, the Fund will lose part or all of the benefit of the
28
<PAGE>
increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations, if
the Fund has insufficient cash, it may have to sell securities to meet daily
variation margin requirements. Such sales of securities may, but will not
necessarily, be at increased prices which reflect the rising market. The Fund
may have to sell securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the SEC, the Fund may
be required to segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount generally equal to
the value of the underlying commodity. The segregation of such assets will have
the effect of limiting the Fund's ability otherwise to invest those assets.
If approved by its stockholders, the Fund's Investment Restriction relating
to permissible futures transactions by the Fund would be revised to read as
follows:
[The Fund may not:] Invest in commodities, except that the Fund may
purchase and sell options, forward contracts, futures contracts,
including those relating to indexes, and options on futures contracts or
indexes.
REQUIRED VOTE AND BOARD MEMBERS' RECOMMENDATION
As to each Fund, approval of this Proposal requires a Majority Vote.
THE BOARD OF EACH FUND, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS,
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE FOREGOING PROPOSAL.
ADDITIONAL INFORMATION
The Fund Exhibit sets forth certain information concerning entities that are
known by the respective Fund to be the holders of record of 5% or more of its
shares outstanding as of the date indicated on the Fund Exhibit. To each Fund's
knowledge, no stockholder beneficially owned 5% or more of its shares
outstanding on such date, except to the extent set forth on its Fund Exhibit.
OTHER MATTERS
If a proxy is properly executed and returned accompanied by instructions to
withhold authority to vote, represents a broker "non-vote" (that is, a proxy
from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote shares
of a Fund on a particular matter with respect to which the broker or nominee
does not have discretionary power) or marked with an abstention (collectively,
"abstentions"), the Fund's shares represented thereby will be considered to be
present at the meeting for purposes of determining the existence of a quorum
for the transaction of business. Abstentions, however, will have the effect of
a "no" vote for the purpose of obtaining requisite approval for Proposals 1 and
4 through 13.
Stockholders of Dreyfus Variable Investment Fund or Dreyfus Socially
Responsible Fund should review the relevant Fund's Fund Exhibit for a
description of special voting instruction rights with respect to such Funds.
Each Fund's Board is not aware of any other matters which may come before the
meeting. However, should any such matters with respect to one or more Funds
properly come before the meeting, it is the intention of the persons named in
the accompanying form of proxy to vote the proxy in accordance with their
judgment on such matters.
Dreyfus and Mellon will bear the cost of soliciting proxies. In addition to
the use of the mails, proxies may be solicited personally, by telephone or by
telegraph, and they may pay persons holding shares of a Fund in their names or
those of their nominees for their expenses in sending soliciting materials to
their principals. In addition, Dreyfus and Mellon have retained, at their
expense, D.F. King & Co., Inc. to solicit proxies on behalf of each Fund's
Board. Aggregate solicitation fees are estimated to be $300,000.
Unless otherwise required under the Act, ordinarily it will not be necessary
for a Fund to hold annual meetings of stockholders. As a result, a Fund's
stockholders will not consider each year the election of Board members or the
appointment of auditors. However, a Fund's Board will call a meeting of its
stockholders for the purpose of electing
29
<PAGE>
Board members if, at any time, less than a majority of the Board members then
holding office have been elected by stockholders. Under the Act, stockholders
of record of not less than two-thirds of a Fund's outstanding shares may remove
Board members of such Fund through a declaration in writing or by vote cast in
person or by proxy at a meeting called for that purpose. Under each Fund's By-
Laws, the Board members are required to call a meeting of stockholders for the
purpose of voting upon the question of removal of any such Board members when
requested in writing to do so by the stockholders of record of not less than
10% of such Fund's outstanding shares. Stockholders wishing to submit proposals
for inclusion in a Fund's proxy statement for a subsequent stockholder meeting
should send their written submissions to the principal executive offices of the
Fund at 200 Park Avenue, New York, New York 10166, Attention: General Counsel.
NOTICE TO BANKS, BROKER/DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the appropriate Fund, in care of D.F. King & Co., Inc.,
Attention: [NAME OF FUND], 77 Water Street, New York, New York 10005, or call
(212) 425-1685, whether other persons are the beneficial owners of the shares
for which proxies are being solicited and, if so, the number of copies of the
proxy statement and other soliciting material you wish to receive in order to
supply copies to the beneficial owners of shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
Dated: June 3, 1994
30
<PAGE>
EXHIBIT A
Part I
Dreyfus serves as investment adviser to the investment companies listed
below, except Comstock Partners Strategy Fund, Inc. for which Dreyfus serves as
sub-investment adviser. The approximate net assets of each investment company
as of May 4, 1994 and the investment advisory fee payable by it to Dreyfus
(expressed as a percentage of average daily net assets+) also are listed below.
As described above, the investment advisory fee structure for each of these
Funds, except Dreyfus Socially Responsible Fund and Dreyfus Third Century Fund,
will remain the same.
<TABLE>
<CAPTION>
INVESTMENT ADVISORY
FEE AS A PERCENTAGE APPROXIMATE
OF AVERAGE DAILY NET ASSETS
NAME OF FUND NET ASSETS+ (IN MILLIONS)+
- - - - - - - - ------------ ------------------- --------------
<S> <C> <C>
Dreyfus A Bonds Plus, Inc................... .65 $578
Dreyfus Appreciation Fund, Inc.............. * $221
Dreyfus Asset Allocation Fund, Inc.......... .75 $ 51
Dreyfus Balanced Fund, Inc. ................ .60 $ 72
Dreyfus BASIC Money Market Fund, Inc........ .50 $ 1.5 billion
Dreyfus BASIC Municipal Fund................ ** $938
Dreyfus BASIC U.S. Government Money Market
Fund....................................... .50 $237
Dreyfus California Intermediate Municipal
Bond Fund.................................. .60 $262
Dreyfus California Municipal Income, Inc. .. .70++ $ 41
Dreyfus California Tax Exempt Bond Fund,
Inc........................................ .60 $ 1.6 billion
Dreyfus California Tax Exempt Money Market
Fund....................................... .50 $315
Dreyfus Capital Growth Fund (A Premier
Fund)...................................... .75 $592
Dreyfus Capital Value Fund (A Premier Fund). *** $517
Dreyfus Cash Management .................... .20 $ 2.6 billion
Dreyfus Cash Management Plus, Inc........... .20 $ 2.1 billion
Dreyfus Connecticut Intermediate Municipal
Bond Fund.................................. .60 $138
Dreyfus Connecticut Municipal Money Market
Fund, Inc.................................. .50 $250
Dreyfus Florida Intermediate Municipal Bond
Fund....................................... .60 $467
Dreyfus Florida Municipal Money Market Fund. .50 $ 91
Dreyfus Focus Funds, Inc. .................. .75 $ 20
The Dreyfus Fund Incorporated............... **** $ 2.7 billion
Dreyfus Global Bond Fund, Inc............... .70 $ 11
Dreyfus Global Growth, L.P. (A Strategic
Fund)...................................... .75 $154
Dreyfus GNMA Fund, Inc...................... .60 $ 1.6 billion
Dreyfus Government Cash Management.......... .20 $ 3.5 billion
Dreyfus Growth and Income Fund, Inc......... .50 $ 1.6 billion
Dreyfus Growth Opportunity Fund, Inc........ .75 $412
Dreyfus Institutional Money Market Fund..... .50 $466
Dreyfus Institutional Short Term Treasury
Fund....................................... .20 $ 73
Dreyfus Insured Municipal Bond Fund, Inc.... .60 $251
Dreyfus Intermediate Municipal Bond Fund,
Inc........................................ .60+++ $ 1.7 billion
Dreyfus International Equity Fund, Inc...... .75 $174
Dreyfus Investors GNMA Fund................. .60 $ 47
Dreyfus Liquid Assets, Inc. ................ ***** $ 5.0 billion
Dreyfus Massachusetts Intermediate Municipal
Bond Fund.................................. .60 $ 86
Dreyfus Massachusetts Municipal Money Market
Fund....................................... .60 $ 95
Dreyfus Massachusetts Tax Exempt Bond Fund.. .60 $167
Dreyfus Michigan Municipal Money Market
Fund, Inc.................................. .50 $ 63
Dreyfus Money Market Instruments, Inc....... .50 $682
Dreyfus Municipal Bond Fund, Inc............ .60+++ $ 4.0 billion
Dreyfus Municipal Cash Management Plus...... .20 $371
Dreyfus Municipal Income, Inc. ............. .70++ $193
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT ADVISORY
FEE AS A PERCENTAGE APPROXIMATE
OF AVERAGE DAILY NET ASSETS
NAME OF FUND NET ASSETS+ (IN MILLIONS)+
- - - - - - - - ------------ ------------------- --------------
<S> <C> <C>
Dreyfus Municipal Money Market Fund, Inc.... .50 $ 1.1 billion
Dreyfus New Jersey Intermediate Municipal
Bond Fund.................................. .60 $236
Dreyfus New Jersey Municipal Bond Fund,
Inc........................................ .60 $637
Dreyfus New Jersey Municipal Money Market
Fund, Inc.................................. .50 $787
Dreyfus New Leaders Fund, Inc............... .75 $356
Dreyfus New York Insured Tax Exempt Bond
Fund....................................... .60 $173
Dreyfus New York Municipal Cash Management.. .20 $126
Dreyfus New York Municipal Income, Inc...... .70++ $ 37
Dreyfus New York Tax Exempt Bond Fund, Inc.. .60 $ 1.9 billion
Dreyfus New York Tax Exempt Intermediate
Bond Fund.................................. .60 $390
Dreyfus New York Tax Exempt Money Market
Fund....................................... .50 $348
Dreyfus Ohio Municipal Money Market Fund,
Inc........................................ .50 $ 71
Dreyfus 100% U.S. Treasury Intermediate Term
Fund....................................... .60 $223
Dreyfus 100% U.S. Treasury Long Term Fund... .60 $161
Dreyfus 100% U.S. Treasury Money Market
Fund....................................... .50 $ 1.7 billion
Dreyfus 100% U.S. Treasury Short Term Fund.. .50 $177
Dreyfus Pennsylvania Intermediate Municipal
Bond Fund.................................. .60 $ 16
Dreyfus Pennsylvania Municipal Money Market
Fund....................................... .50 $138
Dreyfus Short-Intermediate Government Fund.. .50 $537
Dreyfus Short-Intermediate Municipal Bond
Fund....................................... .50 $572
Dreyfus Short-Term Income Fund, Inc......... .50 $290
The Dreyfus Socially Responsible Growth
Fund, Inc.................................. ****** $ 4
Dreyfus Strategic Governments Income, Inc... .70++ $155
Dreyfus Strategic Growth, L.P............... .75 $ 58
Dreyfus Strategic Income.................... .60 $351
Dreyfus Strategic Investing................. .75 $305
Dreyfus Strategic Municipal Bond Fund, Inc.. .50++ $421
Dreyfus Strategic Municipals, Inc........... .75++ $544
Dreyfus Tax Exempt Cash Management.......... .20 $ 1.7 billion
The Dreyfus Third Century Fund, Inc......... ******* $400
Dreyfus Treasury Cash Management............ .20 $ 2.0 billion
Dreyfus Treasury Prime Cash Management...... .20 $ 4.0 billion
Dreyfus Variable Investment Fund............ ******** $ 96
Dreyfus Worldwide Dollar Money Market Fund,
Inc........................................ .50 $ 2.9 billion
General California Municipal Bond Fund,
Inc........................................ .60 $352
General California Municipal Money Market
Fund....................................... .50 $738
General Government Securities Money Market
Fund, Inc.................................. .50 $515
General Money Market Fund, Inc.............. .50 $560
General Municipal Bond Fund, Inc............ .55 $ 1.0 billion
General Municipal Money Market Fund, Inc.... .50 $351
General New York Municipal Bond Fund, Inc... .60 $335
General New York Municipal Money Market
Fund....................................... .50 $668
Premier California Municipal Bond Fund...... .55 $236
Premier Global Investing.................... .50 $147
Premier GNMA Fund........................... .55 $212
Premier Growth Fund, Inc.................... .75 $ 14
Premier Insured Municipal Bond Fund......... .55 $ 3
Premier Municipal Bond Fund................. .55 $641
Premier New York Municipal Bond Fund........ .55 $217
Premier State Municipal Bond Fund........... .55 $ 2.5 billion
Comstock Partners Strategy Fund, Inc........ ********* $557
</TABLE>
A-2
<PAGE>
- - - - - - - - -------
+ Except where indicated.
++ As a percentage of average weekly net assets.
+++ Pursuant to a settlement of litigation, payments will be made by Dreyfus
to the Fund each year until October 14, 1998 based upon the average
daily net assets of the Fund, as follows: $90,000, if such assets are
between $1 billion and $2 billion; $200,000, if such assets are between
$2 billion and $3.5 billion; $350,000, if such assets are between $3.5
billion and $5 billion; $550,000, if such assets are between $5 billion
and $7.5 billion; $775,000, if such assets are between $7.5 billion and
$10 billion; and $1,000,000, if such assets exceed $10 billion.
* .44 of 1% of the first $25 million of average daily net assets, .37 of
1% of the next $50 million of such assets, .33 of 1% of the next $125
million of such assets, .29 of 1% of the next $100 million of such
assets and .275 of 1% of such assets over $300 million.
** .50 of 1% of average daily net assets of the Money Market Series; .60 of
1% of average daily net assets of the Bond Series; and .60 of 1% of
average daily net assets of the Intermediate Bond Series.
*** .60 of 1% of the first $25 million of average daily net assets, .50 of
1% of the next $50 million of such assets, .45 of 1% of the next $125
million of such assets, .40 of 1% of the next $100 million of such
assets and .375 of 1% of such assets over $300 million.
**** .65 of 1% of the first $1.5 billion of average daily net assets, .625 of
1% of the next $500 million of such assets, .60 of 1% of the next $500
million of such assets and .55 of 1% of such assets over $2.5 billion.
***** .50 of 1% of the first $1.5 billion of average daily net assets, .48 of
1% of the next $500 million of such assets, .47 of 1% of the next $500
million of such assets and .45 of 1% of such assets over $2.5 billion.
****** .65 of 1% of the first $200 million of average daily net assets, .55 of
1% of the next $100 million of such assets and .375 of 1% of such assets
over $300 million.
******* .65 of 1% of the first $200 million of average daily net assets, .40 of
1% of the next $100 million of such assets and .375 of 1% of such
assets over $300 million.
******** .50 of 1% of average daily net assets of the Money Market Portfolio;
.65 of 1% of average daily net assets of the Quality Bond Portfolio;
.45 of 1% of average daily net assets of the Zero Coupon 2000
Portfolio; .75 of 1% of average daily net assets of the Small Cap
Portfolio; .375 of 1% of average daily net assets of the Managed
Assets Portfolio; .75 of 1% of average daily net assets of the Growth
and Income Portfolio; and .75 of 1% of average daily net assets of the
International Equity Portfolio.
********* The Fund's investment adviser, not the Fund, pays Dreyfus a monthly
sub-investment advisory fee at the annual rate of .15 of 1% of the
Fund's average daily net assets.
A-3
<PAGE>
Part II
Dreyfus serves as administrator and DSC serves as distributor where indicated
for the investment companies listed below, the approximate net assets of which
as of May 4, 1994 and the fees payable by each (expressed as a percentage of
the average daily net assets) also are listed below. The administration fee
structures for each of these Funds will remain the same.
<TABLE>
<CAPTION>
FEE AS A % APPROXIMATE
OF AVG. DAILY NET ASSETS
NAME OF FUND NET ASSETS (IN MILLIONS)+
- - - - - - - - ------------ ------------- --------------
<S> <C> <C>
Dreyfus Edison Electric Index Fund, Inc........... .15 $ 89
Dreyfus Stock Index Fund.......................... .15 $ 70
Dreyfus-Wilshire Target Funds, Inc................ .20 $ 52
First Prairie Cash Management++................... +++ $268
First Prairie Diversified Asset Fund++............ .30 $ 50
First Prairie Money Market Fund++................. +++ $257
First Prairie Municipal Money Market Fund++....... +++ $197
First Prairie Municipal Bond Fund++............... .20 $ 36
First Prairie U.S. Government Income Fund++....... +++ $ 5
First Prairie U.S. Treasury Securities Cash Man-
agement++........................................ +++ $428
Pacific American Fund............................. .20 $ 1.3 billion
Peoples Index Fund, Inc........................... .20 $285
Peoples S&P MidCap Index Fund, Inc................ .30 $ 75
</TABLE>
- - - - - - - - -------
+ Except where indicated.
++ Members of the First Prairie Family.
+++ Fee payable by the Fund's investment adviser or manager, not the Fund. In
all other cases, fees are payable by the relevant Fund.
A-4
<PAGE>
THESE FINANCIAL STATEMENTS ARE NOT STATEMENTS OF THE FUND IN WHICH YOU HAVE
AN INVESTMENT, BUT ARE STATEMENTS OF THE DREYFUS CORPORATION WHICH ARE REQUIRED
BY THE SEC TO BE INCLUDED HEREIN.
EXHIBIT B
THE DREYFUS CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET
(000'S OMITTED)
December 31, 1993
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and cash equivalents--primarily shares of sponsored money mar-
ket investment companies........................................... $ 301,277
Receivables:
For management, investment advisory and administrative fees....... 23,114
From brokers and dealers.......................................... 12,745
Interest, dividends and other receivables......................... 14,255
----------
Total Receivables............................................... 50,114
----------
Investments in marketable securities--Notes 1 and 2:
Marketable equity securities--including $9,026 pledged as collat-
eral in connection with securities transactions.................. 183,968
Other marketable securities--principally at cost, which approxi-
mates market..................................................... 147,763
----------
Total Investments in marketable securities...................... 331,731
----------
Other investments (fair value--$175,862)--Notes 1 and 2............. 133,923
Fixed assets--at cost, less accumulated depreciation and amortiza-
tion--Note 3....................................................... 62,643
Other assets, including prepaid and deferred charges of $20,026--
Note 4............................................................. 34,900
----------
TOTAL ASSETS.................................................... $ 914,588
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Short positions in marketable equity securities--Notes 1 and 2.... $ 7,915
Due to brokers and dealers........................................ 386
Banking customer deposits (fair value--$26,525)--Note 1........... 26,519
Taxes payable..................................................... 4,318
Accrued compensation and benefits................................. 17,756
Sundry liabilities and accrued expenses........................... 33,105
----------
TOTAL LIABILITIES............................................... 89,999
----------
STOCKHOLDERS' EQUITY--NOTES 2, 5 AND 6:
Common stock--par value $.10 per share (50,000 shares authorized),
shares issued--44,973............................................ 4,497
Additional paid-in capital........................................ 279,576
Retained earnings................................................. 731,188
----------
1,015,261
Less:
Treasury stock--at cost, 8,417 shares............................. 190,524
Notes receivable for common stock issued.......................... 148
----------
TOTAL STOCKHOLDERS' EQUITY...................................... 824,589
----------
COMMITMENTS, CONTINGENCIES AND OTHER MATTERS--NOTES 6, 7, 8, 9 AND
10
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...................... $ 914,588
==========
</TABLE>
See notes to consolidated balance sheet.
B-1
<PAGE>
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF BUSINESS:
The Dreyfus Corporation ("Corporation") and Subsidiary Companies comprise a
financial service organization whose primary business consists of providing
investment management services as the investment adviser, manager and
distributor for sponsored investment companies and as an investment adviser to
other accounts. In addition, the Corporation is the sub-investment adviser
and/or administrator of several investment companies sponsored by others.
PRINCIPLES OF CONSOLIDATION:
The consolidated balance sheet includes the accounts of the Corporation and
its subsidiaries. All significant intercompany accounts and transactions were
eliminated in consolidation.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following methods and assumptions were used by the Corporation in
estimating its fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance
sheet for cash and cash equivalents approximates fair value.
Marketable securities: The fair value of the Corporation's marketable
securities portfolios are based on quoted market prices or dealer quotes.
Other investments: The fair value of certain limited partnerships engaged
in securities trading, which are accounted for at cost, is based on quoted
market prices of the respective partnerships' underlying securities
portfolios.
Financial instruments with off-balance sheet risk: The fair value of the
Corporation's financial instruments with off-balance sheet risk is based on
quoted market prices or dealer quotes.
Banking customer deposits: The fair value of fixed-maturity certificates
of deposit are estimated using a discounted cash flow calculation that
applies interest rates currently offered for deposits of similar remaining
maturities to a schedule of aggregated expected monthly maturities on time
deposits. The fair value for demand deposits, savings accounts and money
market bank accounts are equal to the amounts payable on demand at the
reporting date.
NOTE 2--INVESTMENTS:
MARKETABLE EQUITY SECURITIES:
The Corporation, excluding Dreyfus Service Corporation ("Service
Corporation"), carries its marketable equity securities portfolio at cost (long
positions) or proceeds (short positions) if the portfolio has an aggregate net
unrealized gain, or at market if the portfolio has an aggregate net unrealized
loss. It is the Corporation's policy to charge aggregate net unrealized losses
on the marketable equity securities portfolio to Stockholders' Equity;
aggregate net unrealized gains on the marketable equity securities portfolio
are not recognized, except to the extent of aggregate net unrealized losses
previously recognized. The Corporation engages in short selling which obligates
the Corporation to replace the security borrowed by purchasing the identical
security at its then current market value. Service Corporation, a wholly-owned
broker-dealer subsidiary of the Corporation, carries its securities at market
value, in accordance with the practice in the brokerage industry.
At December 31, 1993, the Corporation's marketable equity securities
portfolio had an aggregate net unrealized gain amounting to $6 million. Gross
unrealized gains and losses on such securities amounted to $10.8 million and
$4.8 million, respectively. The Corporation's aggregate long positions in the
marketable equity securities portfolio were carried at cost of $184 million
(fair value--$190.1 million) and the aggregate short positions in the
marketable equity securities portfolio were carried at proceeds of $7.9 million
(fair value--$8 million).
B-2
<PAGE>
OTHER MARKETABLE SECURITIES:
The Corporation (excluding Service Corporation) carries its other marketable
securities, consisting primarily of Municipal and U.S. Government obligations,
at cost. In addition, the Corporation carries its investments in options to
purchase certain securities, designated as trading securities, at market; net
unrealized gains and losses thereon are included in operations.
OTHER INVESTMENTS:
Other investments consist of investments in non-readily marketable limited
partnerships and non-readily marketable securities.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Corporation is a party to financial instruments with off-balance sheet
risk. These financial instruments include futures contracts, forward contracts
and options written. The Corporation enters into these transactions as part of
its trading activities, as well as to reduce its own exposure to market risk in
connection with its positions in certain sponsored index funds.
Off-balance sheet financial instruments and commodity futures contracts
involve varying degrees of market and credit risk that exceed the amounts
recognized on the balance sheet. The estimated fair values for such financial
instruments and commodity futures contracts with contract or notional principal
amounts that exceed the amount of credit risk at December 31, 1993 are
summarized below (000's omitted):
<TABLE>
<CAPTION>
CONTRACT OR NOTIONAL FAIR VALUE OF
PRINCIPAL AMOUNT CONTRACTS
-------------------- -------------
<S> <C> <C>
Long Positions in aluminum and oil commodity
futures, Feb. and Mar. 1994................ $ 6,603 $ 13
Short Positions in Japanese yen forward con-
tracts, Feb. 1994.......................... 10,011 219
Short Positions in S&P Index futures con-
tracts, Mar. 1994.......................... 5,835 (2)
S&P Index, option contracts written......... 178 (241)
</TABLE>
Futures and forward contracts represent future commitments to purchase or
sell a specified instrument at a specified price and date. Futures contracts
are standardized and are traded on regulated exchanges, while forward contracts
are traded in over-the-counter markets and generally do not have standardized
terms. The Corporation uses futures and forward contracts in connection with
its trading activities.
For instruments that are traded on a regulated exchange, the exchange assumes
the credit risk that a counter party will not settle and generally requires a
margin deposit of cash or securities as collateral to minimize potential credit
risk. Credit risk associated with futures and forward contracts is limited to
the estimated aggregate replacement cost of those futures and forward contracts
in a gain position and was not material at December 31, 1993. Credit risk
related to futures contracts is substantially mitigated by daily cash
settlements with the exchanges for the net change in futures contract value.
Market risk arises from movements in securities values, foreign exchange rates
and interest rates.
Option contracts grant the contract "purchaser" the right, but not the
obligation, to purchase or sell a specified amount of a financial instrument
during a specified period at a predetermined price. The Corporation acts as
both "purchaser" and "seller" of option contracts, which are used in reducing
exposure to market risk in connection with its positions in certain sponsored
index funds. Market risk arises from changes in market value of contractual
positions due to movements in underlying securities or stock indices. The
Corporation limits its exposure to market risk by entering into hedge
positions. Credit risk relates to the ability of the Corporation's counter
party to meet its settlement obligations under the contract and generally is
limited to the estimated aggregate replacement cost of those contracts in a
gain position and was not material at December 31, 1993.
ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES:
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", which is effective for investments held as of or
acquired after January 1, 1994. In the first quarter of 1994, the Corporation
intends to adopt the provisions of the
B-3
<PAGE>
new standard, which are not expected to have a material impact on the results
of operations or financial condition of the Corporation.
NOTE 3--FIXED ASSETS:
The Corporation and its subsidiaries provide for depreciation on fixed assets
(including licensed and certain internally developed computer software) based
on the estimated useful life of the assets, using the straight line method.
Amortization of leasehold improvements is computed over the respective terms of
the leases.
The major classifications of fixed assets were as follows at December 31,
1993 (000's omitted):
<TABLE>
<S> <C>
Furniture, fixtures and equipment................................ $ 50,568
Leasehold improvements........................................... 30,695
Licensed and certain internally developed computer software...... 11,375
Premises......................................................... 7,590
--------
100,228
Less--accumulated depreciation and amortization.................. 37,585
--------
$ 62,643
========
</TABLE>
NOTE 4--DEFERRED SALES COMMISSIONS:
During 1993, certain funds sponsored by the Corporation began offering
multiple classes of shares. These funds offer Class A shares, which are sold
with a sales charge imposed at the time of purchase, and Class B shares which
are subject to a contingent deferred sales charge imposed on redemptions made
within a specified period. Class B shares are also subject to an annual
distribution fee payable to Service Corporation pursuant to a distribution plan
adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940
("Rule 12b-1 Plan"). Sales commissions paid by Service Corporation to
broker/dealers for selling Class B shares are capitalized by Service
Corporation and amortized to operations over six years. This amortization
period approximates the period of time during which the sales commissions paid
to broker/dealers are expected to be recovered from the funds through the
payments made pursuant to the funds' Rule 12b-1 Plans. Contingent deferred
sales charges, when received by Service Corporation, reduce unamortized
deferred sales commissions. At December 31, 1993, deferred sales commissions
included in Other assets amounted to $14.2 million (net of amortization of $1.2
million).
NOTE 5--STOCKHOLDERS' EQUITY:
At December 31, 1993, Additional paid-in capital and Retained earnings were
not available for payment of dividends to the extent of $196.6 million,
substantially representing the cost of treasury stock and required capital for
the Corporation's regulated subsidiaries.
Pursuant to the merger agreement (see Note 9), the Corporation may not
declare dividends, other than the regular quarterly dividend of $.19 per share,
and may not purchase any additional treasury shares.
On January 19, 1994, the Board of Directors of the Corporation declared a
first quarter dividend of $.19 per share, payable on February 16, 1994 to
stockholders of record at the close of business on February 7, 1994.
NOTE 6--STOCK PLANS AND CONTINGENT BENEFIT PLAN:
1989 NON-QUALIFIED STOCK OPTION PLAN:
In 1989, the stockholders of the Corporation approved the 1989 Non-Qualified
Stock Option Plan (the "Plan") of the Corporation. The Plan authorizes the
Corporation to grant Options to purchase up to 1.8 million shares of common
stock to key employees and key consultants who render services to the
Corporation, at a price of not less than 95% of the price of the Corporation's
common stock on the New York Stock Exchange on the day the Option is granted.
The Plan provides generally that no Option shall be exercisable within two
years nor more than ten years from the date of grant. Shares acquired upon
exercise of Options will be registered under the Securities Act of 1933 and may
be resold pursuant to such registration.
B-4
<PAGE>
The following table summarizes the 1989 Non-Qualified Stock Option Plan
activity in 1993 (000's omitted):
<TABLE>
<S> <C>
Outstanding at beginning of year................................... 1,388
Exercised during the year.......................................... (6)
Forfeited during the year.......................................... (8)
Granted during the year............................................ 50
-----
Outstanding at end of year......................................... 1,424
=====
</TABLE>
Such options may be exercised at prices ranging from $24.06 to $41.63.
At December 31, 1993, 603,000 of such Options were exercisable. The remaining
options are exercisable as follows: 344,500 in 1994, 332,000 in 1995, 119,500
in 1996 and 12,500 in 1997 and 1998.
INCENTIVE STOCK OPTION PLAN:
In 1982, the stockholders of the Corporation approved a plan under which
Incentive Stock Options may be granted to the Corporation's key executives
allowing them to purchase up to 1.5 million shares of common stock of the
Corporation. Under the plan, Options were granted for the purchase of either
Book Value Shares or Market Shares. The plan provides that no Option shall be
exercisable within one year, nor more than ten years, from the date of grant.
The plan expired in 1992, and no new Options may be granted under the plan,
although existing unexercised Options will continue in accordance with their
terms. No Market Shares are outstanding.
Book Value Shares must be acquired from and sold back to the Corporation at
the book value (as defined in the plan) of the Corporation's Common Stock.
The plan also provides for compensation (included in Accrued Compensation and
Benefits) to recipients of Options in amounts equal to any cash dividends
declared by the Corporation during the period following the grant of an Option
up to the date of its exercise.
Additional information with respect to Incentive Stock Options is as follows
for 1993 (000's omitted):
<TABLE>
<S> <C>
Outstanding at beginning of year..................................... 352
Exercised during the year*........................................... (21)
---
Outstanding at end of year........................................... 331
===
</TABLE>
- - - - - - - - -------
* Exercised for an aggregate of $319,000.
In connection with the exercise of the Options, the Corporation received
interest bearing notes payable over a maximum of 15 years. The balance of such
notes at December 31, 1993 was $148,000. During 1993, the Corporation
repurchased 29,000 shares issued under the plan, for an aggregate of $500,000.
At December 31, 1993 Options to purchase 186,000 Book Value Shares were
exercisable. The remaining Options to purchase Book Value Shares are
exercisable as follows: 26,700 per year from 1994 to 1997 and 19,000 in each of
1998 and 1999. Such Options to purchase Book Value Shares may be exercised at
prices ranging from $4.22 to $15.69. If the Corporation had been obligated to
repurchase the Book Value Shares issued and outstanding and also the Book Value
Shares related to exercisable Options under the plan at December 31, 1993, the
net amount payable would have been approximately $3.4 million.
OPTIONAL INCENTIVE PAYMENT PLAN:
In 1986, the Corporation's Board of Directors approved an Optional Incentive
Payment Plan (the "Plan") pursuant to which individuals who have previously
exercised Stock Purchase Rights ("Rights") and Incentive Stock Options
("Options") (see above) could sell the shares related to such rights and
Options back to the Corporation pursuant to the provisions of those respective
plans, and in turn receive an equal number of units. Pursuant to the terms of
the Plan, quarterly payments are made on each unit held in amounts equal to the
quarterly after tax earnings per share of the Corporation and such amounts are
charged to operations.
B-5
<PAGE>
The activity in Plan units was as follows for 1993 (000's omitted):
<TABLE>
<S> <C>
Outstanding at beginning of year................................... 1,915
Issued in connection with Options.................................. 29
Forfeited during the year.......................................... (15)
-----
Outstanding at end of year......................................... 1,929
=====
</TABLE>
CONTINGENT BENEFIT PLAN:
In 1984 a Contingent Benefit Plan (the "Plan") was approved which provides
for specified benefit payments to designated key employees of the Corporation
in the event of a change of control of the Corporation, as defined in the Plan,
and should their employment terminate during a specified period after such
change of control (see Note 9).
NOTE 7--EMPLOYEES' BENEFIT PLANS:
The employees of the Corporation and certain of its subsidiaries are covered
by a Retirement Profit-Sharing Plan and a related Deferred Compensation Plan.
In general, the Retirement Profit-Sharing Plan provides for the payment of
death, disability and retirement benefits to employees or their beneficiaries
in amounts equal to the value of their proportionate interests in the plan.
The Corporation has a defined benefit pension plan which covers employees of
the Corporation and certain of its subsidiaries. The costs to the Corporation
and the pension plan assets and liabilities are not material.
NOTE 8--LEASES:
Future minimum payments, by year and in the aggregate, under noncancelable
operating leases (premises) with initial or remaining terms of one or more
years, were as follows at December 31, 1993 (000's omitted):
<TABLE>
<S> <C>
1994........................................................... $ 13,827
1995........................................................... 14,523
1996........................................................... 14,589
1997........................................................... 14,682
1998........................................................... 13,316
1999-2005...................................................... 79,406
--------
Total net minimum lease payments............................... $150,343*
========
</TABLE>
- - - - - - - - -------
* There are no rental commitments beyond 2005.
NOTE 9--MERGER WITH MELLON BANK CORPORATION:
On December 5, 1993, the Corporation entered into an Agreement and Plan of
Merger providing for the merger of the Corporation with a subsidiary of Mellon
Bank Corporation ("Mellon"). Under the terms of the agreement, the
Corporation's stockholders will be entitled to receive .88017 shares of Mellon
Common Stock for each share of the Corporation's Common Stock, in a tax-free
exchange. Following the merger, it is planned that the Corporation will be a
direct subsidiary of Mellon Bank, N.A. Closing of the merger is subject to a
number of contingencies, including the receipt of certain regulatory approvals,
the approvals of the stockholders of the Corporation and Mellon, and approvals
of the Boards of Directors and shareholders of the mutual funds advised or
administered by the Corporation. The merger is expected to occur in mid-1994,
but could occur later. The merger agreement provides for the Corporation to pay
Mellon $50 million, should the Corporation, among other matters, engage in
certain business combination transactions specified in the agreement, with any
person other than Mellon, or under certain other defined circumstances. Costs
incurred in connection with the merger, including payments related to the
Contingent Benefit Plan (see Note 6), will be charged against operations of the
merged entities.
B-6
<PAGE>
NOTE 10--LITIGATION:
Subsequent to the announcement of the proposed merger with Mellon (see Note
9), public shareholders of the Corporation commenced six purported class action
suits in the Supreme Court of the State of New York, County of New York, naming
the Corporation, Mellon and the individual directors of the Corporation as
defendants, with respect to the transactions contemplated by the Agreement and
Plan of Merger with Mellon. The Corporation believes that these complaints lack
merit and intends to defend them vigorously.
On December 22, 1993, six shareholders of mutual funds of which the
Corporation is the adviser ("Dreyfus-managed mutual funds") filed an
application with the U.S. Securities and Exchange Commission (the "SEC") for a
statutory determination that the "non-interested" directors of the individual
Dreyfus-managed mutual funds are "interested" directors within the meaning of
the Investment Company Act of 1940, thereby prohibiting them from voting on
each of the fund's advisory contracts and other related matters in connection
with the merger with Mellon (the "Application"). The non-interested directors
have opposed the Application. Counsel for the non-interested directors has
advised the Corporation that the Application lacks merit.
REPORT OF ERNST & YOUNG,
INDEPENDENT AUDITORS
Stockholders and Board of Directors
The Dreyfus Corporation
We have audited the accompanying consolidated balance sheet of The Dreyfus
Corporation and Subsidiary Companies as of December 31, 1993. This consolidated
balance sheet is the responsibility of the Corporation's management. Our
responsibility is to express an opinion on this consolidated balance sheet
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated balance sheet is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
balance sheet presentation. We believe that our audit of the consolidated
balance sheet provides a reasonable basis for our opinion.
In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the consolidated financial position of The
Dreyfus Corporation and Subsidiary Companies at December 31, 1993, in
conformity with generally accepted accounting principles.
Ernst & Young
New York, New York
January 27, 1994
B-7
<PAGE>
EXHIBIT C
PART (A)(1) OF PROPOSAL 13 OF THE PROXY STATEMENT IS APPLICABLE TO THE
FOLLOWING NON-MONEY MARKET FUNDS:
Dreyfus A Bonds Plus, Inc.
Dreyfus California Intermediate Municipal Bond Fund
Dreyfus California Municipal Income, Inc./1/
Dreyfus California Tax Exempt Bond Fund, Inc.
Dreyfus Capital Growth Fund (A Premier Fund)
Dreyfus Connecticut Intermediate Municipal Bond Fund
Dreyfus Florida Intermediate Municipal Bond Fund
The Dreyfus Fund Incorporated
Dreyfus GNMA Fund, Inc.
Dreyfus Growth Opportunity Fund, Inc.
Dreyfus Insured Municipal Bond Fund, Inc.
Dreyfus Intermediate Municipal Bond Fund, Inc.
Dreyfus Municipal Income, Inc./1/
Dreyfus Massachusetts Intermediate Municipal Bond Fund
Dreyfus Massachusetts Tax Exempt Bond Fund
Dreyfus Municipal Bond Fund, Inc.
Dreyfus New Jersey Intermediate Municipal Bond Fund
Dreyfus New Jersey Municipal Bond Fund, Inc.
Dreyfus New Leaders Fund, Inc.
Dreyfus New York Insured Tax Exempt Bond Fund
Dreyfus New York Municipal Income, Inc./1/
Dreyfus New York Tax Exempt Bond Fund, Inc.
Dreyfus New York Tax Exempt Intermediate Bond Fund
Dreyfus 100% U.S. Treasury Intermediate Term Fund
Dreyfus 100% U.S. Treasury Long Term Fund
Dreyfus 100% U.S. Treasury Short Term Fund
Dreyfus Short-Intermediate Government Fund
Dreyfus Short-Intermediate Municipal Bond Fund
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Strategic Governments Income, Inc.
Dreyfus Strategic Income
Dreyfus Strategic Investing
Dreyfus Strategic Municipal Bond Fund, Inc./1/
Dreyfus Strategic Municipals, Inc.
The Dreyfus Third Century Fund, Inc.
Dreyfus Variable Investment Fund (all Series, except the Money Market
Portfolio, Growth and Income Portfolio and International Equity Portfolio)
General California Municipal Bond Fund, Inc.
General Municipal Bond Fund, Inc.
General New York Municipal Bond Fund, Inc.
Premier California Municipal Bond Fund
Premier GNMA Fund
Premier Insured Municipal Bond Fund
Premier Municipal Bond Fund
Premier New York Municipal Bond Fund
Premier State Municipal Bond Fund (all Series)
- - - - - - - - -------
/1/This closed-end Fund is referred to in Part (a)(1) of Proposal 13 of the
Proxy Statement.
C-1
<PAGE>
PART (B) OF PROPOSAL 13 OF THE PROXY STATEMENT IS APPLICABLE TO THE FOLLOWING
FUNDS:
Dreyfus A Bonds Plus, Inc.
Dreyfus California Intermediate Municipal Bond Fund
Dreyfus California Municipal Bond Fund, Inc.
Dreyfus California Tax Exempt Money Market Fund
Dreyfus Capital Growth Fund (A Premier Fund)
Dreyfus Cash Management
Dreyfus Cash Management Plus, Inc.
Dreyfus Connecticut Intermediate Municipal Bond Fund
Dreyfus Florida Intermediate Municipal Bond Fund
The Dreyfus Fund Incorporated
Dreyfus GNMA Fund, Inc.
Dreyfus Government Cash Management
Dreyfus Growth Opportunity Fund, Inc.
Dreyfus Insured Municipal Bond Fund, Inc.
Dreyfus Intermediate Municipal Bond Fund, Inc.
Dreyfus Massachusetts Intermediate Municipal Bond Fund
Dreyfus Massachusetts Tax Exempt Bond Fund
Dreyfus Municipal Bond Fund, Inc.
Dreyfus New Jersey Intermediate Municipal Bond Fund
Dreyfus New Jersey Municipal Bond Fund, Inc.
Dreyfus New Leaders Fund, Inc.
Dreyfus New York Insured Tax Exempt Bond Fund
Dreyfus New York Tax Exempt Bond Fund, Inc.
Dreyfus New York Tax Exempt Intermediate Bond Fund
Dreyfus New York Tax Exempt Money Market Fund
Dreyfus 100% U.S. Treasury Intermediate Term Fund
Dreyfus 100% U.S. Treasury Long Term Fund
Dreyfus 100% U.S. Treasury Short Term Fund
Dreyfus Short-Intermediate Government Fund
Dreyfus Short-Intermediate Municipal Bond Fund
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Tax Exempt Cash Management
The Dreyfus Third Century Fund, Inc.
Dreyfus Treasury Cash Management
Dreyfus Treasury Prime Cash Management
Dreyfus Variable Investment Fund (all Series, except Growth and Income
Portfolio and International Equity Portfolio)
General California Municipal Bond Fund, Inc.
General California Municipal Money Market Fund
General Government Securities Money Market Fund, Inc.
General New York Municipal Money Market Fund
Premier California Municipal Bond Fund
Premier GNMA Fund
Premier Municipal Bond Fund
Premier New York Municipal Bond Fund
Premier State Municipal Bond Fund (all Series)
C-2
<PAGE>
PART (C) OF PROPOSAL 13 OF THE PROXY STATEMENT IS APPLICABLE TO THE FOLLOWING
FUNDS:
Comstock Partners Strategy Fund, Inc.
Dreyfus A Bonds Plus, Inc.
Dreyfus BASIC Municipal Fund (Money Market Series)
Dreyfus California Tax Exempt Money Market Fund
Dreyfus Cash Management
Dreyfus Cash Management Plus, Inc.
Dreyfus Connecticut Municipal Money Market Fund, Inc.
The Dreyfus Fund Incorporated
Dreyfus GNMA Fund, Inc.
Dreyfus Government Cash Management
Dreyfus Institutional Money Market Fund
Dreyfus Liquid Assets, Inc.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Dreyfus Money Market Instruments, Inc.
Dreyfus Municipal Cash Management Plus, Inc.
Dreyfus Municipal Money Market Fund, Inc.
Dreyfus New Jersey Municipal Money Market Fund, Inc.
Dreyfus New Leaders Fund, Inc.
Dreyfus New York Municipal Cash Management
Dreyfus New York Tax Exempt Money Market Fund
Dreyfus Pennsylvania Municipal Money Market Fund
Dreyfus Short-Intermediate Government Fund
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Tax Exempt Cash Management
The Dreyfus Third Century Fund, Inc.
Dreyfus Treasury Cash Management
Dreyfus Treasury Prime Cash Management
Dreyfus Variable Investment Fund (all Series, except Growth and Income
Portfolio and International Equity Portfolio)
Dreyfus Worldwide Dollar Money Market Fund, Inc.
General California Municipal Bond Fund, Inc.
General California Municipal Money Market Fund
General Government Securities Money Market Fund, Inc.
General Money Market Fund, Inc.
General Municipal Money Market Fund, Inc.
General New York Municipal Money Market Fund
Premier Global Investing
C-3
<PAGE>
DREYFUS NEW YORK TAX EXEMPT INTERMEDIATE BOND FUND
FUND EXHIBIT
PART A
1. PERTAINING TO THE MEETING
. Meeting Date: Tuesday, August 2, 1994
. Meeting Time: 9:30 a.m.
. Meeting Place: New York Marriott Marquis, 1535 Broadway, Westside South
Center, 5th Floor, New York, New York
. Shares outstanding as of May 4, 1994: 22,161,275.954
2. PERTAINING TO ADVISORY ARRANGEMENTS WITH DREYFUS
. Date Board approved New Agreement: May 25, 1994
. Date stockholders last approved Existing Agreement: January 25, 1989
. Date Board last approved Existing Agreement: April 6, 1994
. Date of Existing Agreement: May 20, 1987
. Investment advisory fee as a percentage of average daily net assets under
Existing and New Agreements: .60%
. Investment advisory fee payable to Dreyfus for most recent fiscal year:
$2,342,023
. Fee reductions for most recent fiscal year resulting from undertakings:
$303,115
. Net investment advisory fee paid to Dreyfus for most recent fiscal year:
$2,038,908
. The amount of transactions during the last fiscal year in newly issued debt
instruments in fixed price public offerings directed to an underwriter or
underwriters in consideration of, among other things, research services
provided: $2,972,057
3. PERTAINING TO AUDITORS
. Date Board last approved Auditors: April 6, 1994
4. PERTAINING TO THE BOARD
. Number of Board, and where applicable committee, meetings held during the
last fiscal year: 6
. Board members, if any, attending fewer than 75% of all Board and committee
meetings held in the last fiscal year during the period the Board member was
in office: Arnold S. Hiatt and David J. Mahoney
. Rate at which Board members are paid (annual retainer/per meeting fee):
$2,500/$250
. Total fees and expenses received by the Board members as a group for the
last fiscal year: $16,735
5. PERTAINING TO 12B-1 PLANS
. The Fund is subject to a Type 1 12b-1 Plan.
. The amount the Fund paid under its 12b-1 Plan during its last fiscal year:
$975,843
. Annual rate at which fees under the 12b-1 Plan are payable: .25%
6. PERTAINING TO SHARE OWNERSHIP OF PERSONS, IF ANY, KNOWN TO OWN AT LEAST 5%
OF THE FUND'S OUTSTANDING VOTING SECURITIES AS OF MAY 4, 1994
Not applicable
<PAGE>
7. MISCELLANEOUS
. For purposes of the section of the Proxy Statement entitled "Proposal 1--
Portfolio Transactions," the Fund is a Bond Fund.
. Copies of the Fund's Annual Report for the fiscal year ended May 31, 1993
and Semi-Annual Report for the period ended November 30, 1993 have been
mailed to stockholders. The Fund's 1994 Annual Report was not available as
of the date of these proxy materials. There has been no material adverse
change in the Fund's financial operations (other than any changes
attributable to general market or economic conditions) since the date of the
financial statements contained in such Semi-Annual Report. Proxies will not
be voted for the election of Board members unless (a) the Fund receives a
certificate from its President, dated the date on which such vote is to be
taken, that, to his knowledge, there has been no material adverse change in
the Fund's financial operations (other than any changes attributable to
general market or economic conditions) since the date of the financial
statements contained in the Semi-Annual Report for the period ended
November 30, 1993, unless such material adverse change has been disclosed to
stockholders in additional proxy solicitation material, or (b) the Fund
mails to all stockholders of record audited financial statements of the Fund
in an annual report for its latest fiscal year and gives stockholders an
opportunity to revoke any proxies previously furnished.
2
<PAGE>
PART B
This Exhibit sets forth information relevant to the election of the Nominees
(except as noted) for the following Funds:
*Dreyfus BASIC Municipal Fund ("DBMF")
Dreyfus California Tax Exempt Bond Fund, Inc. ("DCTEB")
Dreyfus Connecticut Municipal Money Market Fund, Inc. ("DCMMM")
Dreyfus GNMA Fund, Inc. ("DGNMA")
Dreyfus Intermediate Municipal Bond Fund, Inc. ("DIMB")
Dreyfus Massachusetts Municipal Money Market Fund ("DMMMM")
Dreyfus Massachusetts Tax Exempt Bond Fund ("DMTEB")
Dreyfus Michigan Municipal Money Market Fund, Inc. ("DMIMM")
Dreyfus New Jersey Municipal Money Market Fund, Inc. ("DNJMM")
Dreyfus New York Tax Exempt Bond Fund, Inc. ("DNYTEB")
Dreyfus New York Tax Exempt Intermediate Bond Fund ("DNYTEI")
Dreyfus New York Tax Exempt Money Market Fund ("DNYTEM")
Dreyfus Ohio Municipal Money Market Fund, Inc. ("DOMMM")
Dreyfus Pennsylvania Municipal Money Market Fund ("DPMMM")
- - - - - - - - -------
* Fund will not elect Board members.
<TABLE>
<CAPTION>
BOARD
NAME, PRINCIPAL OCCUPATION AND BUSINESS MEMBER
EXPERIENCE FOR PAST FIVE YEARS AGE SINCE
--------------------------------------- --- ------
<S> <C> <C>
/1/DAVID W. BURKE 58 DBMF-1994
Vice President and Chief Administrative Officer of Dreyfus DCTEB-1994
since October 1990 and an officer, director or trustee of DCMMM-1994
other investment companies advised or administered by DIMB-1994
Dreyfus. From 1977 to 1990, Mr. Burke was involved in the DMMMM-1994
management of national television news, as Vice President DMTEB-1994
and Executive Vice President of ABC News, and subsequently DMIMM-1994
as President of CBS News. DNJMM-1994
DNYTEB-1994
DNYTEI-1994
DOMMM-1994
DPMMM-1994
SAMUEL CHASE 62 DBMF-1991
Since 1982, President of Samuel Chase & Company, Ltd., and DCTEB-1985
from 1983 to 1990, Chairman of Chase, Brown & Blaxall, DCMMM-1990
Inc., economic consulting firms. His address is 4410 DGNMA-1985
Massachusetts Avenue, N.W., Suite 408, Washington, D.C. DIMB-1985
20016. DMMMM-1991
DMTEB-1985
DMIMM-1990
DNJMM-1988
DNYTEB-1985
DNYTEI-1987
DNYTEM-1987
DOMMM-1991
DPMMM-1990
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
BOARD
NAME, PRINCIPAL OCCUPATION AND BUSINESS MEMBER
EXPERIENCE FOR PAST FIVE YEARS AGE SINCE
--------------------------------------- --- ------
<S> <C> <C>
JONI EVANS 52 DBMF-1991
Senior Vice President of the William Morris Agency. From DCTEB-1983
September 1987 to May 1993, Executive Vice President of DCMMM-1990
Random House, Inc., and, from January 1991 to May 1993, DGNMA-1985
President and Publisher of Turtle Bay Books; from January DIMB-1983
1987 to December 1990, Publisher of Random House--Adult DMMMM-1991
Trade Division, from 1985 to 1987, President of Simon & DMTEB-1985
Schuster--Trade Division. Her address is 1350 Avenue of DMIMM-1990
the Americas, New York, New York 10019. DNJMM-1988
DNYTEB-1983
DNYTEI-1987
DNYTEM-1987
DOMMM-1991
DPMMM-1990
/1/LAWRENCE M. GREENE 82 DBMF-1991
Legal Consultant to and a Director of Dreyfus, Executive DCTEB-1985
Vice President of DSC and an officer, director or trustee DCMMM-1990
of other investment companies advised or administered by DGNMA-1985
Dreyfus. DIMB-1985
DMMMM-1991
DMTEB-1985
DMIMM-1990
DNJMM-1988
DNYTEB-1985
DNYTEI-1987
DNYTEM-1987
DOMMM-1991
DPMMM-1990
ARNOLD S. HIATT 66 DBMF-1991
Chairman of The Stride Rite Foundation. From 1969 to June DCTEB-1983
1992, Chairman of the Board, President or Chief Executive DCMMM-1990
Officer of The Stride Rite Corporation, a multidivisional DGNMA-1985
footwear manufacturing and retailing company. Mr. Hiatt DIMB-1983
is also a Director of the Cabot Corporation. His address DMMMM-1991
is 400 Atlantic Avenue, Boston, Massachusetts 02110. DMTEB-1985
DMIMM-1990
DNJMM-1988
DNYTEB-1983
DNYTEI-1987
DNYTEM-1987
DOMMM-1991
DPMMM-1990
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
BOARD
NAME, PRINCIPAL OCCUPATION AND BUSINESS MEMBER
EXPERIENCE FOR PAST FIVE YEARS AGE SINCE
--------------------------------------- --- ------
<S> <C> <C>
DAVID J. MAHONEY 70 DBMF-1991
President of David Mahoney Ventures since 1983. From 1968 DCTEB-1991
to 1983, he was Chairman and Chief Executive Officer of DCMMM-1991
Norton Simon Inc., a producer of consumer products and DGNMA-1991
services. Mr. Mahoney is also a director of National DIMB-1991
Health Laboratories Inc., Bionaire Inc. and Good DMMMM-1991
Samaritan Health Systems, Inc. His address is 745 Fifth DMTEB-1991
Avenue, Suite 700, New York, New York 10151. DMIMM-1991
DNJMM-1991
DNYTEB-1991
DNYTEI-1991
DNYTEM-1991
DOMMM-1991
DPMMM-1991
/1/RICHARD J. MOYNIHAN--All Funds, except DGNMA. 59 DBMF-1991
President and Investment Officer of each Fund, except DCTEB-1983
DGNMA. An employee of Dreyfus and an officer, director or DCMMM-1990
trustee of other investment companies advised or DIMB-1983
administered by Dreyfus. DMMMM-1991
DMTEB-1985
DMIMM-1990
DNJMM-1988
DNYTEB-1983
DNYTEI-1987
DNYTEM-1987
DOMMM-1991
DPMMM-1990
BURTON N. WALLACK 43 DBMF-1991
President and co-owner of Wallack Management Company, a DCTEB-1991
real estate management company managing real estate in DCMMM-1991
the New York City area. His address is 18 East 64th DGNMA-1991
Street, Suite 3D, New York, New York 10021. DIMB-1991
DMMMM-1991
DMTEB-1991
DMIMM-1991
DNJMM-1991
DNYTEB-1991
DNYTEI-1991
DNYTEM-1991
DOMMM-1991
DPMMM-1991
</TABLE>
- - - - - - - - -------
/1/""Interested Person" as defined in the Act.
In addition to the persons named as officers above, the Funds' executive
officers are:
<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUNDS AGE EXPERIENCE FOR PAST FIVE YEARS
----------------- --- ---------------------------------
<S> <C> <C>
GARITT A. KONO 53 An employee of Dreyfus since September 1992 and an
President and officer of other investment companies advised and
Investment Officer administered by Dreyfus. Prior thereto, Mr. Kono was
of DGNMA. with the First Boston Corporation for 15 years, where
he was Vice President of the Fixed Income area.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH PRINCIPAL OCCUPATION AND BUSINESS
FUNDS AGE EXPERIENCE FOR PAST FIVE YEARS
---------------------- --- ---------------------------------
<S> <C> <C>
A. PAUL DISDIER 38 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
KAREN M. HAND 35 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
STEPHEN C. KRIS 40 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
JILL C. SHAFFRO 30 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
L. LAWRENCE TROUTMAN 47 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
SAMUEL J. WEINSTOCK 35 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
MONICA S. WIEBOLDT 44 An employee of Dreyfus and an officer of other
Vice President and investment companies advised and administered by
Investment Officer of Dreyfus.
each Fund, except
DGNMA.
DANIEL C. MACLEAN 51 Vice President and General Counsel of Dreyfus,
Vice President of each Secretary of DSC and an officer of other investment
Fund. companies advised or administered by Dreyfus.
JEFFREY N. NACHMAN 43 Vice President--Mutual Fund Accounting of Dreyfus and
Vice President and an officer of other investment companies advised or
Treasurer of DBMF; Vice administered by Dreyfus.
President--Financial of
each other Fund.
JOHN J. PYBURN 58 Assistant Vice President of Dreyfus and an officer of
Treasurer of each Fund, other investment companies advised or administered by
except DBMF. Dreyfus.
MARK N. JACOBS 48 Secretary and Deputy General Counsel of Dreyfus and an
Secretary of each Fund. officer of other investment companies advised or
administered by Dreyfus.
ROBERT I. FRENKEL 39 Senior Assistant General Counsel of Dreyfus and an
Assistant Secretary of officer of other investment companies advised or
each Fund. administered by Dreyfus.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH PRINCIPAL OCCUPATION AND BUSINESS
FUNDS AGE EXPERIENCE FOR PAST FIVE YEARS
---------------------- --- ---------------------------------
<S> <C> <C>
CHRISTINE PAVALOS 61 Assistant Secretary of Dreyfus, DSC and other
Assistant Secretary of investment companies advised or administered by
each Fund. Dreyfus.
JEAN FARLEY 30 Senior Accounting Manager in the Fund Accounting
Controller of DBMF (Bond Department of Dreyfus and an officer of other
and Intermediate Bond investment companies advised or administered by
Series) and DMTEB. Dreyfus.
GREGORY S. GRUBER 35 Senior Accounting Manager in the Fund Accounting
Controller of DCTEB, Department of Dreyfus and an officer of other
DIMB, DNYTEB and DNYTEI. investment companies advised or administered by
Dreyfus.
PAUL T. MOLLOY 36 Senior Accounting Manager in the Fund Accounting
Controller of each Fund, Department of Dreyfus and an officer of other
except DBMF (Bond and investment companies advised or administered by
Intermediate Bond Dreyfus.
Series), DCTEB, DGNMA,
DIMB, DMTEB, DNYTEB and
DNYTEI.
JAMES M. WINDELS 35 Senior Accounting Manager in the Fund Accounting
Controller of DGNMA. Department of Dreyfus and an officer of other
investment companies advised or administered by
Dreyfus.
</TABLE>
The address of each Interested Person and officer of the Fund is 200 Park
Avenue, New York, New York 10166.
The following table presents certain information for each Fund regarding the
beneficial ownership of its shares as of May 4, 1994 by each officer and
Nominee of the Fund owning shares on such date. In each case, such amount
constitutes less than 1% of the Fund's outstanding shares.
<TABLE>
<CAPTION>
NAME
OF
FUND NAME NUMBER OF SHARES
---- ---- ----------------
<S> <C> <C>
DGNMA Lawrence M. Greene 1,466.802
DIMB David W. Burke 40,494.493
DIMB Lawrence M. Greene 38,255.570
DIMB Arnold S. Hiatt 174,212.440
DNJMM A. Paul Disdier 1,587.770
DNJMM Mark N. Jacobs 62,920.460
DNJMM Richard J. Moynihan 131,153.250
DNYTEB Lawrence M. Greene 10,243.621
DNYTEI Lawrence M. Greene 9,754.680
DNYTEM Robert I. Frenkel 11.600
DNYTEM Christine Pavalos 61,541.750
DOMMM John J. Pyburn 186,140.280
</TABLE>
7
<PAGE>
MANAGEMENT AGREEMENT
DREYFUS NEW YORK TAX EXEMPT INTERMEDIATE BOND FUND
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
, 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund") 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 the Fund's portfolio in accordance with the
Fund's investment objectives and policies as stated in its 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 the Fund's investments and conduct a continuous program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Fund's assets. You will furnish to the Fund such statistical information, with
respect to the investments which the Fund may hold or contemplate purchasing,
as the Fund may reasonably request. The Fund wishes to be informed of
important developments materially affecting its 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 the Fund's stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities; calculate
the net asset value of the Fund's 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 the Fund, provided that
nothing herein shall be deemed to protect or purport to protect you against
any liability to the Fund 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 annual rate
of .60 of 1% of the value of the Fund's average daily net assets. 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.
Upon any termination of this Agreement before the end of any month, the fee
for such part of a
8
<PAGE>
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 the Fund's
net assets shall be computed in the manner specified in the Fund's charter
documents for the computation of the value of the Fund's 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./1/
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 1 1/2% of the average value of the Fund's net
assets for the fiscal year, the Fund may deduct from the fees to be paid
hereunder, or you will bear, such excess expense. Your obligation pursuant
hereto will be limited to the amount of your fees hereunder. 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 the Fund or the
size of the position obtainable for or disposed of by the Fund.
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.
This Agreement shall continue until May 20, 1995, and thereafter shall
continue automatically for successive annual periods ending on May 20th of
each year, 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 Fund's 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. This Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
- - - - - - - - -------
/1/See Notes 1 and 2 below.
9
<PAGE>
Board or by vote of holders of a majority of the Fund's shares or, upon not
less than 90 days' notice, by you. This Agreement also will terminate
automatically 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 NEW YORK TAX EXEMPT
INTERMEDIATE BOND FUND
By: ______________________________
Accepted:
THE DREYFUS CORPORATION
By: ______________________________
PLEASE READ CAREFULLY THE FOLLOWING
NOTES TO NEW AGREEMENT
1. The Existing Agreement does not enumerate all expenses currently borne by
the Fund. The structure of the Existing Agreement is to give examples of
these expenses. The New Agreement provides uniform examples among the
Funds. The Fund is eligible to bear these--as well as all other--Fund
operating expenses, whether or not enumerated.
2. When Rule 12b-1 under the Act was newly adopted, it was thought appropriate
to include in the Existing Agreement of a Fund operating with a 12b-1 Plan,
such as the Fund, a statement to the effect that the Fund paid expenses
pursuant to a Rule 12b-1 Plan. With the passage of time, the prevalence of
Rule 12b-1 Plans and the increased prospectus disclosure highlighting a
Fund's adoption of such a Plan, this language is thought to be unnecessary
and for the sake of uniformity has been deleted.
3. The New Agreement expressly provides for Dreyfus to engage, at its expense,
one or more entities to provide sub-administration services to the Fund. It
currently is contemplated that the New Distributor or an affiliate of the
New Distributor would provide these services. The Existing Agreement does
not so provide.
10
<PAGE>
DREYFUS NEW YORK TAX EXEMPT INTERMEDIATE BOND FUND
SERVICE PLAN
INTRODUCTION: It has been proposed that the above-captioned investment
company (the "Fund") adopt a Service Plan (the "Plan") in accordance with Rule
12b-1, promulgated under the Investment Company Act of 1940, as amended (the
"Act"). Under the Plan, the Fund would pay for the costs and expenses of
preparing, printing and distributing its prospectuses and statements of
additional information, and would (a) reimburse the Fund's distributor (the
"Distributor") for payments to third parties for distributing the Fund's
shares and servicing shareholder accounts ("Servicing") (the payments in this
clause (a) being referred to as the "Distributor Payments") and (b) pay The
Dreyfus Corporation, Dreyfus Service Corporation and any affiliate of either
of them (collectively, "Dreyfus") for advertising and marketing relating to
the Fund and for Servicing (the payments in this clause (b) being referred to
as "Dreyfus Payments"). If this proposal is to be implemented, the Act and
said Rule 12b-1 require that a written plan describing all material aspects of
the proposed financing be adopted by the Fund.
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 assets of the Fund for such purposes.
In voting to approve the implementation of such a plan, the Board members
have concluded, in the exercise of their reasonable business judgment and in
light of their respective 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 all costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders. The Fund also shall pay an amount of
the costs and expenses in connection with (a) preparing, printing and
distributing the Fund's prospectuses and statements of additional information
used for other purposes and (b) implementing and operating this Plan, such
aggregate amount not to exceed in any fiscal year of the Fund the greater of
$100,000 or .005 of 1% of the average daily value of the Fund's net assets for
such fiscal year.
2. (a) The aggregate annual fee the Fund may pay under this Plan for
Distributor Payments and Dreyfus Payments is .25 of 1% of the value of the
Fund's average daily net assets for such year (the "Aggregate Amount").
(b) The Fund shall reimburse the Distributor in respect of Distributor
Payments an amount not to exceed an annual rate of .25 of 1% of the value of
the Fund's average daily net assets for such year (the "Distributor Amount").
(c) The Fund shall pay Dreyfus in respect of Dreyfus Payments an annual fee
equal to the difference between the Aggregate Amount and the Distributor
Amount for such year.
(d) Each of the Distributor and Dreyfus may pay one or more securities
dealers, financial institutions (which may include banks) or other industry
professionals, such as investment advisers, accountants and estate planning
firms (severally, a "Service Agent"), a fee in respect of the Fund's shares
owned by investors 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 shall determine the amounts to be paid to the Service
Agents to which it will make payments under this Plan 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 or Dreyfus, as the case may be.
3. For the purposes of determining the fees payable under this Plan, the
value of the Fund's net assets shall be computed in the manner specified in
the Fund's charter documents as then in effect for the computation of the
value of the Fund's net assets.
4. The Fund's 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.
11
<PAGE>
5. This Plan will become effective upon the later to occur of (i) the
consummation of the transactions contemplated by the Amended and Restated
Agreement and Plan of Merger dated as of December 5, 1993 by and among Mellon
Bank Corporation, Mellon Bank, N.A., XYZ Sub Corporation and The Dreyfus
Corporation or (ii) approval by (a) holders of a majority of the Fund's
outstanding shares, and (b) 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.
6. 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
5(b) hereof.
7. This Plan may be amended at any time by the Fund's Board, provided that
(a) any amendment to increase materially the costs which the Fund may bear
pursuant to this Plan shall be effective only upon approval by a vote of the
holders of a majority of the Fund's outstanding shares, and (b) any material
amendments of the terms of this Plan shall become effective only upon approval
as provided in paragraph 5(b) hereof.
8. This Plan is terminable without penalty at any time by (a) 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, or (b) vote of the holders of a majority of the Fund's outstanding
shares.
9. The obligations hereunder and under any related Plan 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.
Dated: May 25, 1994
705
12
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DREYFUS NEW YORK TAX EXEMPT INTERMEDIATE BOND FUND
YOUR BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4
AND 13.
1. To approve a new investment advisory agreement For Against Abstain
between the Fund and The Dreyfus Corporation. [_] [_] [_]
2. Election of Trustees. With- For All
For hold Except
[_] [_] [_]
DAVID W. BURKE, SAMUEL CHASE, JONI EVANS,
LAWRENCE M. GREENE, ARNOLD S. HIATT, DAVID J. MAHONEY,
RICHARD J. MOYNIHAN AND BURTON N. WALLACK
If you wish to withhold authority for any particular nominee, mark the
"For All Except" box and strike a line through the nominee's name.
ACCOUNT NUMBER
3. To ratify the selection of the Fund's independent For Against Abstain
auditors. [_] [_] [_]
4. To approve a new Rule 12b-1 plan. [_] [_] [_]
13. To approve changes in the Fund's fundamental policies [_] [_] [_]
and investment restrictions.
14. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting, or any adjournment(s)
thereof.
Please be sure to sign and date this Proxy. Date
- - - - - - - - --------------------------------------------------------------------------------
- - - - - - - - --------- Shareholder sign here ---------- Co-owner (if any) sign here ---------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
DREYFUS NEW YORK
TAX EXEMPT INTERMEDIATE BOND FUND
- - - - - - - - --------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
No matter how many shares you own, your vote is important. A majority is
required by law. Therefore, it is important that you vote NOW in order to avoid
the unnecessary expense of another solicitation of proxies. Accordingly, please
sign, date and mail your proxy card in the return envelope provided.
If you own shares in more than one Dreyfus Fund, you will receive a separate set
of proxy materials and a separate proxy card for each Fund. THESE ARE NOT
DUPLICATES; YOU SHOULD SIGN AND RETURN EACH PROXY CARD IN ORDER FOR YOUR VOTES
TO BE COUNTED.
- - - - - - - - --------------------------------------------------------------------------------
DR705
<PAGE>
DREYFUS NEW YORK
TAX EXEMPT INTERMEDIATE BOND FUND
MEETING OF SHAREHOLDERS - AUGUST 2, 1994
The undersigned shareholder of Dreyfus New York Tax Exempt Intermediate Bond
Fund hereby appoints Christine Pavalos and Steven F. Newman and each of them,
the attorneys and proxies of the undersigned, with full power of substitution,
to vote, as indicated herein, all of the shares of Dreyfus New York Tax Exempt
Intermediate Bond Fund, standing in the name of the undersigned at the close of
business on June 6, 1994 at a Meeting of Shareholders to be held at the New York
Marriott Marquis, 1535 Broadway (between 45th and 46th Streets), Westside South
Center, 5th Floor, New York, New York, commencing at 9:30 a.m. on Tuesday,
August 2, 1994, and at any and all adjournments thereof, with all of the powers
the undersigned would possess if then and there personally present and
especially (but without limiting the general authorization and power hereby
given) to vote as indicated on the proposals, as more fully described in the
Proxy Statement for the meeting.
THIS PROXY IS SOLICITED BY THE FUND'S BOARD OF TRUSTEES AND WILL BE VOTED FOR
ALL PROPOSALS UNLESS OTHERWISE INDICATED.
- - - - - - - - --------------------------------------------------------------------------------
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
- - - - - - - - --------------------------------------------------------------------------------
Signature(s) should be exactly as name or names appearing on this proxy. If
shares are held jointly, each holder should sign. If signing is by attorney,
executor, administrator, trustee or guardian, please give full title.
- - - - - - - - --------------------------------------------------------------------------------
DR705
- - - - - - - - --------------------------------------------------------------------------------
If you own shares in more than one Dreyfus Fund, you will receive a separate set
of proxy materials and a separate proxy card for each Fund. THESE ARE NOT
DUPLICATES; YOU SHOULD SIGN AND RETURN EACH PROXY CARD IN ORDER FOR YOUR VOTES
TO BE COUNTED.
- - - - - - - - --------------------------------------------------------------------------------
