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THE DREYFUS/LAUREL INVESTMENT SERIES
200 PARK AVENUE
NEW YORK, NEW YORK 10166
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FEBRUARY 14, 1995
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Dear Shareholder:
The Board of Trustees of The Dreyfus/Laurel Investment Series (formerly
known as The Laurel Investment Series and also formerly known as The Boston
Company Investment Series) (the "Trust") has recently reviewed and unanimously
endorsed a proposal for the reorganization of the Trust's Dreyfus/ Laurel
International Fund (the "Fund") which it judges to be in the best interests of
the shareholders of the Fund.
Under the terms of the proposal, Dreyfus International Equity Allocation
Fund of The Dreyfus/Laurel Funds, Inc. (the "Company") would acquire all or
substantially all of the assets and assume certain liabilities of the Fund. The
Board of Trustees of the Trust has determined that the proposed reorganization
should provide benefits to shareholders due, in part, to enhanced operations.
After the transaction, the Fund would be terminated. As a shareholder of the
Fund, you would become a shareholder of the Dreyfus International Equity
Allocation Fund, having received in exchange shares with an aggregate value
equivalent to the aggregate net asset value of your investment in the Fund at
the time of the transaction. The transaction would, in the opinion of counsel,
be free from Federal income tax to you and the Fund.
The Board of Trustees has called a Special Meeting of Shareholders to be
held April 19, 1995 to consider this transaction. WE STRONGLY INVITE YOUR
PARTICIPATION BY ASKING YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY AS SOON AS
POSSIBLE.
Detailed information about the proposed transaction is described in the
enclosed proxy statement. I thank you for your participation as a shareholder
and urge you to please exercise your right to vote by completing, dating and
signing the enclosed proxy card. A self-addressed, postage-paid envelope has
been enclosed for your convenience.
If you have any questions regarding the proposed transaction, please call a
Mutual Fund Specialist at 1-800-343-6324.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED AS SOON AS
POSSIBLE.
Sincerely,
MARIE E. CONNOLLY,
PRESIDENT
The Dreyfus/Laurel Investment Series
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THE DREYFUS/LAUREL INVESTMENT SERIES
DREYFUS/LAUREL INTERNATIONAL FUND
200 PARK AVENUE
NEW YORK, NEW YORK 10166
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 19, 1995
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Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of Dreyfus/Laurel International Fund, a portfolio of The
Dreyfus/Laurel Investment Series (formerly known as The Laurel Investment Series
and also formerly known as The Boston Company Investment Series) (the "Trust"),
will be held at the office of the Trust, 200 Park Avenue, New York, New York on
April 19, 1995 at 10:00 a.m. for the following purposes:
1. To consider and act upon the Agreement and Plan of Reorganization (the
"Plan") dated as of December 20, 1994 providing for the acquisition of
all or substantially all of the assets of the Dreyfus/Laurel
International Fund of the Trust (the "Acquired Fund") by the Dreyfus
International Equity Allocation Fund of The Dreyfus/Laurel Funds, Inc.
(the "Acquiring Fund") in exchange for shares of the Acquiring Fund, and
the assumption by the Acquiring Fund of certain identified liabilities
of the Acquired Fund, and for distribution of such shares of the
Acquiring Fund to shareholders of the Acquired Fund in liquidation of
the Acquired Fund and the subsequent termination of the Acquired Fund.
2. To transact any other business which may properly come before the
Meeting or any adjournment or adjournments thereof.
The Trustees of the Trust have fixed the close of business on February 3,
1995 as the record date for the determination of shareholders of the Acquired
Fund entitled to notice of and to vote at this Meeting or any adjournment
thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND IN PERSON ARE URGED WITHOUT DELAY TO SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE, SO THAT
THEIR SHARES MAY BE REPRESENTED AT THE MEETING. YOUR PROMPT ATTENTION TO THE
ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION.
By order of the Board of Trustees
JOHN E. PELLETIER
SECRETARY
February 14, 1995
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INSTRUCTIONS FOR EXECUTING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and help you avoid the time and expense involved in validating your vote if
you fail to sign your proxy card(s) properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card(s).
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration on
the proxy card(s).
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
card(s) should be indicated unless it is reflected in the form of
registration. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
- ------------------------------------------------- ------------------------------
CORPORATE ACCOUNTS
- -------------------------------------------------
<S> <C> <C>
(1) ABC Corp. ............................ ABC Corp.
(2) ABC Corp. ............................ John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer .......... John Doe
(4) ABC Corp. Profit Sharing Plan ........ John Doe, Trustee
<CAPTION>
TRUST ACCOUNTS
- -------------------------------------------------
<S> <C> <C>
(1) ABC Trust ............................ Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d/ 12/28/78 .................. Jane B. Doe
<CAPTION>
CUSTODIAL OR ESTATE ACCOUNTS
- -------------------------------------------------
<S> <C> <C>
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA .... John B. Smith
(2) John B. Smith ........................ John B. Smith, Jr., Executor
</TABLE>
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PROSPECTUS/PROXY STATEMENT DATED FEBRUARY 14, 1995
ACQUISITION OF THE ASSETS OF
DREYFUS/LAUREL INTERNATIONAL FUND
OF
THE DREYFUS/LAUREL INVESTMENT SERIES
BY AND IN EXCHANGE FOR SHARES OF
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
OF
THE DREYFUS/LAUREL FUNDS, INC.
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-343-6324
This Prospectus/Proxy Statement is being furnished to shareholders of
Dreyfus/Laurel International Fund (the "Acquired Fund"), a portfolio of The
Dreyfus/Laurel Investment Series (the "Trust"), in connection with an Agreement
and Plan of Reorganization (the "Plan"), to be submitted to shareholders of the
Acquired Fund for consideration at a Special Meeting of Shareholders to be held
on April 19, 1995 at 10:00 a.m. Eastern Time, at the offices of the Trust, 200
Park Avenue, New York, New York, and any adjournments thereof (the "Meeting").
The Plan provides for all or substantially all of the assets of the Acquired
Fund to be acquired by the Dreyfus International Equity Allocation Fund (the
"Acquiring Fund"), a separate series of The Dreyfus/Laurel Funds, Inc. (the
"Company"), an open-end, diversified management investment company, in exchange
for shares of the Acquiring Fund and the assumption by the Acquiring Fund of
certain liabilities of the Acquired Fund (hereinafter referred to as the
"Reorganization"). This Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about the Acquiring Fund
that shareholders of the Acquired Fund should know before voting on the
Reorganization or investing in the Acquiring Fund. Certain
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/ PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR BY ANY OTHER AGENCY. ALL MUTUAL FUND
SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
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relevant documents listed below, which have been filed with the Securities and
Exchange Commission ("SEC"), are incorporated in whole or in part by reference.
A Statement of Additional Information dated February 14, 1995, relating to this
Prospectus/Proxy Statement and the Reorganization, incorporating by reference
the financial statements of the Acquiring Fund dated October 31, 1994, has been
filed with the SEC and is incorporated by reference in its entirety into this
Prospectus/Proxy Statement. A copy of such Statement of Additional Information
is available upon request and without charge by writing to the Acquiring Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11566-0144, or by calling
toll-free 1-800-343-6324.
Following the Reorganization, shares of the Acquiring Fund will be
distributed to shareholders of the Acquired Fund in liquidation of the Acquired
Fund, and the Acquired Fund will be terminated. As a result of the proposed
Reorganization, shareholders of the Acquired Fund will receive that number of
shares of the Acquiring Fund having an aggregate net asset value equal to the
aggregate net asset value of such shareholder's shares of the Acquired Fund.
Holders of shares in the Acquired Fund will receive Investor Shares of the
Acquiring Fund. The Reorganization is being structured as a tax-free
reorganization.
The Company is an open-end, diversified management investment company
comprised of separate series, one of which, the Acquiring Fund, is affected by
the Reorganization.
The Acquiring Fund's investment objective is to exceed the total return of
the Morgan Stanley Capital International -- Europe Australia Far East (MSCI
EAFE) Index Benchmark (the "Benchmark") through active stock selection, country
allocation and currency allocation. The Acquiring Fund is not an index fund and
its investments are not representative of the proportions or weightings of the
Benchmark. In addition to investing in securities in countries represented in
the Benchmark, the Acquiring Fund may invest up to 20% of its assets in
securities in emerging market countries. The Dreyfus Corporation ("Dreyfus"), a
wholly owned subsidiary of Mellon Bank, N.A. ("Mellon Bank"), serves as
investment manager to both the Acquiring Fund and the Acquired Fund.
The Prospectus of the Company describing the Acquiring Fund dated January 5,
1995 is incorporated herein in its entirety by reference and a copy is included
for your information.
The Prospectus of the Trust describing the Acquired Fund dated December 30,
1994 is incorporated herein in its entirety by reference and a copy is available
upon request and without charge by writing to the Acquired Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11566-0144, or by calling toll-free
1-800-343-6324.
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The audited financial statements of the Acquired Fund dated August 31, 1994,
and the audited financial statements of the Acquiring Fund dated October 31,
1994, are incorporated by reference into the Statement of Additional Information
dated February 14, 1995 relating to this Prospectus/Proxy Statement.
Also accompanying this Prospectus/Proxy Statement as Exhibit A is a copy of
the Plan for the proposed Reorganization.
THE FEES TO WHICH THE ACQUIRING FUND IS SUBJECT ARE SUMMARIZED IN THE
"EXPENSE SUMMARY" SECTION OF THE ACQUIRING FUND'S PROSPECTUS. THE ACQUIRING FUND
PAYS MELLON BANK OR ITS AFFILIATES TO BE INVESTMENT MANAGER. MELLON BANK OR AN
AFFILIATE MAY BE PAID FOR PERFORMING OTHER SERVICES FOR THE ACQUIRING FUND, SUCH
AS CUSTODIAN, TRANSFER AGENT OR FUND ACCOUNTANT SERVICES. THE ACQUIRING FUND IS
DISTRIBUTED BY PREMIER MUTUAL FUND SERVICES, INC.
3
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Summary................................................................... 5
Reasons for the Reorganization............................................ 10
Information About the Reorganization...................................... 11
Comparison of Investment Objectives and Policies.......................... 15
Risk Factors.............................................................. 17
Comparative Information on Shareholders' Rights........................... 20
Additional Information About The Acquired Fund and
The Acquiring Fund....................................................... 23
Other Business............................................................ 23
Voting Information........................................................ 24
Financial Statements and Experts.......................................... 26
Legal Matters............................................................. 26
Exhibit A: Agreement and Plan of Reorganization........................... A-1
</TABLE>
4
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SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE ADDITIONAL
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS/PROXY STATEMENT, THE
PROSPECTUS OF DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND DATED JANUARY 5,
1995, THE PROSPECTUS OF THE DREYFUS/LAUREL INTERNATIONAL FUND DATED DECEMBER 30,
1994, AND THE PLAN, A COPY OF WHICH IS ATTACHED TO THIS PROSPECTUS/PROXY
STATEMENT AS EXHIBIT A.
PROPOSED REORGANIZATION
The Plan provides for the transfer of all or substantially all of the assets
of the Acquired Fund (the Dreyfus/Laurel International Fund) in exchange for
shares of the Acquiring Fund (Dreyfus International Equity Allocation Fund) and
the assumption by the Acquiring Fund of certain liabilities of the Acquired
Fund. The Plan also calls for the distribution of shares of the Acquiring Fund
to the Acquired Fund shareholders in liquidation of the Acquired Fund. (The
transaction is referred to in this Prospectus/Proxy Statement as the
"Reorganization"). As a result of the Reorganization, each shareholder of the
Acquired Fund will become the owner of that number of full and fractional shares
of the Acquiring Fund having an aggregate net asset value equal to the aggregate
net asset value of the shareholder's shares of the Acquired Fund as of the close
of business on the date that the Acquired Fund's assets are exchanged for shares
of the Acquiring Fund. Shareholders of the Acquired Fund will receive Investor
Shares of the Acquiring Fund. See "Information About the Reorganization."
For the reasons set forth below under "Reasons for the Reorganization," the
Board of Trustees of the Trust, including the Trustees who are not "interested
persons," as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), have unanimously concluded that the Reorganization
would be in the best interests of the shareholders of the Acquired Fund and that
the interests of the Acquired Fund's existing shareholders would not be diluted
as a result of the transaction contemplated by the Reorganization, and therefore
has submitted the Plan for the approval of the Acquired Fund's shareholders.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS APPROVAL OF THE PLAN EFFECTING
THE REORGANIZATION. THE BOARD OF DIRECTORS OF THE COMPANY HAS ALSO APPROVED THE
REORGANIZATION.
Approval of the Reorganization on the part of the Acquired Fund will require
the affirmative vote of the lesser of: (i) 67% of the voting securities of the
Acquired Fund present at the Meeting, if the holders of more than 50% of the
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outstanding voting securities of the Acquired Fund are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of the
Acquired Fund. See "Voting Information."
If the shareholders of the Acquired Fund do not vote to approve the
Reorganization, the Trustees of the Trust will continue the management of the
Acquired Fund and will consider other alternatives in the best interests of the
shareholders, including liquidation of the Acquired Fund.
TAX CONSEQUENCES
Prior to or at the completion of the Reorganization, the Trust will have
received from counsel an opinion that no gain or loss will be recognized to the
Acquired Fund or its shareholders for Federal income tax purposes (except,
possibly, with respect to certain hedging instruments held by the Acquired Fund)
pursuant to the Reorganization. The holding period and aggregate tax basis of
shares of the Acquiring Fund that are received by each Acquired Fund shareholder
will be the same as the holding period and aggregate tax basis of shares of the
Acquired Fund previously held by such shareholder. In addition, the holding
period and tax basis of the assets of the Acquired Fund (other than the hedging
instruments mentioned above) in the Acquiring Fund's hands as a result of the
Reorganization will be the same as in the Acquired Fund's hands immediately
prior to the Reorganization.
INVESTOR SHARES OF ACQUIRING FUND AND ACQUIRED FUND
Investor Shares of the Acquiring Fund and the Acquired Fund are all sold
primarily to retail investors by banks, securities brokers or dealers and other
financial institutions (including Mellon Bank and its affiliates) ("Agents")
that have entered into a Shareholder Servicing and Sales Support Agreement with
Premier Mutual Fund Services, Inc. ("Premier"), the distributor of both Funds.
All shares of the Acquiring Fund and Acquired Fund are sold without an
initial sales charge. Shares of the Acquired Fund and Investor Shares of the
Acquiring Fund are sold subject to their respective distribution plans adopted
pursuant to Rule 12b-1 under the 1940 Act. The plans allow the Acquired Fund and
the Acquiring Fund, respectively, to spend annually up to 0.25% of the value of
average daily net assets attributable to the Acquired Fund (or to Investor
Shares in the case of the Acquiring Fund), to compensate Dreyfus Service
Corporation, an affiliate of Dreyfus, for shareholder servicing activities and
Premier for shareholder servicing activities and for activities or expenses
primarily intended to result in the sale of shares of the Acquired Fund (or
Investor Shares in the case of the Acquiring Fund).
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The Acquiring Fund seeks to exceed the total return of the Benchmark through
active stock selection, country allocation and currency allocation. The
6
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Acquiring Fund is not an index fund and its investments are not representative
of the proportions or weightings of the Benchmark. In addition to investing in
securities in countries represented in the Benchmark, the Acquiring Fund may
invest up to 20% of its assets in securities in emerging market countries.
Under normal circumstances, the Acquiring Fund expects to be fully invested
in securities of issuers in countries included in the Benchmark, securities of
emerging market countries, and derivative securities, except for such amounts as
are needed to meet short-term cash needs and redemptions and amounts pending
investment.
The Acquired Fund is a diversified equity fund seeking long-term growth in
capital by investing in companies located outside of the United States. Current
income from dividends, interest and other sources is a secondary objective. The
Acquired Fund seeks to achieve its investment objectives through investments in
common stocks and securities convertible into common stock of companies located
outside the United States.
Although the respective investment objectives and policies of the Acquiring
Fund and the Acquired Fund are similar in their concentration in foreign equity
securities, shareholders of the Acquired Fund should consider certain
differences in such objectives and policies. See "Comparison of Investment
Objectives and Policies."
MANAGEMENT AND OTHER SERVICE PROVIDERS
The business affairs of the Trust are managed by its Board of Trustees, and
the business affairs of the Company are managed by its Board of Directors. The
same individuals comprise both the Board of Trustees of the Trust and the Board
of Directors of the Company.
Dreyfus serves as the investment manager for both the Acquiring Fund and the
Acquired Fund. S.A.M. Finance, S.A. ("CCF SAM") 115 Avenue des Champs-Elysees,
Paris, France 75008, serves as the investment sub-adviser to the Acquiring Fund,
pursuant to a Sub-Advisory Agreement among the Company, CCF SAM and Mellon Bank,
transferred to Dreyfus effective as of October 17, 1994.
Mellon Bank serves as the custodian and fund accountant for both the
Acquired Fund and the Acquiring Fund.
Premier acts as distributor and serves as subadministrator for both the
Acquired Fund and the Acquiring Fund.
The Shareholder Services Group, Inc. is the transfer agent for the Acquired
Fund and the Acquiring Fund.
7
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FEES AND EXPENSES
Each of the Acquiring Fund and the Acquired Fund currently pays its
investment manager a fee computed daily, and payable monthly, at the annual rate
of 1.50% of the value of its average daily net assets less certain expenses. The
investment manager will provide, or arrange and pay for one or more third
parties to provide, administrative, custody, transfer agency, fund accounting,
securities registration, legal and audit services to the Acquiring Fund and the
Acquired Fund. Pursuant to the sub-advisory agreement, CCF SAM receives 0.25% of
the Acquiring Fund's average daily net assets. Payment of the fee is the
obligation of Dreyfus and not of the Acquiring Fund. In addition, the Acquired
Fund and the Investor Shares of the Acquiring Fund are both sold subject to fees
under their respective distribution plans adopted pursuant to Rule 12b-1 under
the 1940 Act at an annual rate of up to 0.25% of average daily net assets. See
"Purchase and Redemption Procedures."
Prior to April 4, 1994, the Acquired Fund operated pursuant to a predecessor
investment management agreement under which it paid a fee to its investment
manager at an annual rate of 0.95% of its average daily net assets, and the
Acquired Fund arranged and separately paid for administrative, custody, transfer
agency, fund accounting, securities registration, legal and audit services. The
expense ratios of the Investor Shares of the Acquired Fund for the year ended
August 31, 1994, were 4.21% before voluntary waivers and reimbursements and
1.84% after voluntary waivers and reimbursements. The annualized expense ratio
for the Acquiring Fund for the period ended October 31, 1994 was 1.75%, the
Investor Shares of the Acquiring Fund having commenced sales on August 12, 1994.
As of the date of this Prospectus/Proxy Statement, both the Acquiring Fund and
the Acquired Fund operate under investment management agreements in the form
described in the preceding paragraph and the anticipated annual expense ratios
for both the shares of the Acquired Fund and the Investor Shares of the
Acquiring Fund will be 1.75%.
EXCHANGE PRIVILEGES
Shareholders of both the Acquiring Fund and the Acquired Fund may exchange
shares for shares of the same class of certain other funds that are advised by
Dreyfus and that were previously advised by Mellon Bank. As part of the
Reorganization, each shareholder of the Acquired Fund who becomes the owner of
Investor Shares of the Acquiring Fund will be entitled to the exchange
privileges offered by that class of shares. Any exchange entered into pursuant
to the exchange privilege will be a taxable event for which a shareholder may
have to recognize a gain or loss under Federal income tax provisions. The shares
being exchanged and the shares of each fund being acquired must have a current
value of at least $100 and otherwise meet the minimum investment requirement of
the fund being acquired. The Acquiring Fund reserves the right
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to amend or terminate the exchange privilege; shareholders will be provided 60
days' notice of any material amendment to or the termination of the exchange
privilege. For further information see "How to Exchange Your Investment From One
Fund To Another" in the accompanying Prospectus of the Acquiring Fund.
DIVIDENDS
The policies of each Fund with regard to dividends and distributions are
similar. The Acquired Fund's policy is to declare and pay dividends from net
investment income semi-annually and distribute net long term gains, if any, once
a year, normally at the end of the year in which earned or at the beginning of
the next year. The Acquiring Fund's policy is to declare and pay the dividends
from net investment income, if any, annually and distribute any net long-term
gains once a year, normally at the end of the year in which earned or at the
beginning of the next year. Unless a shareholder instructs that dividends and
capital gain distributions be paid in cash, dividends and capital gain
distributions will be reinvested automatically in additional shares of the Fund
at net asset value. Shareholders of the Acquired Fund that have elected to
receive dividends and other distributions in cash will continue to receive
distributions in such manner from the Acquiring Fund. Subsequent to the
Reorganization, former shareholders of the Acquired Fund receiving dividends or
other distributions in cash may elect at any time to have their dividends and
other distributions reinvested automatically in additional shares of the
Acquiring Fund by writing the Company. See "Distributions" in the accompanying
Prospectus of the Acquiring Fund.
CLASS R SHARES OF THE ACQUIRING FUND
In addition to Investor Shares, the Acquiring Fund offers Class R Shares,
which are sold primarily to bank trust departments and other financial service
providers (including Mellon Bank and its affiliates) acting on behalf of
customers having a qualified trust or investment account or relationship at such
institution. Class R Shares are not subject to plans adopted pursuant to Rule
12b-1 under the 1940 Act and their performance does not reflect payment of any
fee associated with such a plan. Shareholders of the Acquired Fund will not
receive Class R shares as part of the Reorganization. The annualized expense
ratio for Class R Shares of the Acquiring Fund for the period ended October 31,
1994 was 1.50%. For further information with respect to Class R shares of the
Acquiring Fund, see the accompanying Prospectus of the Acquiring Fund.
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REASONS FOR THE REORGANIZATION
The Board of Trustees of the Trust has determined that it is advantageous to
combine the Acquired Fund with the Acquiring Fund. The Funds proposed to be
combined have substantially similar investment objectives, restrictions and
policies, and the same adviser, administrator, custodian, and distributor.
The Board of Trustees of the Trust has determined that the Reorganization
should provide certain benefits to shareholders. In making such determination,
the Board of Trustees considered, among other things, the benefit to the
Acquired Fund of consolidations which would promote more efficient operations
through the elimination of duplication of services and the greater portfolio
diversification and more efficient portfolio management resulting from a larger
asset base (including the possibility of reduced commissions or more favorable
pricing based on larger portfolio transactions), the comparative investment
performance of the Funds and the advantages of eliminating duplication inherent
in marketing funds with similar investment objectives, hopefully leading to
increased growth of the combined Acquiring Fund following the Reorganization.
The Board of Trustees of the Trust also believes that the access of the
Acquiring Fund to the international investment expertise of CCF SAM as sub-
adviser may prove beneficial in terms of improved operating results for the
combined Acquiring Fund following the Reorganization. A wholly owned subsidiary
of Credit Commercial de France ("CCF"), CCF SAM is a French corporation
organized in 1989, and has been a registered investment adviser since February,
1993. CCF was founded over a century ago in 1894, and is one of Europe's largest
commercial banks with 370 offices in France as well as 40 others around the
world of which 10 are located in European countries. CCF's European investment
management business dates back to 1945 and it currently manages over $30 billion
divided between 210 open-end mutual funds and over 100 commingled investment
portfolios out of offices in Paris, London, Geneva, Milan and Tokyo. CCF SAM
specializes in active quantitative asset management based on a structured
investment process. CCF SAM's offices are located in Paris, France and it
currently advises $2 billion in assets worldwide.
In light of the foregoing, the Board of Trustees of the Trust, including the
non-interested Trustees, has decided that it is in the best interests of the
Acquired Fund and its shareholders to combine with the Acquiring Fund. The Board
of Trustees of the Trust has also determined that a combination of the Acquired
Fund and the Acquiring Fund would not result in a dilution of the Acquired
Fund's shareholders' interests.
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INFORMATION ABOUT THE REORGANIZATION
PLAN OF REORGANIZATION
The following summary of the Plan is qualified in its entirety by reference
to the Plan (Exhibit A hereto). The Plan provides that the Acquiring Fund will
acquire all or substantially all of the assets of the Acquired Fund in exchange
for shares of the Acquiring Fund and the assumption by the Acquiring Fund of
certain liabilities of the Acquired Fund on May 1, 1995 or such later date as
may be agreed upon by the parties (the "Closing Date"). Prior to the Closing
Date, the Acquired Fund will endeavor to discharge all of its known liabilities
and obligations. The Acquiring Fund will not assume any liabilities or
obligations of the Acquired Fund other than those reflected in an unaudited
statement of assets and liabilities of the Acquired Fund prepared as of the
close of regular trading on the New York Stock Exchange, Inc. (the "NYSE"),
currently 4:00 pm. Eastern Time (4:15 p.m. in the case of index trading), on the
business day immediately preceding the Closing Date (the "Valuation Date"). The
number of full and fractional common shares of the Acquiring Fund to be issued
to the Acquired Fund's shareholders will be determined on the basis of the
relative net asset values per share of the Acquiring Fund's Investor Shares and
the Acquired Fund's shares, computed as of the close of regular trading on the
NYSE on the Valuation Date. The net asset value per share of each class will be
determined by dividing assets, less liabilities, by the total number of
outstanding shares.
Both the Acquired Fund and the Acquiring Fund will utilize Mellon Bank as
agent to determine the value of their respective portfolio securities. The
method of valuation employed will be consistent with the requirements set forth
in the Prospectus of each Fund, Rule 22c-1 under the 1940 Act, and with the
interpretation of such rule by the SEC's Division of Investment Management.
At or prior to the Closing Date, the Acquired Fund shall have declared a
dividend and/or other distribution that, together with all previous dividends
and other distributions, shall have the effect of distributing to the Acquired
Fund's shareholders all taxable income for all taxable years ending on or prior
to the Closing Date (computed without regard to any deduction for dividends
paid) and all of its net capital gain realized in all such taxable years (after
reduction for any capital loss carryforward).
As soon after the Closing Date as conveniently practicable, the Acquired
Fund will liquidate and distribute pro rata to shareholders of record as of the
close of business on the Closing Date the full and fractional shares of the
Acquiring Fund received by the Acquired Fund. Such liquidation and distribution
will be accomplished by the establishment of accounts in the names of the
Acquired Fund's shareholders on the share records of the Acquiring Fund's
transfer agent. Each account will represent the respective pro rata number of
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full and fractional shares of the Acquiring Fund due to such shareholders of the
Acquired Fund. After such distribution and the winding up of its affairs, the
Acquired Fund will be terminated.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including the condition that the parties to the
Reorganization shall have received exemptive relief from the SEC with respect to
the prohibitions of Section 17 under the 1940 Act. Notwithstanding approval of
the Acquired Fund's shareholders, the Plan may be terminated at any time: (a) at
or prior to the Valuation Date by either party because its governing board
reasonably determines that circumstances have developed which make proceeding
with the Reorganization undesirable; or (b) at or prior to the Closing Date by
either party (i) because of a material breach by the other party of any
representation, warranty, or agreement contained therein, or (ii) because a
condition to the obligation of the terminating party cannot be met.
The expenses of the Reorganization (including the cost of any proxy
soliciting agents), will be borne by Dreyfus. No portion of such expenses shall
be paid by the Acquired Fund or the Acquiring Fund.
If the Reorganization is not approved by shareholders of the Acquired Fund,
the Board of Trustees of the Trust will consider other possible courses of
action, including liquidation of the Acquired Fund.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS APPROVAL OF THE
PLAN.
DESCRIPTION OF SHARES OF THE ACQUIRING FUND AND THE ACQUIRED FUND
Full and fractional Investor Shares of common stock of the Acquiring Fund
will be issued for the shares of the Acquired Fund in accordance with the
procedures detailed in the Plan. All issued and outstanding shares of the
Acquired Fund, including those represented by certificates, will be canceled.
Generally, the Acquiring Fund does not issue share certificates to shareholders
unless a specific request is submitted to the Acquiring Fund's transfer agent.
The shares of the Acquiring Fund to be issued will have no pre-emptive or
conversion rights.
FEDERAL INCOME TAX CONSEQUENCES
The exchange of the Acquired Fund's assets for shares of the Acquiring Fund
and the Acquiring Fund's assumption of certain liabilities of the Acquired Fund
is intended to qualify for Federal income tax purposes as a tax-free
reorganization under Section 368(a)(1)(C) of the Internal Revenue Code of 1986,
as amended (the "Code"). As a condition to the closing of the Reorganization,
the Trust on behalf of the Acquired Fund will receive an opinion from
Kirkpatrick & Lockhart substantially to the effect that, on the basis of the
existing
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provisions of the Code, U.S. Treasury regulations issued thereunder, current
administrative rules and pronouncements and court decisions, for Federal income
tax purposes:
(1) The transfer of all or substantially all of the Acquired Fund's assets
solely in exchange for Investor Shares of the Acquiring Fund and the
assumption by the Acquiring Fund of certain liabilities of the Acquired
Fund, and the distribution of such shares to the shareholders of the
Acquired Fund, will constitute a "reorganization" within the meaning of
section 368(a)(1)(C) of the Code, and the Company and the Trust are each
a "party to a reorganization" within the meaning of section 368(b) of
the Code;
(2) No gain or loss will be recognized to the Acquired Fund on the transfer
of its assets to the Acquiring Fund (except, possibly, with respect to
certain options, futures and forward contracts included in those assets
("Contracts")) solely in exchange for Investor Shares of the Acquiring
Fund and the assumption by the Acquiring Fund of the Acquired Fund's
liabilities or upon the distribution (whether actual or constructive) of
those shares to the Acquired Fund's shareholders in exchange for their
shares of the Acquired Fund;
(3) The tax basis of the transferred assets (with the possible exception of
the Contracts) will be the same to the Acquiring Fund as the tax basis
of those assets to the Acquired Fund immediately prior to the
Reorganization, and the holding period of those assets (with the
possible exception of the Contracts) in the hands of the Acquiring Fund
will include the period during which the assets were held by the
Acquired Fund;
(4) No gain or loss will be recognized to the Acquiring Fund upon the
receipt of the assets from the Acquired Fund solely in exchange for the
Investor Shares of the Acquiring Fund and the assumption by the
Acquiring Fund of the Acquired Fund's liabilities;
(5) No gain or loss will be recognized to the Acquired Fund's shareholders
upon the issuance to them of the Investor Shares of the Acquiring Fund,
provided they receive solely such Investor Shares (including fractional
shares) in exchange for their shares of the Acquired Fund; and
(6) The aggregate tax basis of the Investor Shares of the Acquiring Fund
(including any fractional shares) received by each of the Acquired
Fund's shareholders pursuant to the Reorganization will be the same as
the aggregate tax basis of the Acquired Fund's shares held by that
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shareholder immediately prior to the Reorganization, and that
shareholder's holding period for those Investor Shares will include the
period during which the Acquired Fund's shares exchanged therefor were
held by that shareholder (provided those shares were held as capital
assets on the date of the Reorganization).
Shareholders of the Acquired Fund should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light of their
individual circumstances. Because the foregoing discussion only relates to the
Federal income tax consequences of the Reorganization, those shareholders also
should consult their tax advisers as to state and local tax consequences, if
any, of the Reorganization.
CAPITALIZATION
The following table shows the capitalization of the Acquiring Fund and the
Acquired Fund as of October 31, 1994, and on a pro forma basis as of that date,
giving effect to the proposed acquisition of assets at net asset value:
<TABLE>
<CAPTION>
ACQUIRED ACQUIRING INVESTOR CLASS
FUND FUND PRO FORMA
INVESTOR INVESTOR FOR
CLASS CLASS REORGANIZATION
---------- ----------- --------------
<S> <C> <C> <C>
Net Assets........................... $5,493,683 $ 70,750 $ 5,564,433
Net Asset Value per share............ $ 13.78 $ 10.06 $ 10.06
Shares outstanding................... 398,655 7,035 553,127
</TABLE>
<TABLE>
<CAPTION>
CLASS R
ACQUIRED ACQUIRING PRO FORMA
FUND FUND FOR
CLASS R CLASS R REORGANIZATION
---------- ----------- --------------
<S> <C> <C> <C>
Net Assets........................... $ 0 $11,844,007 $ 11,844,007
Net Asset Value per share............ $ 0 $ 10.06 $ 10.06
Shares outstanding................... 0 1,177,712 1,177,712
</TABLE>
As of February 3, 1995 (the "Record Date"), there were 415,669.839 shares of
the Acquired Fund outstanding, of which 38,657.331 shares, or approximately 9.3%
were beneficially owned by Mellon Bank and its affiliates.
As of the Record Date, the officers and Trustees of the Trust beneficially
owned as a group less than 1% of the outstanding shares of the Acquired Fund. To
the best knowledge of the Trustees of the Trust, as of the Record Date, no other
shareholder or "group" (as that term is used in Section 13(d) of the Securities
Exchange Act of 1934, the "Exchange Act") beneficially owned more than 5% of the
Acquired Fund.
As of January 31, 1995, there were outstanding approximately 1,392,362 Class
R shares and 9,496 Investor Class shares of the Acquiring Fund, of which
approximately 1,387,170 Class R shares and 103 Investor
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Class shares were beneficially owned by Mellon Bank and its affiliates,
comprising approximately 99% of the combined voting power of Investor and Class
R shares of the Acquiring Fund.
As of January 31, 1995, the officers and Directors of the Company
beneficially owned as a group less than 1% of the outstanding shares of the
Acquiring Fund. To the best knowledge of the Directors of the Company, as of
January 31, 1995, no other shareholder or "group" (as that term is used in
Section 13(d) of the Exchange Act) beneficially owned more than 5% of the
Acquiring Fund.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing investment objectives, policies and
restrictions of the Acquiring Fund and the Acquired Fund is based upon and
qualified in its entirety by the respective investment objectives, policies and
restrictions sections of the Prospectuses of the Acquiring Fund and the Acquired
Fund. For a full discussion of the investment objectives, policies and
restrictions of the Acquiring Fund, refer to the Prospectus of the Dreyfus
International Equity Allocation Fund (which accompanies this Prospectus/Proxy
Statement) under the caption "Investment Objective and Policies." For a
discussion of these issues as they apply to the Acquired Fund, refer to the
Prospectus of The Dreyfus/Laurel International Fund (available upon request)
under the caption "Investment Objective and Policies."
INVESTMENT OBJECTIVE
The investment objective of the Acquiring Fund of the Company is to exceed
the total return of the Benchmark through active stock selection, country
allocation and currency allocation. The Acquired Fund is a diversified equity
fund seeking long-term growth in capital by investing in companies located
outside of the United States. Current income from dividends, interest and other
sources is a secondary objective. The Acquired Fund seeks to achieve its
investment objectives through investments in common stocks and securities
convertible into common stock of companies located outside the United States.
There can be no assurance that either the Acquiring Fund or the Acquired Fund
will meet its investment objective.
Although the language used by the Acquiring Fund and the Acquired Fund to
define its respective investment objective is different, the investment
objectives of the Funds are similar in that their emphasis is on investment in
foreign equity securities. The investment objectives of both the Acquiring Fund
and the Acquired Fund are considered non-fundamental policies and may be changed
with approval by the Board of Directors/Trustees. In addition, the policies
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described below in this "Comparison of Investment Objectives and Policies"
section can also be changed without shareholder approval, except as described in
a fundamental policy.
PRIMARY INVESTMENTS
THE ACQUIRING FUND is not an index fund and its investments are not
representative of the proportions or weightings of the Benchmark. In addition to
investing in securities in countries represented in the Benchmark, the Acquiring
Fund may invest up to 20% of its assets in securities in emerging market
countries. Under normal circumstances the Acquiring Fund will invest at least
65% of its assets in equity securities of issuers in at least three countries
outside of the United States.
The Benchmark is a diversified, capitalization-weighted index of equity
securities of companies located in Australia and 13 countries of Europe and 5
countries of the Far East. The countries represented in the Benchmark are:
Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong,
Italy, Japan, the Netherlands, New Zealand, Norway, Singapore/Malaysia, Spain,
Sweden, Switzerland, and the United Kingdom. The Acquiring Fund may also invest
in securities of other countries added to the Benchmark from time to time.
Stocks in the Benchmark are selected to represent proportionally each country
and each major industrial sector within each country. Each stock in the
Benchmark is weighted according to its market value as a percentage of the total
market value of all stock in the Benchmark.
The investment process utilized by the Acquiring Fund's advisors in
structuring the Fund has four basic components: (1) country allocation, (2)
stock selection; (3) currency allocation and (4) portfolio construction and risk
control.
Under normal circumstances, the Acquiring Fund expects to be fully invested
in securities of issuers in countries included in the Benchmark, securities of
emerging market countries, and derivative securities, except for such amounts as
are needed to meet short-term cash needs and redemptions and amounts pending
investment. These amounts may be held as cash or temporarily invested in high
quality short-term debt instruments of the U.S. or foreign governments, their
agencies and instrumentalities and repurchase agreements. No more than 20% of
the total assets of the Acquiring Fund will be invested in the securities of
emerging market countries, including Argentina, Brazil, Chile, People's Republic
of China, Colombia, Czech Republic, Greece, Korea, Hungary, India, Indonesia,
Israel, Jordan, Mexico, Pakistan, Peru, Philippines, Poland, Portugal, Sri
Lanka, Taiwan, Thailand, Turkey, and Venezuela, subject to the satisfaction of
regulatory standards for the custody of assets and securities clearance systems.
The Acquiring Fund may also invest in securities of other emerging markets added
to the Benchmark from time to time. Each
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emerging market country is analyzed from a macroeconomic and financial
perspective giving equal consideration to four factors: (1) the relative and
historical market valuation, (2) the currency risk, (3) the outlook for economic
growth, and (4) the country political risk.
The Acquiring Fund may invest in forward foreign currency exchange
contracts, futures contracts, options on securities and on foreign currencies,
currency indices, futures contracts, and securities indices to adjust its risk
exposure relative to the Benchmark and to its investment in emerging countries.
THE ACQUIRED FUND places major emphasis on countries that are considered to
have above average potential for long-term economic growth. In general, the
Acquired Fund's investments are expected to be broadly diversified over a number
of countries including, but not limited to, Australia, Canada, France, Germany,
Hong Kong, Italy, Japan, the Netherlands, Singapore/Malaysia, Spain, Sweden,
Switzerland, and the United Kingdom. Within countries, equity investments are
expected to be broadly diversified to spread risk and to provide representation
of the growth potential of the country. Selection of securities is designed to
include participation in economic and industrial sectors which are important to
the growth of the country. Within countries, the Acquired Fund invests primarily
in major established companies which are listed and traded on principal
exchanges. The Acquired Fund will not invest more than 35% of its total assets
in any one country.
The Acquired Fund may engage in currency exchange transactions in order to
protect against uncertainty in the level of future exchange rates on securities
denominated in foreign currencies.
RISK FACTORS
Due to the similarities of investment objectives and policies of the
Acquiring Fund and Acquired Fund, the investment risks are also generally
similar. Such risks, and certain differences in the risks associated with
investing in the Acquiring Fund or Acquired Fund, are discussed under the
caption "Other Investment Policies and Risk Factors" in the Prospectus of the
Acquiring Fund enclosed with this Prospectus/Proxy Statement and under the
caption "Other Investment Policies" in the prospectus of the Acquired Fund
(available upon request).
CURRENCY EXCHANGE TRANSACTIONS
The Acquiring Fund may engage in currency exchange transactions. Generally,
the Acquiring Fund's foreign currency exchange transactions will be conducted on
a spot basis at the spot rate then prevailing for purchasing or selling
currencies in the foreign exchange market. The Acquiring Fund may, to a limited
extent, deal in forward foreign currency exchange contracts involving
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currencies of the different countries in which it will invest as a hedge against
possible variations in the foreign exchange rates between these currencies. This
is accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date (up to one year) and price set at the time
of the contract. The Acquiring Fund's dealings in forward foreign currency
exchange contracts are limited to hedging involving either specific transactions
or portfolio positions. Transaction hedging is the purchase or sale of forward
foreign currency exchange contracts with respect to specific receivables
(including dividends) or payables of the Acquiring Fund accruing in connection
with the ownership, purchase and sale of its portfolio securities and the sale
and redemption of shares of the Acquiring Fund. Position hedging is the sale of
forward foreign currency exchange contracts with respect to portfolio security
positions denominated or quoted in such foreign currency. The Acquiring Fund
will not enter into or maintain a position in such contracts if their
consummation would obligate the Acquiring Fund to deliver an amount of foreign
currency greater than the value of the Acquiring Fund's assets denominated or
quoted in, or currency convertible into, such currency.
Forward contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific security or securities index
or currency at a specified future time and at a specified price. Forward
contracts differ from futures contracts as the terms of the contract are not
standardized and forward contracts are not traded on regulated exchanges.
Transactions are executed over the counter. If the counterparty defaults, the
Acquiring Fund might incur a loss. The Acquiring Fund's advisors seek to
minimize the risk of loss through forward contracts by analyzing the
creditworthiness of the counterparty under forward contact agreements.
The Acquiring Fund's use of forward contracts will be restricted to the
purchase or sale of foreign currency. The Acquiring Fund will selectively employ
currency forward contracts in order to hedge currency risk associated with
investments in foreign equity securities.
FOREIGN SECURITIES
The Acquiring Fund will purchase securities of foreign issuers and may
invest in obligations of foreign branches of domestic banks and domestic
branches of foreign banks. Investment in foreign securities presents certain
risks, including those resulting from fluctuations in currency exchange rates,
revaluation of currencies, future political and economic developments and the
possible imposition of currency exchange blockages or other foreign governmental
laws or restrictions, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
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practices and requirements comparable to those applicable to domestic issuers.
Moreover, securities of many foreign issuers may be less liquid and their prices
more volatile than those of comparable domestic issuers. The net asset value of
the Acquiring Fund's shares generally will fluctuate. In addition, with respect
to certain foreign countries, there is the possibility of expropriation,
confiscatory taxation and limitations on the use or removal of funds or other
assets of the Acquiring Fund, including withholding of dividends. Foreign
securities may be subject to foreign government taxes that would reduce the
yield on such securities.
Among the foreign securities in which the Acquiring Fund may invest are
those issued by companies located in developing countries, which are countries
in the initial stages of their industrialization cycles. Investing in the equity
and debt markets of developing countries involves exposure to economic
structures that are generally less diverse and less mature, and to political
systems that can be expected to have less stability, than those of developed
countries. The markets of developing countries historically have been more
volatile than the markets of the more mature economies of developed countries,
but often have provided higher rates of return to investors.
FUTURES, OPTIONS AND DERIVATIVES
The Acquiring Fund may attempt to reduce the overall level of investment
risk of particular securities and attempt to protect against adverse market
movements by investing in futures, options and other derivative instruments.
This includes the purchase and writing of options on securities (including index
options) and options on foreign currencies and investing in futures contracts
for the purchase or sale of instruments based on financial indices, including
interest rate indices or indices of U.S. or foreign governments, equity or fixed
income securities ("futures contracts"), options on futures contracts, and
forward contracts and swaps and swap-related products such as equity swap
contracts, interest rate swaps, currency swaps, caps, collars and floors.
The use of futures, option, forward contracts and swaps exposes the
Acquiring Fund to additional investment risks and transaction costs. If Dreyfus
or CCF S.A.M. incorrectly analyzes market conditions or does not employ the
appropriate strategy with respect to these instruments, the Acquiring Fund could
be left in a less favorable position. Additional risks inherent in the use of
futures, options, forward contracts and swaps include: imperfect correlation
between the price of futures, options and forward contracts and movements in the
prices of the securities or currencies being hedged; the possible absence of a
liquid secondary market for any particular instrument at any time; and the
possible need to defer closing out certain hedged positions to avoid adverse tax
consequences. The Acquiring Fund may not purchase put and call options that are
traded on a national stock exchange in an amount exceeding 5% of its net
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assets. Further information on the use of futures, options and other derivative
instruments, and the associated risks, is contained in the Statement of
Additional Information of the Acquiring Fund.
The Acquiring Fund may purchase and write call and put options on foreign
currencies for the purpose of hedging against changes in future currency
exchange rates. Call options convey the right to buy the underlying currency at
a predetermined price which may 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 may be higher than the spot price of the currency at
the time the option expires. Currency options traded on U.S. or other exchanges
may be subject to position limits which may limit the ability of the Acquiring
Fund to reduce foreign currency risk using such options. Further, there may be
an imperfect correlation between the change in a spot price of a foreign
currency and the prices of futures and option contracts. Over-the-counter
options differ from exchange-traded options in that they are two-party contracts
with price and other terms negotiated between buyer and seller and generally do
not have as much market liquidity as exchange-traded options.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
FORM OF ORGANIZATION
The Trust and the Company are open-end management investment companies
registered with the SEC under the 1940 Act which continuously offer to sell
shares at their current net asset value. The Trust is organized as a
Massachusetts business trust and is governed by a Master Trust Agreement,
By-Laws, Board of Trustees, and applicable Massachusetts law. The Company is
organized as a Maryland corporation and is governed by its Articles of
Incorporation, By-Laws, Board of Directors and the Maryland General Corporation
Law. Both the Trust and the Company are also governed by applicable state and
Federal law. Certain differences and similarities between the Company and the
Trust are summarized below.
CAPITALIZATION
The beneficial interest in the Acquired Fund is represented by transferable
shares, $.001 par value per share. The Trust permits the Trustees to issue an
unlimited number of shares of beneficial interest and to allocate such shares
into an unlimited number of series with rights determined by the Trustees, all
without shareholder approval. Fractional shares may be issued. The Acquired
Fund's shares have equal voting rights and represent equal proportionate
interests in the assets belonging to the Fund, and are entitled to receive
dividends and other amounts as determined by its Trustees.
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The Acquiring Fund has issued transferable common stock, par value $.001 per
share. The Company's Articles of Incorporation authorize the issuance of 25
billion shares with equal voting rights, and permit the Directors to create an
unlimited number of investment portfolios, each of which issues a separate
series of shares. Fractional shares may be issued. Shareholders of the Fund are
entitled to receive pro rata dividends declared by its Board of Directors and
distributions upon liquidation.
SHAREHOLDER LIABILITY
ACQUIRED FUND: Under Massachusetts law, shareholders of a portfolio or
series could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Master Trust Agreement of the Trust
disclaims shareholder liability for acts or obligations of the portfolio or
series and require that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or the Trustees.
The Master Trust Agreement provides for indemnification out of the portfolio's
or series' property for all losses and expenses of any shareholder held
personally liable for the obligations of the portfolio or series. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
considered remote since it is limited to circumstances in which a disclaimer is
inoperative and the portfolio or series itself would be unable to meet its
obligations. A substantial number of mutual funds in the United States are
organized as Massachusetts business trusts.
ACQUIRING FUND: Under Maryland Law, shareholders have no personal liability
as such for a corporation's acts or obligations.
SHAREHOLDER MEETINGS AND VOTING RIGHTS
ACQUIRED FUND AND ACQUIRING FUND: Neither the Trust nor the Company is
required to hold annual meetings of its shareholders, but each is required to
call a meeting of shareholders for the purpose of voting upon the question of
removal of a Trustee or Director, as the case may be, when requested in writing
to do so by the holders of at least 10% of their respective outstanding shares.
In addition, each of the Trust and the Company is required to call a meeting of
shareholders for the purpose of electing Trustees or Directors, if, at any time,
less than a majority of the Trustees or Directors then holding office were
elected by shareholders. Neither the Trust nor the Company currently intends to
hold regular shareholder meetings. Neither the Trust nor the Company permits
cumulative voting. The Company is generally required to call a special meeting
of shareholders for any proper purpose when requested to do so in writing by the
holders of no less than 25% of the shares entitled to vote on matters at such
meeting. In the case of the Trust, a majority of shares entitled to vote on a
matter constitutes a quorum for consideration of such matter; in the case of the
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Company, a quorum is one-third of the shares entitled to vote on a matter. In
either case, a majority of the shares voting is sufficient to act on a matter
(unless otherwise specifically required by the applicable governing documents or
other law, including the 1940 Act).
LIQUIDATION OR DISSOLUTION
ACQUIRED FUND AND ACQUIRING FUND: In the event of the liquidation of the
Acquired Fund or Acquiring Fund or a class thereof, the shareholders of the Fund
or class are entitled to receive, when, and as declared by the Trustees/
Directors, the excess of the assets belonging to the Fund or attributable to the
class over the liabilities belonging to the Fund or attributable to the class.
In either case, the assets so distributable to shareholders of the Fund will be
distributed among the shareholders in proportion to the number of shares of the
Fund held by them and recorded on the books of the Acquired Fund or the
Acquiring Fund.
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND TRUSTEES
ACQUIRED FUND AND ACQUIRING FUND: The Master Trust Agreement provides that
no Trustee, officer or agent of the Trust shall be personally liable to any
person for any action or failure to act, except for his own bad faith, willful
misfeasance, gross negligence, or reckless disregard of his duties. The Master
Trust Agreement provides that a Trustee or officer is entitled to
indemnification against liabilities and expenses with respect to claims related
to his position with the Trust, unless such Trustee or officer shall have been
adjudicated to have acted with bad faith, willful misfeasance, or gross
negligence, or in reckless disregard of his duties, or not to have acted in good
faith in the reasonable belief that his action was in the best interest of the
Trust, or, in the event of settlement, unless there has been a determination
that such Trustee or officer has engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of his duties. The Articles of
Incorporation and By-Laws of the Company contain similar indemnification for its
Directors and officers.
RIGHTS OF INSPECTION
THE TRUST AND THE COMPANY: Shareholders of the Trust have the same right to
inspect in Massachusetts the governing documents, records of meetings of
shareholders, shareholder lists, share transfer records, accounts and books of
the Trust as are permitted shareholders of a corporation under the Massachusetts
corporation law. The purpose of inspection must be for interests of shareholders
relative to the affairs of the Trust. Under Maryland law, persons who have been
shareholders of record for six months or more and who own at least 5% of the
shares of the Company may inspect the books of account and stock ledger of a
Fund during regular business hours, following a written demand stating a proper
purpose related to corporate business.
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The foregoing is only a summary of certain characteristics of the operations
of the Acquired Fund, the Acquiring Fund, the Trust and the Company, the Master
Trust Agreement, Articles of Incorporation, By-Laws, and Massachusetts and
Maryland law. The foregoing is not a complete description of the documents
cited. Shareholders should refer to the provisions of such respective Master
Trust Agreement, Articles of Incorporation, By-Laws, and Massachusetts and
Maryland law directly for a more thorough description.
ADDITIONAL INFORMATION ABOUT
THE ACQUIRED FUND AND THE ACQUIRING FUND
ACQUIRED FUND
Information about the Acquired Fund is included in its current Prospectus
dated December 30, 1994, and in the Statement of Additional Information of the
same date that has been filed with the SEC, both of which are incorporated
herein by reference. A copy of the Prospectus and the statement of additional
information is available upon request and without charge by writing to the
Acquired Fund at the address listed on the cover page of this Prospectus/Proxy
Statement or by calling toll-free 1-800-343-6324.
ACQUIRING FUND
Information concerning the operation and management of the Acquiring Fund is
incorporated herein by reference from the Prospectus dated January 5, 1995, a
copy of which is enclosed, and Statement of Additional Information dated January
5, 1995, a copy of which is available upon request and without charge by writing
the Acquiring Fund, at the address listed on the cover page of this
Prospectus/Proxy Statement or by calling toll-free 1-800-343-6324.
Each of the Trust and the Company is subject to the informational
requirements of the Exchange Act and the 1940 Act, and in accordance therewith
file reports and other information including proxy material, reports and charter
documents with the SEC. These reports can be inspected and copies obtained at
the Public Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Northeast Regional Office of the SEC, Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can also be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, SEC, Washington, D.C. 20549 at
prescribed rates.
OTHER BUSINESS
The Trustees of the Trust do not intend to present any other business at the
Meeting. If, however, any other matters are properly brought before the Meeting,
the persons named in the accompanying form of proxy will vote thereon in
accordance with their judgment.
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VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Trustees of the Trust to be used at the
Special Meeting of Shareholders of the Acquired Fund of the Trust to be held at
10:00 a.m. April 19, 1995, at 200 Park Avenue, New York, New York 10166, and at
any adjournments thereof. This Prospectus/Proxy Statement, along with a Notice
of the Meeting and a proxy card, is first being mailed to shareholders of the
Acquired Fund on or about February 14, 1995. Only shareholders of record as of
the close of business on the Record Date will be entitled to notice of, and to
vote at, the Meeting or any adjournment thereof. The holders of a majority of
the shares of the Acquired Fund outstanding at the close of business on the
Record Date present in person or represented by proxy will constitute a quorum
for the Meeting of the Acquired Fund. If the enclosed form of proxy is properly
executed and returned in time to be voted at the Meeting, the proxies named
therein will vote the shares represented by the proxy in accordance with the
instructions marked thereon. Unmarked proxies will be voted FOR the proposed
Reorganization and FOR any other matters deemed appropriate. Proxies that
reflect abstentions and "broker non-votes" (i.e., shares held by brokers or
nominees as to which (i) instructions have not been received from the beneficial
owners or the persons entitled to vote or (ii) the broker or nominee does not
have discretionary voting power on a particular matter) will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. A proxy may be revoked at any time on or before the
Meeting by written notice to the Secretary of the Trust, 200 Park Avenue, New
York, New York 10166. Unless revoked, all valid proxies will be voted in
accordance with the specifications thereon or, in the absence of such
specifications, for approval of the Plan and the Reorganization contemplated
thereby.
Approval of the Plan with respect to the Acquired Fund will require the
affirmative vote of the lesser of: (i) 67% of the voting securities of the
Acquired Fund present at the Meeting, if the holders of more than 50% of the
outstanding voting securities of the Acquired Fund are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of the
Acquired Fund. Each full share outstanding is entitled to one vote and each
fractional share outstanding is entitled to a proportionate share of one vote.
Mellon Bank has advised the Trust that shares of the Acquired Fund owned by
it or affiliates with respect to which Mellon Bank or such affiliate exercises
voting discretion will be voted FOR the Reorganization. Premier has advised the
Trust that shares owned by it will be voted FOR the Reorganization.
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If the shareholders of the Acquired Fund do not vote to approve the
Reorganization, the Trustees of the Trust will continue the management of the
Acquired Fund and will consider other alternatives in the best interests of the
shareholders, including liquidation of the Acquired Fund.
Proxy solicitations will be made primarily by mail, but proxy solicitations
may also be made by telephone, telegraph or personal solicitations conducted by
officers and employees of Dreyfus, its affiliates or other representatives of
the Trust. The cost of solicitation will be borne by Dreyfus.
Dreyfus will be responsible for the respective expenses of the Acquired Fund
and the Acquiring Fund incurred in connection with entering into and carrying
out the Reorganization, whether or not the Reorganization is consummated.
Non-recurring expenses in connection with the Reorganization are estimated to be
$86,500.
In the event that sufficient votes to approve the Reorganization are not
received by April 18, 1995, 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 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 shareholders with respect to the reasons for the solicitation.
Any such adjournment will require an affirmative vote by the holders of a
majority of the shares present in person or by proxy and entitled to vote at the
Meeting. The persons named as proxies will vote upon such adjournment after
consideration of all circumstances which may bear upon a decision to adjourn the
Meeting.
A shareholder of the Acquired Fund who objects to the proposed transaction
will not be entitled under either Massachusetts law or the Master Trust
Agreement of the Trust to demand payment for, or an appraisal of, his or her
shares. However, shareholders should be aware that the Reorganization as
proposed is not expected to result in recognition of gain or loss to
shareholders for Federal income tax purposes and that, if the Reorganization is
consummated, shareholders will be free to redeem the Investor Shares of the
Acquiring Fund which they received in the transaction at such shares'
then-current net asset value. Shares of the Acquired Fund may be redeemed at any
time prior to the consummation of the Reorganization.
The Trust does not hold annual shareholder meetings. Shareholders wishing to
submit proposals for consideration for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to the
Secretary of the Trust at the address set forth on the cover of this Prospectus/
Proxy Statement such that they will be received by the Trust in a reasonable
period of time prior to any such meeting.
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The votes of the shareholders of the Acquiring Fund are not being solicited
by this Prospectus/Proxy Statement and are not required to carry out the
Reorganization.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Acquired Fund, 200 Park Avenue, New York, New York 10166,
whether other persons are beneficial owners of shares for which proxies are
being solicited and, if so, the number of copies of this Prospectus/Proxy
Statement needed to supply copies to the beneficial owners of the respective
shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of Dreyfus/Laurel International Fund, as of
August 31, 1994 and the statement of operations, the statement of changes in net
assets and financial highlights for the year ended August 31, 1994, have been
incorporated by reference into this Prospectus/Proxy Statement in reliance on
the report of KPMG Peat Marwick LLP, independent accountants for the Trust for
the year ended August 31, 1994, given on the authority of the firm as experts in
accounting and auditing. Information for fiscal years (periods) prior to the
year ended August 31, 1994, was audited by other independent accountants.
The audited financial statements of the Dreyfus International Equity
Allocation Fund, as of October 31, 1994 and the statement of operations, the
statement of changes in net assets and financial highlights for the period ended
October 31, 1994, have been incorporated by reference into this Prospectus/
Proxy Statement in reliance on the report of KPMG Peat Marwick LLP, independent
accountants for the Company, given on the authority of the firm as experts in
accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of The Dreyfus/
Laurel Funds, Inc. will be passed upon by Kirkpatrick & Lockhart, 1800 M Street,
N.W., Washington, DC 20036.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE "NON-INTERESTED" TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL OF THE PLAN, AND ANY UNMARKED PROXIES WITHOUT
INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLAN.
-------------------
February 14, 1995
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EXHIBIT A TO PROSPECTUS/PROXY
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
the 20th day of December, 1994, by and between The Dreyfus/ Laurel Investment
Series (formerly The Laurel Investment Series, and prior thereto The Boston
Company Investment Series), a Massachusetts business trust, with its principal
place of business at 200 Park Avenue, New York, New York 10166 (the "Trust"),
and The Dreyfus/Laurel Funds, Inc., a Maryland corporation, with its principal
place of business at 200 Park Avenue, New York, New York 10166 (the
"Corporation").
The Corporation consists of a number of segregated portfolios of assets
("portfolios"), of which Dreyfus International Equity Allocation Fund is the
subject of this Agreement and is designated the "Acquiring Fund". The Trust
consists of a number of segregated portfolios, of which Dreyfus/Laurel
International Fund is the subject of this Agreement and is designated the
"Acquired Fund".
This Agreement governs the proposed issuance of shares of the Acquiring Fund
in exchange for all or substantially all of the assets of, and its assumption of
certain liabilities of, the Acquired Fund on the terms specified below (such
transaction being referred to herein as the "Reorganization").
This Agreement is intended to be, and is adopted as, a plan of a
reorganization within the meaning of section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The Reorganization will
consist of the transfer of all or substantially all of the assets of the
Acquired Fund in exchange solely for Investor Shares of voting common stock,
$.001 par value per share, of the Acquiring Fund (the "Acquiring Fund's Shares")
and the assumption by the Acquiring Fund of certain liabilities of the Acquired
Fund and the distribution, after the Closing Date hereinafter referred to, of
the Acquiring Fund's Shares to the shareholders of the Acquired Fund in
termination of the Acquired Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
The shares of the Acquiring Fund are divided into two classes, designated
"Investor Shares" and "Class R Shares," respectively. The outstanding shares of
beneficial interest in the Acquired Fund (the "Acquired Fund's Shares") consist
of one class of shares, designated "Investor Shares."
WHEREAS, the Corporation and the Trust are open-end, registered investment
companies of the management type, and the Acquired Fund owns securities which
generally are assets of the character in which the Acquiring Fund is permitted
to invest;
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WHEREAS, the Board of Directors of the Corporation has determined that the
exchange of all or substantially all of the assets of the Acquired Fund for the
Acquiring Fund's Shares and the assumption of certain liabilities of the
Acquired Fund is in the best interests of the Acquiring Fund's shareholders and
that the interests of the existing shareholders of the Acquiring Fund would not
be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees of the Trust has determined that the exchange
of all or substantially all of the assets of the Acquired Fund for the Acquiring
Fund's Shares and the assumption of certain liabilities by the Acquiring Fund is
in the best interests of the Acquired Fund's shareholders and that the interests
of the existing shareholders of the Acquired Fund would not be diluted as a
result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS, ASSUMPTION OF LIABILITIES AND TERMINATION
1.1 Subject to the requisite approval of the shareholders of the Acquired
Fund and to the other terms and conditions herein set forth and on the basis of
the representations and warranties contained herein, the Trust shall transfer to
the Corporation, and the Corporation shall acquire from the Trust, at the
closing provided for in paragraph 3.1 (the "Closing"), all or substantially all
of the Assets (as defined in paragraph 1.2(a)). The Corporation agrees in
exchange therefor, at the Closing --
(a) to issue and deliver to the Trust the number of full and fractional
Acquiring Fund's Shares determined by dividing the net asset value of the
Acquired Fund (computed as set forth in paragraph 2.1) ("Acquired Fund NAV")
by the net asset value (computed as set forth in paragraph 2.2) ("NAV") of
one Investor Share of the Acquiring Fund, and
(b) to assume the Liabilities (as defined in paragraph 1.3).
The Trust will (i) pay or cause to be paid to the Corporation for the
benefit of the Acquiring Fund any interest received after the Closing with
respect to the Assets, (ii) transfer to the Corporation for the benefit of the
Acquiring Fund any distributions, rights, stock dividends or other property
received by the Trust after the Closing as distributions on or with respect to
the Assets, and (iii) transfer any remaining Assets as soon as practicable after
the Closing. Any such interest, distributions, rights, stock dividends or other
property and Assets so paid or transferred, or received directly by the
Corporation shall be allocated by the Corporation to the account of the
Acquiring Fund.
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1.2 (a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund (the "Assets") shall consist of all property, including without limitation,
all cash, cash equivalents, securities, commodities and futures interests,
dividend and interest receivables, claims and rights of action that are owned by
the Acquired Fund, and any deferred or prepaid expenses shown as an asset on the
books of the Acquired Fund, on the closing date provided in paragraph 3.1 (the
"Closing Date"), but shall not include corporate books, records or minutes of
the Acquired Fund. The Assets shall be invested at all times through the Closing
in a manner that ensures compliance with paragraph 4.1(j).
(b) The Trust has provided the Corporation with a list of all property of
the Acquired Fund, including all assets described in paragraph 1.2(a), as of the
date of execution of this Agreement (the "List"). The Trust reserves the right
to sell any of these assets. The Corporation will, within a reasonable time
prior to the Closing Date, furnish the Trust with a list of any assets on the
List that do not conform to the Acquiring Fund's investment objective, policies
and restrictions or that the Acquiring Fund otherwise does not desire to hold.
The Acquired Fund will dispose of such assets prior to the Closing Date to the
extent practicable and to the extent the Acquired Fund would not be affected
adversely by such a disposition. In addition, if it is determined that the
portfolios of the Acquired Fund and the Acquiring Fund, when aggregated, would
contain investments exceeding certain percentage limitations imposed upon the
Acquiring Fund with respect to such investments, the Acquired Fund, if requested
to do so by the Acquiring Fund, will dispose of and/or reinvest a sufficient
amount of such investments as may be necessary to avoid violating such
limitations as of the Closing Date.
1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
assume all liabilities, debts, obligations, expenses, costs, charges and
reserves reflected on an unaudited Statement of Assets and Liabilities of the
Acquired Fund prepared by or at the direction of The Dreyfus Corporation, the
manager of the Acquired Fund and the Acquiring Fund (the "Manager"), as of the
Valuation Date (as defined in paragraph 2.1), in accordance with generally
accepted accounting principles consistently applied from the prior audited
period (collectively the "Liabilities"). The Acquiring Fund shall assume only
the Liabilities and shall not assume any other liabilities, whether absolute or
contingent, other than the obligation to indemnify the trustees and officers of
the Acquired Fund to the extent provided in the Trust's Amended and Restated
Master Trust Agreement ("Trust Agreement") and By-Laws.
1.4 On or as soon as possible after the Closing Date, the Acquired Fund
shall distribute PRO RATA to its shareholders of record determined as of
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the close of business on the Valuation Date (the "Acquired Fund's Shareholders")
the Acquiring Fund's Shares received by the Acquired Fund pursuant to paragraph
1.1. Such distribution will be accomplished by transferring the Acquiring Fund's
Shares then credited to the account of the Acquired Fund on the Acquiring Fund's
stock transfer records to open accounts on those records established in the
names of the Acquired Fund's Shareholders, with each such shareholder's account
being credited with the respective PRO RATA number of full and fractional shares
(rounded to three decimal places) of the Acquiring Fund's Shares due such
shareholder. All issued and outstanding Acquired Fund's Shares, including those
represented by certificates, will simultaneously be canceled on the Acquired
Fund's share transfer records. The Corporation shall not issue certificates
representing the Acquiring Fund's Shares in connection with the Reorganization.
1.5 As soon as is conveniently practicable after the distribution of the
Acquiring Fund's Shares described in paragraph 1.4, the Trust will effect the
termination of the Acquired Fund in the manner provided in the Trust Agreement
and in accordance with applicable law, and from and after the Closing it shall
not conduct any business on behalf of the Acquired Fund except in connection
with its termination.
1.6 Ownership of the Acquiring Fund's Shares will be shown on the books of
the Acquiring Fund's transfer agent. Subject only to the terms of this
Agreement, shares of the Acquiring Fund will be issued in the manner described
in the current prospectus and statement of additional information of the
Acquiring Fund.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund's
Shares in a name other than the registered holder of the Acquired Fund's Shares
on the books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom the Acquiring Fund's Shares
are to be issued and transferred.
1.8 Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of the Trust from and after the Closing Date until the
Acquired Fund is terminated.
2. VALUATION
2.1 The value of the Assets and Liabilities shall be the Acquired Fund
NAV, computed as of the close of regular trading on the New York Stock Exchange
(the "Exchange") on April 28, 1995, or such other time and date as the parties
may agree in writing (such time and date being referred to herein as the
"Valuation Date"), using the valuation procedures set forth in the Trust
Agreement and the Acquired Fund's then-current prospectus and statement of
additional information.
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2.2 The NAV of the Acquiring Fund's Share shall be computed as of the
Valuation Date, using the valuation procedures set forth in the Corporation's
Articles of Incorporation and the Acquiring Fund's then-current prospectus and
statement of additional information.
2.3 All computations of value shall be made by Mellon Bank, N.A. in
accordance with its regular practice as fund accountant for the Corporation and
the Trust.
3. CLOSING AND CLOSING DATE
3.1 The Reorganization, together with all related acts necessary to
consummate the same (the "Closing"), shall take place on the next full business
day following the Valuation Date or such later date as the parties may agree in
writing ("Closing Date"). All acts taking place at the Closing shall be deemed
to take place simultaneously as of the opening of business on the Closing Date,
unless otherwise provided. The Closing shall be held at the offices of the
Manager in New York, New York, or at such other time and/or place as the parties
may agree.
3.2 The Trust shall deliver to the Corporation at the Closing a statement
of Assets and Liabilities, including a schedule of the Assets setting forth for
all portfolio securities included therein their adjusted tax basis and holding
period by lot, as of the Closing, certified by the Trust's Treasurer or
Assistant Treasurer. Mellon Bank, N.A., as custodian for the Trust, shall
deliver at the Closing a certificate of an authorized officer stating that: (a)
the Assets shall have been presented for examination to the Acquiring Fund prior
to the Closing Date and shall have been delivered in proper form to the
Acquiring Fund at the Closing and (b) all necessary taxes shall have been paid,
or provision for payment shall have been made, in conjunction with the delivery
thereof.
3.3 In the event that on the Valuation Date (a) the Exchange or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted
or (b) trading or the reporting of trading on the Exchange or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquired Fund or shares of the Acquiring Fund is impracticable, the Valuation
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
3.4 The Trust shall cause The Shareholder Services Group, Inc., as
transfer agent for the Trust, to deliver at the Closing a certificate of an
authorized officer listing the names and addresses of the Acquired Fund's
Shareholders and the number of Acquired Fund's Shares owned by each such
shareholder immediately prior the Closing. The Corporation shall cause its
transfer agent (a) to issue and deliver at the Closing a confirmation evidencing
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the Acquiring Fund's Shares to be credited on the Closing Date to the Acquired
Fund, or provide at the Closing evidence satisfactory to the Trust that the
Acquiring Fund's Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund and (b) deliver at the Closing a certificate as to
the opening on the Acquiring Fund's stock transfer books of accounts in the
names of the Acquired Fund's Shareholders. At the Closing each party shall
deliver to the other such bills of sale, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
3.5. The Corporation and the Trust each shall deliver to the other at the
Closing a certificate executed in its name by its President or a Vice President
in form and substance satisfactory to the recipient and dated the Closing Date,
to the effect that its representations and warranties made in this Agreement are
true and correct at the Closing Date except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as the
recipient shall reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Trust, on behalf of the Acquired Fund, represents and warrants to
the Corporation, on behalf of the Acquiring Fund, as follows:
(a) The Trust is a trust with transferable shares of the type commonly
referred to as a Massachusetts business trust, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts;
(b) The Trust is a duly registered investment company classified as a
management company of the open-end type, and its registration with the
Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act is in full force and effect; and the Acquired
Fund is a duly established and designated portfolio of the Trust established
and designated by resolution of its trustees;
(c) The current prospectus and statement of additional information of
the Acquired Fund conforms in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and
the 1940 Act and the rules and regulations of the Commission thereunder and
does not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
(d) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in material violation of the Trust Agreement
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or its By-Laws, as each may have been amended to the date hereof, or of any
agreement, indenture, instrument contract, lease or other undertaking with
respect to the Acquired Fund to which the Trust is a party or by which it is
bound;
(e) The Trust has no material contracts or other commitments with
respect to the Acquired Fund (other than this Agreement) which, if
terminated prior to the Closing Date, would result in an additional
liability of the Acquired Fund;
(f) Except as otherwise disclosed in writing to and accepted by the
Corporation, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or to its
knowledge threatened against the Trust with respect to the Acquired Fund or
any of its properties or assets that, if adversely determined, would
materially and adversely affect its financial condition or the conduct of
its business; the Trust knows of no facts which might form the basis for the
institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially or adversely affects its business or its ability to
consummate the transactions contemplated hereby;
(g) The Statements of Assets and Liabilities of the Acquired Fund for
the fiscal years ended August 31, 1992 and 1993 have been audited by Coopers
& Lybrand L.L.P., certified public accountants, and the Statement of Assets
and Liabilities of the Acquired Fund for the fiscal year ended August 31,
1994 has been audited by KPMG Peat Marwick LLP, certified public
accountants, each such statement (copies of which have been furnished to the
Corporation) is in accordance with generally accepted accounting principles
consistently applied, and fairly and accurately reflects the financial
condition of the Acquired Fund as of such date; and there are no known
contingent liabilities of the Acquired Fund as of such date not disclosed
therein;
(h) Since August 31, 1994, there has not been any material adverse
change with respect to the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business or any incurrence by the Acquired Fund of indebtedness maturing
more than one year from the date that such indebtedness was incurred, except
as otherwise disclosed on the Statement of Assets and Liabilities referred
to in paragraph 1.3; provided that, for the purposes of this subparagraph
(h), a decline in net asset value per share of the Acquired Fund shall not
constitute a material adverse change;
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(i) At the Closing Date, all federal and other tax returns and reports
of the Acquired Fund required by law to have been filed by such date shall
have been filed, and all federal and other taxes shall have been paid so far
as due, or provision shall have been made for the payment thereof, and, to
the best of the Trust's knowledge, no such return shall be currently under
audit and no assessment shall have been asserted or threatened with respect
to any such return;
(j) For each of the last three taxable years of its operation or its
full period of operation, if shorter, the Acquired Fund has been a "fund" as
defined in section 851(h)(2) of the Code and has met the requirements of
Subchapter M of the Code ("Subchapter M") for qualification and treatment as
a regulated investment company, and the Acquired Fund will meet such
requirements for its current taxable year; and the Acquired Fund has no
earnings and profits accumulated in any taxable year to which the provisions
of Subchapter M did not apply to it;
(k) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, the Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the Acquired Fund); all of the issued and
outstanding shares of the Acquired Fund will, at the time of Closing, be
held by the persons and in the amounts set forth in the records of the
Trust's transfer agent as provided in paragraph 3.4; and the Acquired Fund
does not have outstanding any options, warrants or other rights to subscribe
for or purchase any of the Acquired Fund's Shares, nor is there outstanding
any security convertible into any of the Acquired Fund's Shares;
(l) At the Closing Date, the Trust, on behalf of the Acquired Fund,
will have good and marketable title to the Assets and full right, power and
authority to sell, assign, transfer and deliver the Assets hereunder free of
any liens or other encumbrances, and, upon delivery and payment for the
Assets, the Corporation, on behalf of the Acquiring Fund, will acquire good
and marketable title thereto, subject to no restrictions on the full
transfer thereof, including such restrictions as might arise under the 1933
Act, other than as disclosed to the Corporation;
(m) The execution, delivery and performance of this Agreement has been
duly authorized as of the date hereof by all necessary action on the part of
the Trust's Board of Trustees; and, subject to receipt of any necessary
exemptive relief or no-action assurances requested from the Commission or
its staff with respect to sections 17(a) and 17(d) of the 1940 Act, this
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Agreement will constitute a valid and binding obligation of the Trust on
behalf of the Acquired Fund, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general principles of equity;
(n) On the Closing Date, the performance of this Agreement shall have
been duly authorized by all necessary action by the shareholders of the
Acquired Fund;
(o) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or the 1940 Act for the execution of this Agreement on
behalf of the Trust or the performance of the Agreement on behalf of the
Trust, except for: (i) the filing with the Commission of the Registration
Statement referenced in paragraph 5.6 (the "Registration Statement") and the
proxy statement of the Trust included therein (the "Proxy Statement"), (ii)
receipt of the exemptive relief referenced in subparagraph 4.1(m), and (iii)
such consents, approvals, authorizations and filings as have been made or
received, and except for such consents, approvals, authorizations and
filings as may be required subsequent to the Closing Date;
(p) The information to be furnished by the Trust on behalf of the
Acquired Fund for use in no-action requests, applications for orders,
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all
material respects with federal securities and other laws and regulations
applicable thereto;
(q) The Proxy Statement (other than information therein that relates to
the Corporation and the Acquiring Fund) did, on the effective date of the
Registration Statement, and will, on the Closing Date, (i) comply in all
material respects with the applicable provisions of the 1933 Act, the 1934
Act, and the 1940 Act and the regulations thereunder, and (ii) not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
materially misleading;
(r) The Liabilities were incurred by the Acquired Fund in the ordinary
course of its business;
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(s) The Acquired Fund is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case within
the meaning of section 368(a)(3)(A) of the Code;
(t) Not more than 25% of the value of the Acquired Fund's total assets
(excluding cash, cash items and U.S. government securities) is invested in
the stock or securities of any one issuer, and not more than 50% of the
value of such assets is invested in the stock or securities of five or fewer
issuers; and
(u) The Acquired Fund will be terminated as soon as reasonably
practicable after the Reorganization.
4.2 The Corporation, on behalf of the Acquiring Fund, represents and
warrants to the Trust, on behalf of the Acquired Fund, as follows:
(a) The Corporation is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Maryland;
(b) The Corporation is a duly registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; and the Acquiring Fund is a duly established and designated
portfolio of the Corporation established and designated by resolution of its
directors;
(c) The current prospectus and statement of additional information of
the Acquiring Fund conforms in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and does not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(d) The Corporation is not, and the execution, delivery and performance
of this Agreement will not result, in a material violation of its Articles
of Incorporation or By-Laws, as each may have been amended to the date
hereof, or of any agreement, indenture, instrument, contract, lease or other
undertaking with respect to the Acquiring Fund to which the Corporation is a
party or by which it is bound;
(e) Except as otherwise disclosed in writing to and accepted by the
Trust, no litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against the Corporation with respect to the Acquiring
Fund or any of the Acquiring Fund's properties or assets that, if adversely
determined, would materially and adversely affect its financial
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condition or the conduct of its business; the Corporation knows of no facts
which might form the basis for the institution of such proceedings and is
not a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions contemplated hereby;
(f) The Statement of Assets and Liabilities of the Acquiring Fund for
the fiscal period ended October 31, 1994, has been audited by KPMG Peat
Marwick LLP, certified public accountants, has been furnished to the Trust,
is in accordance with generally accepted accounting principles consistently
applied, and fairly and accurately reflects the financial condition of the
Acquiring Fund as of October 31, 1994; and there are no known contingent
liabilities of the Acquiring Fund as of such date not disclosed therein;
(g) Since October 31, 1994, there has not been any material adverse
change with respect to the Acquiring Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business or any incurrence by the Acquiring Fund of indebtedness maturing
more than one year from the date that such indebtedness was incurred, except
as otherwise disclosed to and accepted by the Trust; provided that, for the
purposes of this subparagraph (g), a decline in net asset value per share of
the Acquiring Fund shall not constitute a material adverse change;
(h) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law to have been filed by such date shall
have been filed, and all federal and other taxes shall have been paid so far
as due, or provision shall have been made for the payment thereof, and, to
the best of the Corporation's knowledge, no such return shall be currently
under audit and no assessment shall have been asserted or threatened with
respect to any such return;
(i) For each of the last three taxable years of its operation or its
full period of operation, if shorter, the Acquiring Fund has been a "fund"
as defined in section 851(h)(2) of the Code and has met the requirements of
Subchapter M for qualification and treatment as a regulated investment
company, and the Acquiring Fund will meet such requirements for its current
taxable year; and the Acquiring Fund has no earnings and profits accumulated
in any taxable year to which the provisions of Subchapter M did not apply to
it;
(j) All issued and outstanding shares of the Acquiring Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
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paid and non-assessable with no personal liability attaching to ownership
thereof; and the Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquiring
Fund's Shares, nor is there outstanding any security convertible into any of
the Acquiring Fund's Shares;
(k) The execution, delivery and performance of this Agreement has been
duly authorized as of the date hereof by all necessary action on the part of
the Corporation's Board of Directors; and, subject to receipt of any
necessary exemptive relief or no-action assurances requested from the
Commission or its staff with respect to sections 17(a) and 17(d) of the 1940
Act, this Agreement will constitute a valid and binding obligation of the
Corporation on behalf of the Acquiring Fund, enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general principles of equity;
(l) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act or the 1940 Act for the execution
of this Agreement on behalf of the Corporation or the performance of the
Agreement on behalf of the Corporation, except for: (i) the filing of the
Registration Statement with the Commission, (ii) receipt of the exemptive
relief referenced in subparagraph 4.2(k), and (iii) such consents,
approvals, authorizations and filings as have been made or received, and
except for such consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date;
(m) The information to be furnished by the Corporation on behalf of the
Acquiring Fund for use in no-action requests, application for orders,
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all
material respects with federal securities and other laws and regulations
applicable thereto;
(n) The Proxy Statement (only insofar as it relates to the Corporation
and the Acquiring Fund and is based on information provided by the
Corporation) did, on the effective date of the Registration Statement, and
will, on the Closing Date, (i) comply in all material respects with the
applicable provisions of the 1933 Act, the 1934 Act, and the 1940 Act and
the regulations thereunder, and (ii) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which such statements were made, not materially misleading;
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(o) No consideration other than the Acquiring Fund's Shares (and the
Acquiring Fund's assumption of the Liabilities) will be issued in exchange
for the Assets in the Reorganization;
(p) The Acquiring Fund has no plan or intention to issue additional
shares following the Reorganization except for shares issued in the ordinary
course of its business as a portfolio of an open-end investment company; nor
does the Acquiring Fund have any plan or intention to redeem or otherwise
reacquire any Acquiring Fund's Shares issued to the Acquired Fund's
Shareholders pursuant to the Reorganization, other than through redemptions
arising in the ordinary course of such business;
(q) The Acquiring Fund (i) will actively continue the Acquired Fund's
business in the same manner that the Acquired Fund conducted such business
immediately before the Reorganization, (ii) has no plan or intention to sell
or otherwise dispose of any of the Assets, except for dispositions made in
the ordinary course of its business and dispositions necessary to maintain
its status as a regulated investment company under Subchapter M, and (c)
expects to retain substantially all the Assets in the same form as it
receives them in the Reorganization, unless and until subsequent investment
circumstances suggest the desirability of change or it becomes necessary to
make dispositions thereof to maintain such status;
(r) There is no plan or intention for the Acquiring Fund to be
dissolved or merged with another corporation or business trust or any "fund"
thereof (within the meaning of section 851(h)(2) of the Code) following the
Reorganization; and
(s) Immediately after the Reorganization, (i) not more than 25% of the
value of the Acquiring Fund's total assets (excluding cash, cash items and
U.S. government securities) will be invested in the stock or securities of
any one issuer and (ii) not more than 50% of the value of such assets will
be invested in the stock or securities of five or fewer issuers.
4.3. The Trust, on behalf of the Acquired Fund, and the Corporation, on
behalf of the Acquiring Fund, each represents and warrants to the other as
follows:
(a) The fair market value of the Acquiring Fund's Shares, when received
by the Acquired Fund's Shareholders, will be approximately equal to the fair
market value of their Acquired Fund's Shares constructively surrendered in
exchange therefor;
(b) Its management (i) is unaware of any plan or intention of Acquired
Fund's Shareholders to redeem or otherwise dispose of any portion
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of the Acquiring Fund's Shares to be received by them in the Reorganization
and (ii) does not anticipate dispositions thereof at the time of or soon
after the Reorganization to exceed the usual rate and frequency of
redemptions of shares of the Acquired Fund as a series of an open-end
investment company. Consequently, its management expects that the percentage
of the Acquired Fund's Shareholder interests, if any, that will be redeemed
as a result of or at the time of the Reorganization will be DE MINIMIS. Nor
does its management anticipate that there will be extraordinary sales of
shares of the Acquiring Fund immediately following the Reorganization;
(c) The Acquired Fund's Shareholders will pay their own expenses, if
any, incurred in connection with the Reorganization;
(d) Immediately following consummation of the Reorganization, the
Acquiring Fund will hold the same assets and be subject to the same
liabilities that the Acquired Fund held or was subject to immediately prior
thereto, plus any liabilities and expenses of the parties incurred in
connection with the Reorganization;
(e) The fair market value on a going concern basis of the Assets will
equal or exceed the Liabilities to be assumed by the Acquiring Fund and
those to which the Assets are subject;
(f) There is no intercompany indebtedness between the Acquired Fund and
the Acquiring Fund that was issued or acquired, or will be settled, at a
discount; and
(g) Pursuant to the Reorganization, the Acquired Fund will transfer to
the Acquiring Fund, and the Acquiring Fund will acquire, at least 90% of the
fair market value of the net assets, and at least 70% of the fair market
value of the gross assets, held by the Acquired Fund immediately before the
Reorganization. For the purposes of this representation, any amounts used by
the Acquired Fund to pay its Reorganization expenses and redemptions and
distributions made by it immediately before the Reorganization (except those
occurring in the ordinary course of its business) will be included as assets
thereof held immediately before the Reorganization.
5. COVENANTS OF THE CORPORATION AND THE TRUST
5.1 The Corporation and the Trust will operate the businesses of the
Acquiring Fund and the Acquired Fund, respectively, in the ordinary course
between the date hereof and the Closing Date, it being understood that such
ordinary course of business will include the declaration and payment of
customary dividends and other distributions.
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5.2 The Trust will call a meeting of the Acquired Fund's shareholders to
consider and act upon this Agreement and to take all other action necessary to
obtain approval of the transactions contemplated hereby.
5.3 The Trust covenants that the Acquiring Fund's Shares to be delivered
hereunder are not being acquired for the purpose of making any distribution
thereof other than in accordance with the terms of this Agreement.
5.4 The Trust will assist the Corporation in obtaining such information as
the Corporation reasonably requests concerning the beneficial ownership of the
Acquired Fund's Shares.
5.5 As promptly as practicable, but in any case within sixty days after
the Closing Date, the Trust shall furnish the Corporation, in such form as is
reasonably satisfactory to the Corporation, a statement of the earnings and
profits of the Acquired Fund for federal income tax purposes that will be
carried over to the Acquiring Fund as a result of section 381 of the Code, and
such statement will be certified by the Trust's President and its Treasurer.
5.6 The Trust has provided and, to the extent necessary, will provide the
Corporation with information reasonably necessary for the preparation of a
prospectus (the "Prospectus") including the Proxy Statement, to be included in a
registration statement on Form N-14 to be filed with the Commission relating to
the Acquiring Fund's Shares issuable hereunder, and any supplement or amendment
thereto (the "Registration Statement"), in compliance with the 1933 Act, the
1934 Act and the 1940 Act, in connection with the meeting of the Acquired Fund's
Shareholders to consider approval of this Agreement and the transactions
contemplated hereby.
5.7 The Trust covenants that the Acquired Fund's books and records,
including all books and records required to be maintained under the 1940 Act and
the rules and regulations thereunder, shall be available to the Corporation from
and after the Closing for the purpose of examining same and making copies
thereof or extracts therefrom.
5.8 The Corporation and the Trust each will, from time to time, as and
when requested by the other party, execute and deliver or cause to be executed
and delivered all such assignments and other instruments, and will take or cause
to be taken such further action, as the other party may deem necessary or
desirable in order to vest in, and confirm to, (a) the Acquiring Fund, title to
and possession of all the Assets, and (b) the Acquired Fund, title to and
possession of the Acquiring Fund's Shares to be delivered hereunder, and
otherwise to carry out the intent and purpose of this Agreement.
5.9 The Corporation, on behalf of the Acquiring Fund, agrees to use all
reasonable efforts to obtain the approvals and authorizations required by the
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1933 Act, the 1940 Act and such of the state Blue Sky or securities laws as it
may deem appropriate in order to consummate the transactions contemplated hereby
and to continue its operations after the Closing Date.
5.10 Subject to the provisions of this Agreement, the Corporation and the
Trust each will take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST
The obligations of the Trust to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Corporation
of all of the obligations to be performed by the Corporation hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
6.1 All representations and warranties of the Corporation contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date; and
6.2 The Corporation shall have delivered to the Trust at the Closing the
certificate it is required to deliver pursuant to paragraph 3.5.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CORPORATION
The obligations of the Corporation to consummate the transactions provided
for herein shall be subject, at its election, to the performance by the Trust of
all the obligations to be performed by the Trust hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date; and
7.2 The Trust shall have delivered to the Corporation the statement
described in paragraph 3.2 and the certificate it is required to deliver
pursuant to paragraph 3.5.
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8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CORPORATION AND THE TRUST
The obligations of each party to this Agreement to consummate the
transactions provided for herein shall be subject, at its election, to
satisfaction of all the following conditions on or before the Closing Date:
8.1 The Agreement and the transactions contemplated hereby shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Acquired Fund in accordance with the provisions of the Trust Agreement and the
1940 Act, and certified copies of the resolutions evidencing such approval shall
have been delivered to the Trust and the Corporation. Notwithstanding anything
herein to the contrary, neither the Corporation nor the Trust may waive the
conditions set forth in this paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated hereby;
8.3 All consents of other parties and all consents, orders and permits of
federal, state and local regulatory authorities (including those of the
Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders (under sections 17(a) and 17(d) of
the 1940 Act or otherwise) from such federal and state authorities) deemed
necessary by the Corporation or the Trust to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
the Corporation or the Trust, provided that either party hereto may for itself
waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act, and no stop orders suspending the effectiveness thereof shall have been
issued, and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act;
8.5 The Acquired Fund shall have declared as of, or on, the Valuation
Date, and shall have paid on or before the Closing Date, a dividend and/or other
distribution that, together with all previous dividends and other distributions,
shall have the effect of distributing to the Acquired Fund's Shareholders all of
the Acquired Fund's investment company taxable income for all taxable years
ending on or prior to the Closing Date (computed without regard to any deduction
for dividends paid) and all of its net capital gain realized in all such taxable
years (after reduction for any capital loss carryforward);
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8.6 The Corporation and the Trust shall have received an opinion from
Kirkpatrick & Lockhart, dated the Closing Date, addressed to them and in a form
reasonably satisfactory to the General Counsel of the Manager, substantially to
the effect that for federal income tax purposes:
(a) The transfer of all or substantially all of the Assets solely in
exchange for the Acquiring Fund's Shares and the assumption by the Acquiring
Fund of the Liabilities, and the distribution of such shares to the Acquired
Fund's Shareholders, will constitute a "reorganization" within the meaning
of section 368(a)(1)(C) of the Code, and each Fund will be a "party to a
reorganization" within the meaning of section 368(b) of the Code;
(b) No gain or loss will be recognized to the Acquired Fund on the
transfer of the Assets to the Acquiring Fund (except, possibly, with respect
to certain options, futures and forward contracts included in the Assets
(collectively the "Contracts")) solely in exchange for the Acquiring Fund's
Shares and the assumption by the Acquiring Fund of the Liabilities or upon
the distribution (whether actual or constructive) of the Acquiring Fund's
Shares to the Acquired Fund's Shareholders in exchange for their Acquired
Fund's Shares;
(c) The tax basis of the Assets (with the possible exception of the
Contracts) will be the same to the Acquiring Fund as the tax basis of the
Assets to the Acquired Fund immediately prior to the Reorganization, and the
holding period of the Assets (with the possible exception of the Contracts)
in the hands of the Acquiring Fund will include the period during which the
Assets were held by the Acquired Fund;
(d) No gain or loss will be recognized to the Acquiring Fund upon the
receipt of the Assets solely in exchange for the Acquiring Fund's Shares and
the assumption by the Acquiring Fund of the Liabilities;
(e) No gain or loss will be recognized to the Acquired Fund's
Shareholders upon the issuance of the Acquiring Fund's Shares to them,
provided they receive solely Acquiring Fund's Shares (including fractional
shares) in exchange for their Acquired Fund's Shares; and
(f) The aggregate tax basis of the Acquiring Fund's Shares, including
any fractional shares, received by each of the Acquired Fund's Shareholders
pursuant to the Reorganization will be the same as the aggregate tax basis
of the Acquired Fund's Shares held by such shareholder immediately prior to
the Reorganization, and the holding period of the Acquiring Fund's Shares,
including fractional shares, received by each such shareholder will include
the period during which the Acquired Fund's Shares
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exchanged therefor were held by such shareholder (provided that the Acquired
Fund's Shares were held as a capital asset on the date of the
Reorganization).
Such opinion will be based on the representations of the Corporation and the
Trust set forth herein. Notwithstanding anything herein to the contrary, neither
the Corporation nor the Trust may waive the condition set forth in this
paragraph 8.6 unless the Corporation's Board of Directors or the Trust's Board
of Trustees, as the case may be (including the Directors or the Trustees, as the
case may be, who are not "interested" persons thereof within the meaning of the
1940 Act), shall have determined that the waiver thereof would not materially
affect the shareholders of the Acquiring Fund or the Acquired Fund,
respectively; and
8.7 The Corporation and the Trust shall have received from KPMG Peat
Marwick LLP a letter addressed to each of them on behalf of the Acquiring Fund
and the Acquired Fund, respectively, dated the Closing Date, setting forth the
federal income tax implications relating to capital loss carryforwards (if any)
of the Acquired Fund and the related impact, if any, on the shareholders of the
Acquired Fund of the proposed transfer of the Assets to the Acquiring Fund and
the termination of the Acquired Fund.
9. INDEMNIFICATION
9.1 The Acquired Fund will indemnify and hold harmless the Acquiring Fund,
its Directors and its officers (for purposes of this paragraph 9.1, the
"Indemnified Parties") against any and all expenses, losses, claims, damages and
liabilities at any time imposed upon or reasonably incurred by any one or more
of the Indemnified Parities in connection with, arising out of, or resulting
from any claim, action, suit or proceeding in which any one or more of the
Indemnified Parities may be involved or with which any one or more of the
Indemnified Parties may be threatened by reason of any untrue statement or
alleged untrue statement of a material fact relating to or provided by the
Acquired Fund and contained in the Registration Statement, the Prospectus or the
Proxy Statement or any amendment or supplement to any of the foregoing, or
arising out of or based upon the omission or alleged omission to state in any of
the foregoing a material fact relating to the Acquired Fund required to be
stated therein or necessary to make the statements relating to the Acquired Fund
therein not misleading, including, without limitation, any amounts paid by any
one or more of the Indemnified Parties in a reasonable compromise or settlement
of any such claim, action, suit or proceeding, or threatened claim, action, suit
or proceeding made with the consent of the Acquired Fund. The Indemnified
Parties will notify the Acquired Fund in writing within ten days after the
receipt by any one or more of the Indemnified Parties of any notice of legal
process or any suit brought against or claim made against such Indemnified
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Parties as to any matters covered by this paragraph 9.1. The Acquired Fund shall
be entitled to participate at its own expense in the defense of any claim,
action, suit or proceeding covered by this paragraph 9.1, or, if it so elects,
to assume at its expense, by counsel satisfactory to the Indemnified Parties,
the defense of any such claim, action, suit or proceeding, and if the Acquired
Fund elects to assume such defense, the Indemnified Parties shall be entitled to
participate in the defense of any such claim, action, suit or proceeding at
their expense. The Acquired Fund's obligation under this paragraph 9.1 to
indemnify and hold harmless the Indemnified Parties shall constitute a guarantee
of payment so that the Acquired Fund will pay in the first instance any
expenses, losses, claims, damages and liabilities required to be paid by it
under this paragraph 9.1 without the necessity of the Indemnified Parties' first
paying the same.
9.2 The Acquiring Fund will indemnify and hold harmless the Acquired Fund,
its trustees and its officers (for purposes of this paragraph 9.2, the
"Indemnified Parties") against any and all expenses, losses, claims, damages and
liabilities at any time imposed upon or reasonably incurred by any one or more
of the Indemnified Parties in connection with, arising out of, or resulting from
any claim, action, suit or proceeding in which any one or more of the
Indemnified Parties may be involved or with which any one or more of the
Indemnified Parities may be threatened by reason of any untrue statement or
alleged untrue statement of a material fact relating to the Acquiring Fund
contained in the Registration Statement, the Prospectus or the Proxy Statement,
or any amendment or supplement to any thereof, or arising out of, or based upon,
the omission or alleged omission to state in any of the foregoing a material
fact relating to the Acquiring Fund required to be stated therein or necessary
to make the statements relating to the Acquiring Fund therein not misleading,
including without limitation any amounts paid by any one or more of the
Indemnified Parties in a reasonable compromise or settlement of any such claim,
action, suit or proceeding, or threatened claim, action, suit or proceeding made
with the consent of the Acquiring Fund. The Indemnified Parties will notify the
Acquiring Fund in writing within ten days after the receipt by any one or more
of the Indemnified Parties of any notice of legal process or any suit brought
against or claim made against such Indemnified Party as to any matters covered
by this paragraph 9.2. The Acquiring Fund shall be entitled to participate at
its own expense in the defense of any claim, action, suit or proceeding covered
by this paragraph 9.2, or, if it so elects, to assume at its expense, by counsel
satisfactory to the Indemnified Parties, the defense of any such claim, action,
suit or proceeding, and, if the Acquiring Fund elects to assume such defense,
the Indemnified Parties shall be entitled to participate in the defense of any
such claim, action, suit or proceeding at their own expense. The Acquiring
Fund's obligation under this paragraph 9.2 to indemnify and
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hold harmless the Indemnified Parties shall constitute a guarantee of payment so
that the Acquiring Fund will pay in the first instance any expenses, losses,
claims, damages and liabilities required to be paid by it under this paragraph
9.2 without the necessity of the Indemnified Parties' first paying the same.
10. BROKERAGE FEES AND EXPENSES.
10.1 The Corporation and the Trust each represents and warrants to the
other that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
10.2 Except as otherwise provided herein, all expenses of the transactions
contemplated by this Agreement will be borne by the Manager, whether or not the
transactions contemplated hereby are consummated. Such expenses include, without
limitation: (a) expenses incurred in connection with the entering into and the
carrying out of the provisions of this Agreement; (b) expenses associated with
the preparation and filing of the Registration Statement under the 1933 Act
covering the Acquiring Fund's Shares to be issued pursuant to the provisions of
this Agreement; (c) registration or qualification fees and expenses of preparing
and filing such forms as are necessary under applicable state securities laws to
qualify the Acquiring Fund's Shares to be issued in connection herewith in each
state in which the Acquired Fund's Shareholders are resident as of the date of
the mailing of the Proxy Statement to such shareholders; (d) postage; (e)
printing; (f) accounting fees; (g) legal fees; and (h) solicitation costs of the
transactions.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
11.1 The Corporation and the Trust agree that neither party has made any
representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
11.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
12. TERMINATION.
12.1 Prior to the Valuation Date, this Agreement may be terminated by the
Corporation or the Trust if its respective governing board shall reasonably
determine that circumstances have developed that make proceeding with the
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Reorganization undesirable. In addition, either the Corporation or the Trust may
at its option terminate this Agreement at or prior to the Closing Date because:
(a) of a material breach by the other of any representation, warranty or
agreement contained herein to be performed at or prior to the Closing Date;
or
(b) a condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it
will not or cannot be met by the Closing Date.
12.2 In the event of any such termination, there shall be no liability for
damages on the part of either the Corporation or the Trust or their respective
Directors, Trustees or officers, to the other party.
13. AMENDMENTS.
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the Trust
and the Corporation; provided, however, that following the meeting of the
Acquired Fund's Shareholders called by the Trust pursuant to paragraph 5.2 of
this Agreement, no amendment may have the effect of changing the provisions for
determining the number of the Acquiring Fund's Shares to be issued to the
Acquired Fund's Shareholders under this Agreement to the detriment of such
shareholders without their further approval.
14. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Corporation or the Trust
at 200 Park Avenue, New York, New York 10166.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1 The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
15.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts without giving effect to the
conflicts of laws provisions thereof, provided that matters relating to the due
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authorization, execution and delivery of this Agreement by the Corporation shall
be governed by and construed in accordance with the laws of the State of
Maryland without giving effect to the conflicts of laws provisions thereof.
15.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
15.5 (a) It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust personally, but bind only the trust
property of the Trust and the Acquired Fund, as provided in the Trust Agreement.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust and executed by authorized officers of the Trust on behalf
of the Acquired Fund, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Acquired Fund as
provided in the Trust Agreement.
(b) It is expressly agreed that the obligations of the Acquiring Fund
hereunder shall not be binding upon any of the Directors, shareholders,
nominees, officers, agents or employees of the Corporation personally, but bind
only the trust property of the Corporation and the Acquiring Fund, as provided
in the Articles of Incorporation of the Corporation. The execution and delivery
of this Agreement have been authorized by the Directors of the Corporation and
executed by authorized officers of the Corporation on behalf of the Acquiring
Fund, acting as such, and neither such authorization by such Directors nor such
execution and delivery by such officers shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the property of the Acquiring Fund as provided in the Articles
of Incorporation of the Corporation.
(c) It is expressly agreed that the obligations of the Acquiring Fund and of
the Acquired Fund hereunder are obligations of each such fund individually, and
shall not be binding upon any other individual, partnership, corporation, trust,
joint venture, joint stock company, association, unincorporated organization,
government agency or political subdivision thereof or other entity (each, a
"Person"), whether or not such Person is a party hereto. All liabilities of the
Acquiring Fund and of the Acquired Fund arising from the Reorganization shall
A-23
<PAGE>
<PAGE>
be payable solely from the assets and revenues of such Acquiring Fund or
Acquired Fund, as the case may be, and no Person shall have recourse therefor to
other assets or revenues of any party.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its Chairman of the Board, President or Vice President, or other
authorized officer, and its seal to be affixed hereto and attested by its
Secretary or Assistant Secretary or other authorized officer.
Attest: The Dreyfus/Laurel Funds, Inc.
By:
- -------------------------------- --------------------------------
SECRETARY
Name:
-------------------------
Title:
---------------------------
Attest: The Dreyfus/Laurel Investment Series
By:
- -------------------------------- --------------------------------
SECRETARY
Name:
-------------------------
Title:
---------------------------
A-24
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION DATED
FEBRUARY 14, 1995
ACQUISITION OF THE ASSETS OF
DREYFUS/LAUREL INTERNATIONAL FUND
OF THE DREYFUS/LAUREL INVESTMENT SERIES
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-343-6324
BY AND IN EXCHANGE FOR SHARES OF
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
OF THE DREYFUS/LAUREL FUNDS, INC.
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-343-6324
This Statement of Additional Information, relating specifically to the
proposed transfer of the assets of Dreyfus/Laurel International Fund, a separate
portfolio of The Dreyfus/Laurel Investment Series (formerly known as The Laurel
Investment Series and prior thereto as The Boston Company Investment Series) in
exchange for Investor Shares of Dreyfus International Equity Allocation Fund, a
separate series of The Dreyfus/Laurel Funds, Inc. (formerly known as The Laurel
Funds, Inc.) (the "Company") and the assumption by Dreyfus International Equity
Allocation Fund of certain identified liabilities of Dreyfus/Laurel
International Fund, is not a prospectus. A Prospectus/Proxy Statement dated
February 14, 1995 relating to the above-referenced matter may be obtained from
The Dreyfus/Laurel Funds, Inc., One Exchange Place, Boston, Massachusetts 02109.
This Statement of Additional Information relates to and should be read in
conjunction with such Prospectus/Proxy Statement. The date of this Statement of
Additional Information is February 14, 1995.
This Statement of Additional Information incorporates by reference the
following documents, a copy of each of which accompanies this Statement of
Additional Information:
1. The Prospectus of the Dreyfus International Equity Allocation Fund dated
January 5, 1995.
2. The Statement of Additional Information of Dreyfus International Equity
Allocation Fund dated January 5, 1995.
3. The Annual Report of Dreyfus International Equity Allocation Fund dated
October 31, 1994.
4. The Prospectus of Dreyfus/Laurel International Fund dated December 30,
1994.
5. Statement of Additional Information of Dreyfus/Laurel International Fund
dated December 30, 1994.
6. The Annual Report of Dreyfus/Laurel International Fund dated August 31,
1994.
The following pro forma financial information relates to Dreyfus
International Equity Allocation Fund and Dreyfus/Laurel International Fund:
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
COMMON STOCKS -- 96.9%
JAPAN -- 20.9%
2,000 0 2,000 Advantest............. $ 70,175 $ 0 $ 70,175
7,000 800 7,800 Ajinomoto Company..... 96,079 10,984 107,063
0 900 900 Asahi Chemical
Industry............. 0 7,284 7,284
0 800 800 Asahi Glass Company... 0 10,324 10,324
0 400 400 Bridgestone Company... 0 6,607 6,607
0 500 500 Canon, Inc............ 0 9,291 9,291
0 400 400 Chugai
Pharmaceutical....... 0 4,336 4,336
4,000 700 4,700 Dai-Ichi Kango Bank... 73,065 12,791 85,856
0 800 800 Dai-Nippon Printing
Company.............. 0 14,866 14,866
0 200 200 Daido Steel Company... 0 1,210 1,210
0 2,100 2,100 Daikyo Kanko.......... 0 17,084 17,084
0 400 400 Daishowa Paper
Manufacturing........ 0 3,489 3,489
0 400 400 Daiwa House Industry
Company.............. 0 5,533 5,533
0 600 600 Denki Kagaku Kogyo.... 0 2,682 2,682
4,000 1,300 5,300 Fuji Bank Ltd......... 88,751 28,855 117,606
7,000 200 7,200 Fuji Photo Film
Ltd.................. 166,873 4,770 171,643
0 800 800 Fujitsu Ltd........... 0 9,167 9,167
13,000 0 13,000 Furukawa Electric..... 89,752 0 89,752
1,000 0 1,000 Hirose Electronics.... 59,340 0 59,340
0 900 900 Hitachi Ltd........... 0 9,384 9,384
0 400 400 Honda Motor Company... 0 6,979 6,979
3,000 220 3,220 House Food Industrial
Company.............. 63,467 4,656 68,123
2,000 200 2,200 Industrial Bank of
Japan................ 61,920 6,194 68,114
0 1,700 1,700 Itochu Corporation.... 0 13,233 13,233
0 500 500 Ito-Yokado Company.... 0 27,306 27,306
0 600 600 Japan Airlines........ 0 4,646 4,646
0 600 600 Japan Energy.......... 0 2,651 2,651
0 420 420 Joyo Bank............. 0 3,686 3,686
0 1,300 1,300 Kajima Corporation.... 0 12,347 12,347
0 400 400 Kamigumi Company...... 0 4,377 4,377
</TABLE>
2
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
JAPAN -- (CONT.)
5,000 600 5,600 Kansai Electric
Power................ $ 125,903 $ 15,114 $ 141,017
0 330 330 Kandenko Company...... 0 6,030 6,030
0 2,200 2,200 Kawasaki Steel
Company.............. 0 10,311 10,311
0 1,800 1,800 Kinki Nippon Railway
Company.............. 0 15,572 15,572
0 1,000 1,000 Kirin Brewery
Company.............. 0 11,975 11,975
13,000 600 13,600 Komatsu Ltd........... 123,426 5,699 129,125
45,000 0 45,000 Konica Corporation.... 349,226 0 349,226
22,000 0 22,000 Kubota Corporation.... 168,916 0 168,916
0 200 200 Kyocera Corporation... 0 15,238 15,238
0 100 100 Kyushu Electric Power
Company.............. 0 2,519 2,519
0 200 200 Maeda Raod
Construction......... 0 3,861 3,861
0 200 200 Marudai Food
Company.............. 0 1,540 1,540
3,000 0 3,000 Marui Company......... 54,799 0 54,799
0 400 400 Matsushita Electric
Industrial........... 0 6,648 6,648
0 1,100 1,100 Mitsubishi Bank....... 0 27,595 27,595
0 200 200 Mitsubishi Trust &
Banking.............. 0 3,097 3,097
0 900 900 Mitsubishi Kasei
Company.............. 0 5,315 5,315
16,000 2,700 18,700 Mitsubishi Heavy
Industries........... 130,279 21,993 152,272
0 400 400 Mitsui & Company...... 0 3,593 3,593
0 600 600 Mitsui Trust &
Banking.............. 0 6,937 6,937
0 600 600 Mitsui Marine &
Fire................. 0 4,553 4,553
0 50 50 Nintendo Company...... 0 2,793 2,793
0 800 800 Nec Corporation....... 0 10,241 10,241
0 400 400 Nippon Light Metal
Company.............. 0 2,932 2,932
0 800 800 Nippon Oil Company.... 0 5,781 5,781
0 600 600 Nikon................. 0 6,119 6,119
0 5,100 5,100 Nippon Steel.......... 0 21,060 21,060
0 800 800 Nippon Yusen.......... 0 5,434 5,434
</TABLE>
3
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
JAPAN -- (CONT.)
10,000 0 10,000 Nomura Securities
Company.............. $ 209,494 $ 0 $ 209,494
0 600 600 Oji Paper............. 0 6,690 6,690
7,000 1,600 8,600 Sakura Bank........... 96,078 21,969 118,047
0 200 200 Sanwa Shutter
Company.............. 0 1,912 1,912
2,000 0 2,000 Sega Enterprises...... 103,818 0 103,818
0 220 220 Seven Eleven Japan.... 0 18,033 18,033
4,000 0 4,000 Shimachu Company...... 136,223 0 136,223
0 400 400 Shizuoka Bank......... 0 5,451 5,451
0 500 500 Snow Brand Milk
Products Company..... 0 4,026 4,026
0 100 100 Suny Corporation...... 0 6,101 6,101
3,000 400 3,400 Sumitomo Bank Ltd..... 56,347 7,516 63,863
0 800 800 Sumitomo Electric
Industry............. 0 11,975 11,975
6,000 0 6,000 Sumitomo Marine &
Fire................. 54,303 0 54,303
0 1,100 1,100 Sumitomo Trust &
Bank................. 0 16,012 16,012
3,000 0 3,000 Taisho Pharmaceutical
Company.............. 55,108 0 55,108
0 400 400 Taiyo Fishery
Company.............. 0 1,759 1,759
0 1,000 1,000 Takeda Chemical
Industries........... 0 12,388 12,388
6,000 800 6,800 Tokai Bank............ 74,303 9,911 84,214
0 800 800 Tokio Marine & Fire
Insurance............ 0 9,498 9,498
1,000 300 1,300 Tokyo Electric Power
Company.............. 29,309 8,796 38,105
0 1,300 1,300 Tokyu Corporation..... 0 9,126 9,126
5,000 0 5,000 Toto.................. 78,431 0 78,431
20,000 0 20,000 Toyo Kanetsu.......... 123,426 0 123,426
0 1,200 1,200 Toyobo Company........ 0 5,290 5,290
6,000 500 6,500 Toyota Motor
Company.............. 132,508 11,046 143,554
0 600 600 Ube Industries Ltd.... 0 2,571 2,571
0 200 200 Yakult Honsha......... 0 3,262 3,262
</TABLE>
4
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
JAPAN -- (CONT.)
0 500 500 Yamanouchi
Pharmaceutical
Company.............. $ 0 $ 9,859 $ 9,859
5,000 1,000 6,000 Yasuda Trust and
Banking Company...... 44,530 8,910 53,440
0 2,900 2,900 Yokogawa Electric
Corporation.......... 0 32,335 32,335
------------- ------------ -------------
2,915,849 691,118 3,606,967
------------- ------------ -------------
GERMANY -- 19.5%
650 0 650 Agiv AG............... 227,119 0 227,119
450 0 450 Allianz Worldwide AG.. 690,282 0 690,282
0 100 100 Basf AG............... 0 21,166 21,166
0 100 100 Bayer AG.............. 0 23,400 23,400
50 0 50 Bilfinger & Berger Bau
AG................... 28,226 0 28,226
50 0 50 Brau und Brunnen...... 12,461 0 12,461
100 0 100 Colonia Konzern AG.... 84,777 0 84,777
100 0 100 Continental AG........ 14,708 0 14,708
0 200 200 Daimler Benz.......... 0 102,803 102,803
0 500 500 Deutsche Bank AG...... 0 246,368 246,368
0 500 500 Dresdner Bank AG...... 0 133,823 133,823
200 0 200 Dyckerhoff AG......... 91,093 0 91,093
100 0 100 Heidelberg Zement
AG................... 83,646 0 83,646
100 0 100 Herlitz AG............ 21,477 0 21,477
200 0 200 Hochtief AG........... 122,610 0 122,610
900 0 900 Industrie-Werlke Karl
Augsburg............. 201,669 0 201,669
100 0 100 Karstadt AG........... 41,291 0 41,291
350 0 350 Kaufhof AG............ 118,687 0 118,687
700 0 700 Linde AG.............. 418,664 0 418,664
0 70 70 Mannesmann AG......... 0 18,712 18,712
150 0 150 Munchener
Ruckversicherungs.... 276,272 0 276,272
0 300 300 Rwe
Aktiengesellschaft... 0 91,964 91,964
50 0 50 Sap AG................ 32,215 0 32,215
100 0 100 Schering AG........... 66,791 0 66,791
0 200 200 Siemens AG............ 0 83,585 83,585
</TABLE>
5
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
GERMANY -- (CONT.)
0 50 50 Viag AG............... $ 0 $ 15,726 $ 15,726
110 0 110 Wella AG.............. 79,723 0 79,723
------------- ------------ -------------
2,611,711 737,547 3,349,258
------------- ------------ -------------
FRANCE -- 16.1%
650 0 650 Accor................. 77,124 0 77,124
0 200 200 Air Liquide (L')...... 0 28,197 28,197
1,100 500 1,600 Alcatel Alsthom Cie
Generale
d'Electricite........ 100,825 45,830 146,655
2,500 3,500 6,000 AXA Company........... 115,885 162,239 278,124
1,500 400 1,900 Banque Nationale de
Paris................ 74,250 19,800 94,050
0 200 200 Casino Guichard
Perrachon Et Cic..... 0 6,521 6,521
0 200 200 Carnaudmetalbox SA.... 0 7,135 7,135
0 100 100 Chargeurs............. 0 24,954 24,954
800 0 800 Cie Bancaire SA....... 77,988 0 77,988
3,600 0 3,600 Cie De Suez........... 172,188 0 172,188
0 200 200 Cie Financiale
(Paribas)............ 0 13,302 13,302
0 100 100 Compagnie Bancaire
SA................... 0 9,749 9,749
600 200 800 Compagnie de Saint
Gobain............... 76,085 25,362 101,447
1,300 500 1,800 Compagnie Financiere
de Suez.............. 86,465 23,915 110,380
0 100 100 Crecie Par Reesco NV.. 0 6,214 6,214
400 0 400 Credit Foncier de
France............... 60,744 0 60,744
3,000 0 3,000 C.S.F................. 81,387 0 81,387
0 200 200 Danone................ 0 28,158 28,158
0 400 400 Eaux (Cie Generale
Des)................. 0 36,625 36,625
400 0 400 Eiffage............... 67,968 0 67,968
0 100 100 Euro Disney SCA....... 0 138 138
0 100 100 Finextel.............. 0 1,942 1,942
0 100 100 Havas................. 0 8,329 8,329
0 200 200 Lafarge Coppee SA..... 0 15,858 15,858
400 200 600 L'Oreal Group......... 86,843 43,422 130,265
</TABLE>
6
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
FRANCE -- (CONT.)
500 200 700 LVHM Moet Hennessey... $ 80,590 $ 32,236 $ 112,826
0 100 100 Lyonausse Des Eaus
Dunez................ 0 9,088 9,088
0 200 200 Michelin (Cie Gle Des
Establ.)............. 0 8,370 8,370
800 100 900 Pechiney
International........ 60,977 3,095 64,072
0 100 100 Pernod Ricard......... 0 5,777 5,777
900 100 1,000 Peugeot SA............ 134,751 14,972 149,723
800 0 800 Pinault-Printemps
Redoute.............. 144,325 0 144,325
3,900 700 4,600 Rhone-Poulenc SA...... 96,184 17,264 113,448
200 0 200 Sagem................. 99,311 0 99,311
400 0 400 Saint Louis --
Bouchon.............. 112,632 0 112,632
0 100 100 Schneider SA.......... 0 7,515 7,515
0 100 100 Sefimeg............... 0 7,016 7,016
0 100 100 Simco-Union Pout
L'Habitation......... 0 7,913 7,913
0 200 200 Societe Generale...... 0 22,565 22,565
1,800 900 2,700 Societe National Elf
Aquitain............. 133,003 66,502 199,505
0 100 100 Sommer-Allibert....... 0 37,285 37,285
0 300 300 Thompson.............. 0 8,139 8,139
0 800 800 Total Cie Francaise
Des Petrolos, Total
'B'.................. 0 51,873 51,873
0 200 200 Unibail............... 0 17,089 17,089
0 150 150 Union Immobiliere De
France............... 0 11,797 11,797
------------- ------------ -------------
1,939,525 836,186 2,775,711
------------- ------------ -------------
GREAT BRITIAN -- 13.4%
25,000 0 25,000 Allied Irish Banks.... 102,203 0 102,203
14,000 0 14,000 Barclays Bank......... 133,927 0 133,927
0 11,000 11,000 Boots Company......... 0 95,335 95,335
18,000 0 18,000 British Petroleum
Company.............. 128,335 0 128,335
</TABLE>
7
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
GREAT BRITIAN --
(CONT.)
21,000 0 21,000 British
Telecommunications... $ 134,957 $ 0 $ 134,957
24,000 15,000 39,000 BTR................... 120,289 75,181 195,470
20,000 0 20,000 Caradon............... 86,341 0 86,341
3,700 0 3,700 Glaxo Holdings........ 36,182 0 36,182
20,000 0 20,000 Grand Metropolitan.... 135,726 0 135,726
33,000 0 33,000 Hanson Trust Plc...... 124,385 0 124,385
22,000 0 22,000 Marks & Spencer....... 148,579 0 148,579
0 12,000 12,000 National Westminster
Bank................. 0 98,508 98,508
0 19,000 19,000 Powerscreen
International........ 0 92,277 92,277
9,000 0 9,000 Reed International.... 110,674 0 110,674
0 28,000 28,000 Scapa Group........... 0 93,406 93,406
0 11,000 11,000 Severn Trent.......... 0 102,890 102,890
20,000 0 20,000 Smithkline Beecham
Group, Series A...... 133,600 0 133,600
0 26,000 26,000 Tesco................. 0 99,914 99,914
0 11,000 11,000 United Newspapers..... 0 91,377 91,377
16,000 0 16,000 Williams Holdings..... 90,528 0 90,528
6,000 0 6,000 Wolseley.............. 76,137 0 76,137
------------- ------------ -------------
1,561,863 748,888 2,310,751
------------- ------------ -------------
SWITZERLAND -- 4.7%
0 11 11 Adia.................. 0 1,946 1,946
0 3 3 Alusuisse-Lonza
Holding AG (Br)...... 0 1,489 1,489
0 7 7 Alusuisse-Lonza
Holding AG (Rcg)..... 0 3,492 3,492
200 13 213 Brown Boveri & Cie AG,
Series A............. 171,800 11,167 182,967
0 9 9 Brown Boveri & Cie AG,
Series B............. 0 1,477 1,477
0 6 6 Ciba-Geigy AG (Br).... 0 3,543 3,543
100 45 145 Ciba-Geigy AG (Reg)... 59,046 26,248 85,294
0 37 37 Credit Suisse Holdings
(Br)................. 0 16,186 16,186
200 75 275 CS Holdings (Reg)..... 87,494 6,365 93,859
</TABLE>
8
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
SWITZERLAND -- (CONT.)
0 10 10 Forbo Holdings AG
(Br)................. $ 0 $ 17,770 $ 17,770
0 3 3 Grand Magasin
Jelmoli.............. 0 383 383
0 18 18 Holderbank Financiere
Glarus............... 0 2,711 2,711
0 6 6 Holderbank Financiere
Glarus AG............ 0 4,633 4,633
0 6 6 Merkur Holdings....... 0 1,573 1,573
90 68 158 Nestle SA............. 84,195 63,614 147,809
0 2 2 Roche Holdings AG..... 0 18,009 18,009
0 12 12 Roche Holdings AG
Genuscheine NPV...... 0 53,405 53,405
50 55 105 Sandoz Group AG....... 26,097 27,435 53,532
0 27 27 SMH AG Neuenburg
(Reg)................ 0 3,550 3,550
0 6 6 SMH AG Nuenberg
(Br)................. 0 3,347 3,347
0 1 1 Schindler Holdings
AG................... 0 1,179 1,179
0 40 40 Schweizerischer
Bankverein (Br)...... 0 11,538 11,538
0 36 36 Schweizerische
Bankgesellschaft
(Br)................. 0 33,764 33,764
0 46 46 Schweizercher
Bankverein (Reg)..... 0 6,360 6,360
0 1 1 Schweiz Ruckversic
(Br)................. 0 608 608
0 22 22 Schweiz
Ruckversicherungs.... 0 13,059 13,059
0 8 8 Sika Finanz (Reg)..... 0 411 411
0 3 3 Sika Finanz AG (Br)... 0 861 861
0 2 2 Societe Generale De
Surv (Br)............ 0 2,901 2,901
0 3 3 Sulzer AG............. 0 2,117 2,117
0 1 1 Sulzer AG (PTG)....... 0 689 689
0 3 3 Swissair AG........... 0 2,042 2,042
</TABLE>
9
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
SWITZERLAND -- (CONT.)
0 38 38 Union Bank of
Switzerland.......... $ 0 $ 8,084 $ 8,084
0 15 15 Zurich Vericherungs
(Reg)................ 0 13,745 13,745
0 10 10 Zurich Vericherungs
(Br)................. 0 9,108 9,108
------------- ------------ -------------
428,632 374,809 803,441
------------- ------------ -------------
BELGIUM -- 3.2%
0 135 135 Acec Union Miniere
NPV.................. 0 11,969 11,969
0 20 20 Bekaert SA............ 0 15,503 15,503
0 20 20 CBR (Cimenteries)..... 0 7,687 7,687
0 25 25 CBR................... 0 9,407 9,407
0 279 279 Delhaize.............. 0 11,264 11,264
0 50 50 Electrabell -- Pr
Reunies.............. 0 8,979 8,979
0 314 314 Electrabell........... 0 55,780 55,780
0 500 500 Fortis................ 0 40,131 40,131
0 23 23 Gevaert Photo Prod.... 0 6,686 6,686
0 28 28 Glaverbal............. 0 4,070 4,070
0 109 109 Generale De Banque
Ordinary............. 0 26,475 26,475
0 144 144 Group Brussels Lambert
SA................... 0 17,674 17,674
0 20 20 Kredietbank AFV....... 0 4,037 4,037
0 75 75 Kredietbank........... 0 14,922 14,922
600 195 795 Petrofina SA NPV...... 184,103 59,833 243,936
0 85 85 Royale Belge.......... 0 12,711 12,711
0 25 25 Royale Belge VPV...... 0 3,650 3,650
0 50 50 Solvay Et Cie 'A'..... 0 24,749 24,749
0 25 25 Tractebel............. 0 7,824 7,824
0 60 60 Tractobel Cap......... 0 18,721 18,721
------------- ------------ -------------
184,103 362,072 546,175
------------- ------------ -------------
ITALY -- 3.0%
0 500 500 Aedes SpA di Risp..... 0 1,980 1,980
0 300 300 Aedes SpA Lig Lomb.... 0 2,204 2,204
0 900 900 Alitalia Linee Priv... 0 556 556
</TABLE>
10
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
ITALY -- (CONT.)
0 500 500 Alitalia-Linee Aeree
Italiane............. $ 0 $ 254 $ 254
0 2,200 2,200 Assicurazioni
Generali............. 0 55,077 55,077
20,000 0 20,000 Fiat SpA.............. 81,643 0 81,643
0 700 700 Bancoo Ambrosiano
Veneto............... 0 2,390 2,390
0 300 300 Bancoo Ambrosiano
Veneto di Risp....... 0 455 455
0 1,000 1,000 Banco Commerciale
Italiana SpA......... 0 2,315 2,315
0 750 750 Banco Nazionale Del
Agricoltra........... 0 654 654
0 450 450 Banco Nazionale Del
Agricoltra........... 0 878 878
0 450 450 Banco Nazionale Del
Agricoltra........... 0 222 222
0 200 200 Benetton.............. 0 2,614 2,614
0 100 100 Cartiere Burgo........ 0 620 620
0 300 300 Cementir SpA.......... 0 261 261
0 500 500 Cogefar-Impresit
Construzioni......... 0 533 533
0 1,600 1,600 Credito Italiano
SpA.................. 0 1,699 1,699
0 1,700 1,700 Dalmine SpA........... 0 389 389
0 800 800 Edison................ 0 3,423 3,423
0 100 100 Falck Acc Ferr Lamb... 0 261 261
0 9,300 9,300 Fiat SpA.............. 0 37,978 37,978
0 900 900 Fiat SpA Priv......... 0 2,177 2,177
0 700 700 Fiat SpA di Risp...... 0 1,593 1,593
0 500 500 Fidis................. 0 1,265 1,265
0 700 700 Finanziara Cirio
Bertolli De Rica
SpA.................. 0 493 493
0 600 600 Finanziaria Italgel
SpA.................. 0 609 609
0 300 300 Gildini............... 0 761 761
0 700 700 Instituto Banca San
Paolo di Torino...... 0 4,156 4,156
0 100 100 Italcementi........... 0 664 664
0 100 100 Italcementi di Risp... 0 333 333
0 600 600 Italgas............... 0 1,834 1,834
0 100 100 La Previdente......... 0 962 962
</TABLE>
11
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
ITALY -- (CONT.)
17,000 5,200 22,200 Mediobanca SpA........ $ 141,225 $ 43,214 $ 184,439
0 4,800 4,800 Montedison SpA........ 0 3,936 3,936
0 900 900 Montedison SpA di
Risp................. 0 641 641
0 1,200 1,200 Olivetti & Group SpA.. 0 1,436 1,436
0 200 200 Olivetti & Group SpA
di Risp.............. 0 189 189
0 1,100 1,100 Parmalat Finanziaria
SpA.................. 0 1,122 1,122
0 1,400 1,400 Pirelli SpA........... 0 2,076 2,076
0 200 200 Pirelli SpA di Risp... 0 242 242
0 300 300 RAS................... 0 3,746 3,746
0 300 300 RAS di Risp........... 0 2,038 2,038
0 200 200 Rinascente............ 0 1,072 1,072
0 1,000 1,000 Rinascente di Risp.... 0 2,718 2,718
0 700 700 Risanamento Napo...... 0 11,175 11,175
0 200 200 Saffa SpA, Class A.... 0 596 596
0 400 400 Saipem................ 0 855 855
0 100 100 Sasib................. 0 516 516
0 200 200 S.A.I. di Risp........ 0 1,355 1,355
0 100 100 S.A.I. (Societa
Assicuratrice
Industriale)......... 0 1,304 1,304
0 1,540 1,540 S.I.P. di Risp........ 0 3,410 3,410
0 200 200 Sirti SpA............. 0 1,346 1,346
0 500 500 S.M.E. (Meridionale
Finanziara).......... 0 1,273 1,273
0 600 600 S.M.I. (Societa Metal
Italia).............. 0 304 304
0 500 500 Snia Bpd.............. 0 628 628
0 500 500 Snia Bpd di Risp...... 0 361 361
0 400 400 Snia Bpd Risp......... 0 481 481
0 30,680 30,680 Telecom Italia SpA.... 0 84,190 84,190
------------- ------------ -------------
222,868 299,834 522,702
------------- ------------ -------------
SPAIN -- 2.8%
0 500 500 Autopista Cessa....... 0 4,156 4,156
0 1,800 1,800 Banco Bilboa Vizcaya.. 0 47,332 47,332
</TABLE>
12
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
SPAIN -- (CONT.)
0 1,300 1,300 Banco Central Hispano
Americano............ $ 0 $ 31,171 $ 31,171
0 800 800 Banco De Santander.... 0 32,546 32,546
0 300 300 Banco Espanol De
Credito.............. 0 2,062 2,062
0 50 50 Gas Natural S.D.G..... 0 4,236 4,236
3,000 900 3,900 Empresa Nacional De
Elec................. 137,633 41,290 178,923
0 3,300 3,300 Iberdrola SA.......... 0 21,760 21,760
0 1,110 1,110 Repsol SA............. 0 35,212 35,212
6,000 3,600 9,600 Telefonica Nacional
d'Espana............. 81,285 48,772 130,057
------------- ------------ -------------
218,918 268,537 487,455
------------- ------------ -------------
AUSTRIA -- 2.2%
0 100 100 Bwt Benchiser
Wassertechnik AG..... 0 15,734 15,734
0 100 100 Constantia Industry
Holdings............. 0 8,060 8,060
0 500 500 Credit Anstalt Bank... 0 30,143 30,143
0 300 300 Credit Anstalt Bank
Preferred............ 0 17,944 17,944
0 100 100 Ea Generali AG........ 0 24,568 24,568
0 100 100 Lenzing AG............ 0 10,158 10,158
0 200 200 Oesterreichische...... 0 11,433 11,433
0 600 600 Oesterreichische El
Wirtsch.............. 0 37,702 37,702
300 0 300 Oesterreichische
Landerbank........... 46,656 0 46,656
0 500 500 Omev AG............... 0 45,734 45,734
0 200 200 Radex Heraklith....... 0 7,597 7,597
0 200 200 Steyer-Daimler Puch
AG................... 0 3,723 3,723
0 100 100 Universale-Bau AG..... 0 6,690 6,690
0 200 200 Veitscher............. 0 6,312 6,312
0 100 100 Wienerberger Baust.... 0 35,434 35,434
0 900 900 Z-Laenderbank Bank
Austria.............. 0 66,332 66,332
0 100 100 Z-Landerbank.......... 0 5,036 5,036
</TABLE>
13
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
AUSTRIA -- (CONT.)
0 100 100 Z-Landerbank Austria.. $ 0 $ 3,609 $ 3,609
------------- ------------ -------------
46,656 336,209 382,865
------------- ------------ -------------
HONG KONG -- 2.1%
37,000 200 37,200 Cheung Kong
(Holdings)........... 178,117 963 179,080
0 240 240 China Light & Power... 0 1,249 1,249
0 1,100 1,100 Hang Seng Bank........ 0 7,972 7,972
48,000 0 48,000 Hong Kong & China
Gas.................. 91,000 0 91,000
0 700 700 Hong Kong Telecomm.... 0 1,499 1,499
0 2,100 2,100 HSBC Holdings......... 0 24,866 24,866
0 200 200 Hutchison Whampoa..... 0 923 923
90,000 0 90,000 South China Morning
Post Holdings........ 56,196 0 56,196
0 220 220 Sun Hung Kai
Properties........... 0 1,679 1,679
------------- ------------ -------------
325,313 39,151 364,464
------------- ------------ -------------
MALAYSIA -- 1.9%
7,000 0 7,000 Malayan Banking
Berhad............... 47,671 0 47,671
23,000 0 23,000 Resorts World Berhad.. 145,832 0 145,832
16,000 0 16,000 Telekom Malaysia
Berhad............... 129,628 0 129,628
------------- ------------ -------------
323,131 0 323,131
------------- ------------ -------------
NETHERLANDS -- 1.8%
0 100 100 Abn Amro Holdings..... 0 3,554 3,554
20,000 0 20,000 Elsevier NV........... 204,057 0 204,057
1,000 0 1,000 Internationale
Nedanden Group NV.... 46,803 0 46,803
1,000 0 1,000 Oce-Van Der Grinten
NV................... 44,430 0 44,430
0 100 100 Royal Dutch
Petroleum............ 0 11,642 11,642
------------- ------------ -------------
295,290 15,196 310,486
------------- ------------ -------------
AUSTRALIA -- 1.6%
9,000 0 9,000 Ampolex Limited....... 27,268 0 27,268
</TABLE>
14
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
AUSTRALIA -- (CONT.)
9,000 0 9,000 Amcor Limited......... $ 59,883 $ 0 $ 59,883
2,700 0 2,700 Broken Hill
Properties........... 41,424 0 41,424
30,000 0 30,000 Pacific Dunlop Ltd.... 91,117 0 91,117
17,000 0 17,000 Westpac Banking
Corporation.......... 57,188 0 57,188
------------- ------------ -------------
276,880 0 276,880
------------- ------------ -------------
FINLAND -- 1.2%
0 100 100 Amer Group, Series A.. 0 2,409 2,409
0 100 100 Cultor................ 0 3,038 3,038
0 2,800 2,800 Kansallis Osake
Pankki............... 0 5,219 5,219
0 500 500 Kesko................. 0 6,108 6,108
0 50 50 Kone Corp. Free,
Series B............. 0 5,945 5,945
0 400 400 Kymmene............... 0 10,936 10,936
0 100 100 Metra AB, Series A.... 0 3,385 3,385
0 100 100 Metra AB, Series B.... 0 3,385 3,385
0 200 200 Nokia AB.............. 0 30,075 30,075
0 100 100 Nokia................. 0 15,081 15,081
0 600 600 Outokumpu............. 0 12,694 12,694
0 100 100 Pohjola Insurance Co.,
Series A............. 0 1,606 1,606
4,000 100 4,100 Pohjola Insurance Co.,
Series B............. 58,931 1,476 60,407
0 800 800 Repola................ 0 16,751 16,751
0 100 100 Sampo, Series A....... 0 5,208 5,208
0 2,600 2,600 Unitas, Series A...... 0 7,898 7,898
0 175 175 Stockmann AB.......... 0 9,151 9,151
------------- ------------ -------------
58,931 140,365 199,296
------------- ------------ -------------
DENMARK -- 0.8%
4,000 0 4,000 Danisco............... 142,044 0 142,044
------------- ------------ -------------
SINGAPORE -- 0.7%
14,000 0 14,000 Keppel Corporation.... 128,703 0 128,703
------------- -------------
NORWAY -- 0.6%
8,500 0 8,500 Aker AS............... 99,457 0 99,457
------------- -------------
</TABLE>
15
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (CONTINUED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------ ------------------------------------------
INT'L INT'L
EQUITY PRO FORMA EQUITY PRO FORMA
ALLOCATION INT'L COMBINED SECURITY ALLOCATION INT'L COMBINED
- ----------- ---------- ----------- ---------------------- ------------- ------------ -------------
<C> <C> <C> <S> <C> <C> <C>
NEW ZEALAND -- 0.4%
23,000 0 23,000 Fisher & Paykel....... $ 60,873 $ 0 $ 60,873
------------- ------------ -------------
TOTAL COMMON STOCKS
(COST $11,802,968)... 11,840,747 4,849,912 16,690,659
------------- ------------ -------------
WARRANTS -- 0.0%
0 100 100 Euro Disney, expire
7/11/04.............. 0 11 11
0 37 37 CS Holdings Warrants
(Br)................. 0 310 310
0 75 75 CS Holdings Warrants
(Reg)................ 0 111 111
0 3 3 Grand Magasin Jelmoli
Warrants............. 0 5 5
0 48 48 Holderbank Financiere
Glarus Warrants...... 0 67 67
------------- ------------ -------------
0 504 504
------------- ------------ -------------
RIGHTS -- 0.0%
0 200 200 Air Liquide, expire
11/04/94............. 0 2,765 2,765
0 1,600 1,600 Credito Italiano di
Risp................. 0 5 5
0 1,600 1,600 Credito Italiano di
Risp, expire
11/04/94............. 0 119 119
0 500 500 Fidis, expire
11/15/94............. 0 219 219
------------- ------------ -------------
0 3,108 3,108
------------- ------------ -------------
<CAPTION>
PRINCIPAL AMOUNT
- ------------------------------------
<C> <C> <C> <S> <C> <C> <C>
COMMERCIAL PAPER --
3.1%
$ 0 $ 535,000 $ 535,000 Ford Motor Credit
Corporation, 4.72%,
due 11/01/94......... 0 535,000 535,000
------------- ------------ -------------
TOTAL INVESTMENTS
(COST $17,115,313)... $ 11,840,747 $ 5,388,524 $ 17,229,271
------------- ------------ -------------
------------- ------------ -------------
</TABLE>
16
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
PRO FORMA COMBINING STATEMENT OF
ASSETS AND LIABILITIES (UNAUDITED)
OCTOBER 31, 1994
<TABLE>
<CAPTION>
DREYFUS
INTERNATIONAL DREYFUS/ PRO
EQUITY LAUREL FORMA
ALLOCATION INTERNATIONAL COMBINED
FUND FUND (NOTE 1)
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost $11,802,968,
$5,312,345 and $17,115,313 respectively)
(Note 2)
See accompanying schedule................ $11,840,747 $ 5,388,524 $ 17,229,271
Cash and foreign currency (Cost $109,195,
$41,745 and $150,940, respectively)...... 109,546 44,541 154,087
Dividends and interest receivable......... 23,308 52,904 76,212
Receivable from investment adviser........ 130 81,412 81,542
------------- ------------- ------------
Total Assets............................ 11,973,731 5,567,381 17,541,112
------------- ------------- ------------
LIABILITIES:
Payable for investment securities
purchased................................ 29,205 0 29,205
Investment management fee payable......... 29,370 73,691 103,061
Distribution fee payable.................. 3 0 3
Accrued Directors' fees and expenses...... 396 0 396
------------- ------------- ------------
Total Liabilities....................... 58,974 73,691 132,665
------------- ------------- ------------
NET ASSETS.................................. $11,914,757 $ 5,493,690 $ 17,408,447
------------- ------------- ------------
------------- ------------- ------------
NET ASSET VALUE:
INVESTOR SHARES
Net asset value, offering and redemption
price per share ($70,750 divided by
7,035, $5,493,690 divided by 398,655, and
$5,564,440 divided by 553,127 shares of
beneficial interest outstanding)......... $10.06 $13.78 $10.06
CLASS R SHARES
Net asset value, offering and redemption
price per share ($11,844,007 divided by
1,177,712 shares of beneficial interest
outstanding)............................. $10.06 n/a $10.06
</TABLE>
See Notes to Pro Forma Financial Statements
17
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
PRO FORMA COMBINING STATEMENT OF
NET INVESTMENT INCOME (UNAUDITED)
FOR THE PERIOD ENDED OCTOBER 31, 1994
<TABLE>
<CAPTION>
DREYFUS
INTERNATIONAL DREYFUS/ PRO
EQUITY LAUREL FORMA
ALLOCATION INTERNATIONAL COMBINED
FUND* FUND** (NOTE 1)
------------- ------------- -----------
<S> <C> <C> <C>
INCOME:
Dividends (net of foreign withholding taxes
of $4,994, $647, and $5,641,
respectively)............................. $ 38,636 $ 13,731 $ 52,367
Interest................................... 35,101 6,138 41,239
TOTAL INCOME............................. 73,737 19,869 93,606
EXPENSES:
Investment management fee.................. 29,370 15,087 44,457
Directors' fees and expenses............... 396 0 396
Distribution fees.......................... 11 0 11
TOTAL EXPENSES........................... 29,777 15,087 44,864
NET INVESTMENT INCOME........................ 43,960 4,782 48,742
<FN>
- ------------------------------
* For the period from August 12, 1994 to October 31, 1994.
** For the period from September 1, 1994 to October 31, 1994.
</TABLE>
See Notes to Pro Forma Financial Statements
18
<PAGE>
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The unaudited Pro Forma Combining Portfolio of Investments and Pro Forma
Statement of Assets and Liabilities reflect the accounts of Dreyfus
International Equity Allocation ("Equity Allocation") and Dreyfus/Laurel
International Fund ("International") at October 31, 1994. The Pro Forma
Combining Statement of Net Investment Income reflects the accounts of Equity
Allocation for the period from August 12, 1994 to October 31, 1994 and the
accounts of International for the period from September 1, 1994 to October 31,
1994. These statements have been derived from the annual report of Equity
Allocation dated October 31, 1994 and from International's books and records
utilized in calculating daily net asset value at October 31, 1994.
The pro forma statements give effect to the proposed transfer of the assets
and stated liabilities of International to Equity Allocation in exchange for
shares of Equity Allocation under generally accepted accounting principles. The
historical cost of investment securities will be carried forward to the
surviving entity and the results of operations of Equity Allocation for
pre-combination periods will not be restated. The pro forma statements do not
reflect the expenses of either fund in carrying out its obligations under the
Agreement and Plan of Reorganization.
The Pro Forma Combining Portfolio of Investments, the Pro Forma Combining
Statement of Assets and Liabilities and the Pro Forma Combining Statement of Net
Investment Income should be read in conjunction with the historical financial
statements of the funds included or incorporated by reference in the Statement
of Additional Information.
2. PORTFOLIO VALUATION
Securities of both Equity Allocation and International are valued at market
value, or in the absence of a market value with respect to any portfolio
securities, at fair value as determined by or under the direction of the funds'
Board of Directors. Portfolio securities that are primarily traded on an
exchange are valued at the last sale price on that exchange or, if there were no
sales during the day, at the current quoted bid price. Short-term investments
that mature in 60 days or less are valued at amortized cost.
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional
shares of Equity Allocation which would have been issued at October 31, 1994 in
connection with the proposed reorganization. The pro forma number
19
<PAGE>
<PAGE>
of Investor Shares outstanding of 553,670 consists of 546,635 additional shares
assumed issued in the reorganization plus 7,035 shares of Equity Allocation
outstanding at October 31, 1994. The pro forma number of Class R Shares
outstanding of 1,177,712 consists of Class R shares of Equity Allocation
outstanding of at October 31, 1994.
IEA13035
20
<PAGE>
(Please Detach at Perforation Before Mailing)
--------------------------------------------------------------------------
THE DREYFUS/LAUREL INVESTMENT SERIES THIS PROXY IS SOLICITED ON BEHALF
SPECIAL MEETING OF SHAREHOLDERS - OF THE BOARD OF TRUSTEES
APRIL 19, 1995
The undersigned hereby appoints Francis P. Brennan, Steven F. Newman, and
Jeff S. Prusnofsky, and each of them, attorneys and proxies for the
undersigned, with full powers of substitution and revocation, to represent
the undersigned and to vote on behalf of the undersigned all shares of
beneficial interest of the Dreyfus/Laurel International Fund (the "Fund"),
a series of The Dreyfus/Laurel Investment Series, that the undersigned is
entitled to vote at a Special Meeting of Shareholders of the Fund to be
held at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor
West, New York, New York 10166, on April 19, 1995, at 10:00 a.m. and at
any adjournment(s) thereof. The undersigned hereby acknowledges receipt
of the Notice of Special Meeting and Proxy Statement, and hereby instructs
said attorneys and proxies to vote said shares as indicated hereon. In
their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the Meeting. A majority of the
proxies present and acting at the Meeting in person or by substitute (or,
if only one shall be so present, then that one) shall have and may
exercise all of the powers and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
PLEASE COMPLETE, SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE
DATE: , 1995
NOTE: Please sign exactly as your name or names appear
on this Proxy. If joint owners, EITHER may sign this
Proxy. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer,
please give your full title as such.
Signature(s), Title(s) if applicable
<PAGE>
VOTE THIS PROXY CARED TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
--------------------------------------------------------------------------
PLEASE INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOX BELOW AS
SHOWN, USING BLUE OR BLACK INK OR DARK PENCIL, DO NOT USE RED INK.[]
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO
BE TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION,
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL.
--------
FOR AGAINST ABSTAIN
o To approve the Agreement [] [] []
a n d P l a n o f
Reorganization with The
Dreyfus/Laurel Funds,
Inc., pursuant to which
the assets of the
Dreyfus/Laurel
International Fund will
be acquired by, and in
exchange for shares of,
the Dreyfus International
Equity Allocation Fund.
In their discretion, the proxies are, and each of them is, authorized to
vote upon any other business that may properly come before the Meeting, or
any adjournment(s) thereof, including any adjournment(s) necessary to
obtain the requisite quorums or "FOR" approvals.
PLEASE SIGN AND DATE THE REVERSE SIDE OF CARD.
<PAGE>
