<PAGE>
As filed with the Securities and Exchange Commission on February 14, 1996
Registration No. 33-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
/ / Pre-Effective Amendment No. ________
/ / Post-Effective Amendment No. ________
(Check appropriate box or boxes)
COMSTOCK PARTNERS FUNDS, INC.
(formerly known as Comstock Partners Strategy Fund, Inc.)
(Exact Name of Registrant as Specified in Charter)
(201) 332-4436
(Area Code and Telephone Number)
10 Exchange Place
Suite 2010
Jersey City, New Jersey 07302-3913
(Address of Principal Executive Offices)
Name and Address of Agent for Copies to:
Service: Gary S. Schpero, Esq.
Robert C. Ringstad Simpson Thacher & Bartlett
10 Exchange Place 425 Lexington Avenue
Suite 2010 New York, New York 10017
Jersey City, New Jersey 07302-3913
Approximate Date of Proposed Public Offering: As soon after the effective
date of this registration statement as is practicable.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
The Registrant has previously registered an indefinite number or amount of
its shares of Capital Stock, $.001 par value per share, of all series then
existing or thereafter created pursuant to Rule 24f-2 under the Investment
Company Act of 1940; accordingly, no fee is payable herewith. A Rule 24f-2
Notice for Registrant's fiscal year ended April 30, 1995 was filed on June 29,
1995.
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<PAGE>
COMSTOCK PARTNERS FUNDS, INC.
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Form N-14 Item No. Location
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Prospectus/Proxy
Statement Caption
-----------------
Part A
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Item 1. Beginning of Registration Statement Cover Page
and Outside Front Cover Page of
Prospectus
Item 2. Beginning and Outside Back Cover Table of Contents
Page of Prospectus
Item 3. Fee Table, Synopsis and Risk Factors Summary
Item 4. Information About the Transaction Summary; Reasons for the
Reorganization; Information
About the Reorganization;
Comparative Information on
Shareholder Rights; Agreement
and Plan of Reorganization and
Liquidation; Additional
Information about the Comstock
Capital Value Fund; Additional
Information about the Dreyfus
Capital Value Fund
Item 5. Information About the Registrant Summary; Comparison of
Investment Objective and
Policies; Management
Arrangements; Additional
Information About the Comstock
Capital Value Fund
Item 6. Information About the Company Summary; Comparison of
Being Acquired Investment Objective and
Policies; Management
Arrangements; Additional
Information About the Dreyfus
Capital Value Fund
Item 7. Voting Information Voting Information
Item 8. Interest of Certain Persons and Financial Statements and
Experts Experts
Item 9. Additional Information Required Not Applicable
for Reoffering by Persons Deemed
to be Underwriters
<PAGE>
Statement of Additional
Part B Information Caption
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Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. Additional Information About the Statement of Additional
Registrant Information
Item 13. Additional Information About Statement of Additional
the Company Being Acquired Information
Item 14. Financial Statements Historical Financial
Statements; The caption
"Information about the Dreyfus
Capital Value Fund" in the
Prospectus
Part C
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Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Registration Statement.
<PAGE>
PART A
PRELIMINARY COPY
DREYFUS CAPITAL VALUE FUND, INC.
200 Park Avenue
New York, New York 10166
________ __, 1996
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Dreyfus Capital Value Fund, Inc. (the "Dreyfus Capital Value Fund") to be held
on ________ __, 1996 at ___ Eastern Time, at____. At this meeting, shareholders
will be asked to consider and take action on the proposed reorganization (the
"Reorganization") of the Dreyfus Capital Value Fund into Comstock Partners
Capital Value Fund (the "Comstock Capital Value Fund"), a separate and newly-
created portfolio of Comstock Partners Funds, Inc. ("CPF").
As part of the proposed Reorganization, Comstock Partners, Inc. (currently
the sub-investment adviser to the Dreyfus Capital Value Fund) will become the
primary investment adviser for the Comstock Capital Value Fund and The Dreyfus
Corporation (currently the investment adviser to the Dreyfus Capital Value Fund)
will act as the Comstock Capital Value Fund's sub-investment adviser and
administrator. Comstock Partners, Inc. has served as sub-investment adviser to
the Dreyfus Capital Value Fund since April 1987 and has also served as
investment adviser to the Comstock Partners Strategy Fund, an existing portfolio
which, in connection with the Reorganization, will become a separate portfolio
of CPF.
In your Board of Directors' judgment, the Reorganization presents several
benefits to shareholders of the Dreyfus Capital Value Fund. Because the Dreyfus
Capital Value Fund's portfolio has been managed in accordance with Comstock
Partners, Inc.'s distinctive investment philosophy, the Reorganization and, in
particular, the new investment advisory structure, more appropriately reflects
the respective roles of Comstock Partners, Inc. and The Dreyfus Corporation in
managing the fund's portfolio. In addition, the Reorganization will bring the
portfolio under common management with the Comstock Partners Strategy Fund
(which pursues similar investment strategies to those of the Dreyfus Capital
Value Fund), providing for more focused oversight by a single Board of
Directors. Finally, by bringing your portfolio under the same umbrella as the
Comstock Partners Strategy Fund, the Reorganization may provide opportunities
for certain operating efficiencies and the reduction or elimination of certain
costs and expenses.
After careful consideration, your Board unanimously concluded, for the
reasons more fully set forth in the enclosed Prospectus/Proxy Statement, that
the proposed Reorganization is in the best interests of your fund and its
shareholders, and has recommended that the Dreyfus Capital Value Fund
shareholders vote in favor of it. The total net asset value of your holdings
immediately before and after your fund's reorganization will be the same.
Furthermore, the transaction, in the opinion of counsel, will be free from
federal income taxes to you and your fund.
A proxy card and Prospectus/Proxy Statement for the Dreyfus Capital Value
Fund is in this package. Please complete and return your proxy in the postage-
paid envelope provided for your convenience.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED. THEREFORE, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE PROPOSAL CONTAINED IN THE PROSPECTUS/PROXY STATEMENT.
Cordially,
Joseph S. DiMartino
Chairman of the Board of Directors
Dreyfus Capital Value Fund, Inc.
<PAGE>
PRELIMINARY COPY
DREYFUS CAPITAL VALUE FUND, INC.
200 Park Avenue
New York, New York 10166
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
________ __, 1996
Dear Shareholder:
A special meeting of the shareholders of Dreyfus Capital Value Fund, Inc.
(the "Dreyfus Capital Value Fund") will be held on ________ ___, 1996 at ____ at
the offices of __________________, [Address], New York, New York [zip code] for
the following purposes:
1. To consider and act upon an Agreement and Plan of Reorganization (the
"Agreement") between the Dreyfus Capital Value Fund and Comstock Partners Funds,
Inc. ("CPF") providing for the transfer of all of the assets, subject to the
liabilities, of the Dreyfus Capital Value Fund in exchange for shares of the
Comstock Partners Capital Value Fund (the "Comstock Capital Value Fund"), a
separate, newly-created portfolio of CPF, and the distribution of such shares to
the shareholders of the Dreyfus Capital Value Fund and the subsequent
dissolution of the Dreyfus Capital Value Fund; and
2. To transact such other business as may properly come before the
meeting.
The Board of Directors of the Dreyfus Capital Value Fund has recently
reviewed and unanimously endorsed the proposal set forth in the accompanying
Prospectus/Proxy Statement. Approval of the Agreement will require the
affirmative vote of the holders of at least a majority of the outstanding shares
of the Dreyfus Capital Value Fund. By approving the Agreement, the Dreyfus
Capital Value Fund shareholders will be deemed to have waived temporarily
certain of the Dreyfus Capital Value Fund's investment limitations insofar as
they might be deemed to apply to the transactions provided for therein. The
Board of Directors knows of no other business that will be acted upon at the
meeting.
Each shareholder is invited to attend the Special Meeting in person.
Shareholders of record at the close of business on ________ __, 1996 have the
right to vote at the Special Meeting.
A quorum for the Special Meeting will consist of the presence in person or
by proxy of shareholders entitled to cast one-third of the votes entitled to be
cast. In the event that a quorum is not present at the Special Meeting, or in
the event that a quorum is present but sufficient votes to approve any of the
matters to be acted upon are not received, the persons named as proxies may
propose one or more adjournments of the Special Meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those shares present or represented at the meeting in person or
by proxy. The persons named as proxies will vote those proxies which they are
entitled to vote FOR or AGAINST any such proposal in their discretion. A
shareholder vote may be taken on one or more of the matters to be acted upon as
described in the accompanying Prospectus/Proxy Statement prior to any such
adjournment if sufficient votes have been received for approval.
Detailed information about the proposed transaction and the reasons for it
are contained in the enclosed materials. Please exercise your right to vote by
attending the Special Meeting or completing, dating and signing the enclosed
proxy card. A self-addressed, postage-paid envelope has been enclosed for your
convenience. It is very important that you vote and that your voting
instructions be received prior to the Special Meeting.
<PAGE>
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, THE BOARD OF DIRECTORS
SOLICITS YOUR PROXY AND STRONGLY INVITES YOUR PARTICIPATION BY ASKING YOU TO
REVIEW, COMPLETE AND RETURN YOUR PROXY AS SOON AS POSSIBLE.
NOTE: You may receive more than one proxy package if you hold shares in
more than one account or if you own more than one class of the Dreyfus Capital
Value Fund stock. You must return separate proxy cards for separate holdings.
We have provided postage-paid return envelopes for each.
By Order of the Board of Directors
Joseph S. DiMartino
Chairman of the Board
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense involved in validating your vote if you fail
to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to a name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration. For
example:
Registration Valid Signature
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CORPORATE ACCOUNTS
(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
TRUST ACCOUNTS
(1) ABC Trust . . . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 . . . . . . . . . . . Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr., UGMA . . . John B. Smith
(2) Estate of John B. Smith. . . . . . . . John B. Smith, Jr., Executor
<PAGE>
PRELIMINARY COPY
PROSPECTUS/PROXY STATEMENT DATED ____________ __, 1996
Acquisition of the Assets of
DREYFUS CAPITAL VALUE FUND, INC.
200 Park Avenue
New York, New York 10166
(212) 922-6000
By and in Exchange for Shares of
COMSTOCK PARTNERS CAPITAL VALUE FUND,
a newly-created portfolio of
COMSTOCK PARTNERS FUNDS, INC.
10 Exchange Place
Suite 2010
Jersey City, New Jersey 07302-3913
(201) 332-4436
This Prospectus/Proxy Statement relates to the proposed transfer of all of
the assets, subject to the liabilities, of the Dreyfus Capital Value Fund, Inc.
(the "Dreyfus Capital Value Fund") to the Comstock Partners Capital Value Fund,
a separate, newly-created portfolio (the "Comstock Capital Value Fund") of
Comstock Partners Funds, Inc. ("CPF"), in exchange for shares in the Comstock
Capital Value Fund. The Comstock Capital Value Fund is an open-end,
diversified, management investment company and its investment objective is
substantially identical to that of the Dreyfus Capital Value Fund. As a result
of the proposed transaction (the "Reorganization"), each shareholder of the
Dreyfus Capital Value Fund will receive that number of shares of the Comstock
Capital Value Fund equal in net asset value at the date of the exchange to the
net asset value of such shareholder's shares of the Dreyfus Capital Value Fund
at such date. The terms and conditions of these transactions are more fully
described in this Prospectus/Proxy Statement and in the Agreement and Plan of
Reorganization between CPF and the Dreyfus Capital Value Fund attached hereto as
Exhibit A.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Comstock Capital Value
Fund that a prospective investor should know before investing. A statement of
additional information dated _________ ____, 1996 relating to this
Prospectus/Proxy Statement has been filed with the Securities and Exchange
Commission and is incorporated by reference herein. A prospectus dated
_____________ __, 1996 (the "Comstock Capital Value Fund Prospectus") and a
statement of additional information dated __________ __, 1996 (the "Comstock
Capital Value Fund Statement of Additional Information") containing additional
information about the Comstock Capital Value Fund have been filed with the
Securities and Exchange Commission and are incorporated by reference into this
Prospectus/Proxy Statement. A copy of the Comstock Capital Value Fund
Prospectus accompanies this Prospectus/Proxy Statement. The Comstock Capital
Value Fund Statement of Additional Information may be obtained without charge by
writing to CPF at the address noted above or by calling 1-800-645-6561. In
addition, a copy of the Dreyfus Capital Value Fund's prospectus (the "Dreyfus
Capital Value Fund Prospectus") and statement of additional information
dated February 1, 1996, have been filed with the Commission and may be
obtained without charge by calling 1-800-645-6561.
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.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY
REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY CPF, THE COMSTOCK CAPITAL VALUE FUND
OR THE DREYFUS CAPITAL VALUE FUND.
MUTUAL FUND SHARES ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED BY, OBLIGATIONS OF,
OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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<PAGE>
TABLE OF CONTENTS
PAGE
----
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reasons for the Reorganization . . . . . . . . . . . . . . . . . . . . . . . 11
Information About the Reorganization . . . . . . . . . . . . . . . . . . . . 11
Comparison of Investment Objective and Policies. . . . . . . . . . . . . . . 14
Management Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Comparative Information on Shareholder Rights. . . . . . . . . . . . . . . . 16
Additional Information About the Comstock Capital Value Fund . . . . . . . . 17
Additional Information About the Dreyfus Capital Value Fund. . . . . . . . . 18
Voting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Financial Statements and Experts . . . . . . . . . . . . . . . . . . . . . . 19
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXHIBIT
A -- Agreement and Plan of Reorganization between Comstock Partners
Funds, Inc. and Dreyfus Capital Value Fund, Inc.
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<PAGE>
SUMMARY
THIS SUMMARY IS QUALIFIED BY REFERENCE TO THE MORE COMPLETE INFORMATION
CONTAINED IN THIS PROSPECTUS/PROXY STATEMENT, THE DREYFUS CAPITAL VALUE FUND
PROSPECTUS AND THE AGREEMENT AND PLAN OF REORGANIZATION ATTACHED TO THIS
PROSPECTUS/PROXY STATEMENT AS EXHIBIT A. THE INFORMATION CONCERNING THE DREYFUS
CAPITAL VALUE FUND CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS/PROXY STATEMENT HAS BEEN FURNISHED BY THE DREYFUS CAPITAL VALUE FUND,
AND THE INFORMATION CONCERNING THE COMSTOCK CAPITAL VALUE FUND CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS/PROXY STATEMENT HAS BEEN FURNISHED
BY CPF.
PROPOSED TRANSACTION. The Board of Directors of the Dreyfus Capital Value
Fund (the "Dreyfus Board"), including the Directors who are not "interested
persons" of the Dreyfus Capital Value Fund (the "Independent Directors"), has
unanimously approved an Agreement and Plan of Reorganization (the "Agreement")
providing for the transfer of all of the assets, subject to the liabilities
(whether contingent or otherwise), of the Dreyfus Capital Value Fund to the
Comstock Capital Value Fund, a newly-created portfolio of CPF having an
identical investment objective to the Dreyfus Capital Value Fund, in exchange
for shares of the Comstock Capital Value Fund. (The proposed transaction is
referred to in this Prospectus/Proxy Statement as the "Reorganization".) The
Dreyfus Capital Value Fund is not aware of any contingent liabilities of the
Dreyfus Capital Value Fund that will exist at the time of consummation of the
Reorganization. In connection with the Reorganization, shares in the Comstock
Capital Value Fund will be distributed to shareholders of the Dreyfus Capital
Value Fund in liquidation of the Dreyfus Capital Value Fund. The total value of
the shares of the Comstock Capital Value Fund issued in the Reorganization shall
equal the total value of the net assets of the Dreyfus Capital Value Fund. The
number of full and fractional shares of the Comstock Capital Value Fund received
by each Dreyfus Capital Value Fund shareholder will be equal in net asset value
to the net asset value of that shareholder's shares of the Dreyfus Capital Value
Fund as of 4:00 p.m. (Eastern time) on the closing date of the Reorganization.
Pursuant to the proposed Reorganization, holders of Class A, Class B, Class C
and Class R shares of the Dreyfus Capital Value Fund will receive, respectively,
Class A, Class B, Class C and Class R shares of the Comstock Capital Value Fund.
Upon completion of such distribution, the Dreyfus Capital Value Fund will
deregister as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), by filing the appropriate application with the
Securities and Exchange Commission (the "Commission") and will also be dissolved
under state law.
The consummation of the Reorganization is contingent on the satisfaction
of the conditions described below under "Information About the Reorganization."
If the Reorganization were to have been consummated as of January 30,
1996, the approximate resulting aggregate net assets of the Comstock Capital
Value Fund would be $338,512,197.
OPERATION OF THE COMSTOCK CAPITAL VALUE FUND. Upon consummation of the
Reorganization, the Comstock Capital Value Fund will operate in a manner that is
substantially similar to the current operation of the Dreyfus Capital Value
Fund. The Comstock Capital Value Fund will be governed by the Board of
Directors and officers of CPF, while the Dreyfus Capital Value Fund's affairs
are governed by its Board of Directors and officers. As both CPF and the
Dreyfus Capital Value Fund are Maryland corporations, the responsibilities,
powers, and fiduciary duties of the directors of CPF are substantially identical
to those of the directors of the Dreyfus Capital Value Fund. However, CPF is an
open-end, management investment company of the type commonly referred to as a
"series fund", which has different classes of shares representing interests in
two separate mutual fund portfolios: Comstock Partners Strategy Fund and the
Comstock Capital Value Fund. The Dreyfus Capital Value Fund, on the other hand,
is an open-end management investment company whose shares represent interests in
a single portfolio.
CPF's directors supervise the business affairs and investments of its
portfolios, including the Comstock Capital Value Fund, which will be managed on
a daily basis by Comstock Partners, Inc. ("Comstock Partners"), the investment
adviser, and sub-advised and administered by The Dreyfus Corporation, the
sub-adviser and administrator. In contrast, The Dreyfus Corporation advises and
is responsible for certain administrative services, and Comstock Partners sub-
advises, the Dreyfus Capital Value
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<PAGE>
Fund. Premier Mutual Fund Services, Inc., the distributor for the Dreyfus
Capital Value Fund, will serve as distributor to the Comstock Capital Value
Fund. The investment objective, policies, and restrictions of the new Comstock
Capital Value Fund will be substantially similar to those of the Dreyfus Capital
Value Fund. In addition, following the proposed Reorganization, the purchase,
redemption and dividend policies of the Comstock Capital Value Fund will remain
substantially unchanged from those of the Dreyfus Capital Value Fund.
For the reasons set forth above and those set forth below under "Reasons
for the Reorganization," the Dreyfus Board, including all of the independent
Directors, has unanimously concluded that the Reorganization would be in the
best interests of the shareholders of the Dreyfus Capital Value Fund, and that
the interests of existing shareholders of the Dreyfus Capital Value Fund would
not be diluted as a result of the transactions contemplated by the
Reorganization. For all of the reasons noted, the Dreyfus Board has unanimously
recommended approval of the Reorganization.
TAX CONSEQUENCES. Prior to the consummation of the Reorganization,
Simpson Thacher & Bartlett will issue an opinion that no gain or loss will be
recognized by CPF or the Dreyfus Capital Value Fund or shareholders of the
Dreyfus Capital Value Fund for federal income tax purposes as a result of the
Reorganization. The holding period and tax basis of the shares of the Comstock
Capital Value Fund received by a shareholder of the Dreyfus Capital Value Fund
will be the same as the holding period and tax basis of the shareholder's shares
of the Dreyfus Capital Value Fund. In addition, the holding period and tax
basis of the assets of the Dreyfus Capital Value Fund transferred to the
Comstock Capital Value Fund as a result of the Reorganization will be the
holding period and tax basis of those assets in the hands of the Dreyfus Capital
Value Fund immediately prior to the Reorganization. For further information
about the tax consequences of the Reorganization, see "Information about the
Reorganization -- Federal Income Tax Consequences."
INVESTMENT OBJECTIVES AND POLICIES. Upon consummation of the
Reorganization, the investment objective, policies and restrictions of the
Comstock Capital Value Fund will be substantially similar to those of the
Dreyfus Capital Value Fund. The Comstock Capital Value Fund's investment
objective is to maximize total return, consisting of capital appreciation and
current income. The Comstock Capital Value Fund will seek to achieve its
investment objective by following an asset allocation strategy that contemplates
shifts, which may be frequent, among a wide range of investments and market
sectors. The Comstock Capital Value Fund will invest in equity securities of
domestic issuers, including common stocks, preferred stocks, convertible
securities and warrants; debt securities of domestic and foreign issuers,
including bonds, debentures and notes; and domestic and foreign money market
instruments. The Comstock Capital Value Fund may invest up to 65% of its assets
in securities of foreign issuers. The investment objective of the Comstock
Capital Value Fund is a fundamental policy and may not be changed without the
approval of the holders of a majority (as defined in the 1940 Act) of the
Comstock Capital Value Fund's outstanding voting shares. There can be no
assurance that the Comstock Capital Value Fund's objective will be achieved. For
a further comparison of the Dreyfus Capital Value Fund's and the Comstock
Capital Value Fund's investment policies and restrictions, see "Comparison of
Investment Objective and Policies."
FEES AND EXPENSES. The following table and example reflect the annual
expenses (as a percentage of average net assets) of the Dreyfus Capital Value
Fund paid for the fiscal year ended September 30, 1995 and the pro forma
expenses for the Comstock Capital Value Fund as if the Reorganization had
occurred at the commencement of the fiscal year ended September 30, 1995,
based upon the fee arrangements that will be in place upon consummation of
the Reorganization. The Comstock Capital Value Fund will not commence
operations until the consummation of the Reorganization.
- 5 -
<PAGE>
EXPENSE TABLE
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND COMSTOCK CAPITAL VALUE FUND
------------------------------------ ------------------------------------
CLASS A CLASS B CLASS C CLASS R CLASS A CLASS B CLASS C CLASS R
-------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price). . . . . . . . 4.50% None None None 4.50% None None None
Maximum Deferred Sales Charge Imposed on
Redemptions (as a percentage of the amount
subject to charge) . . . . . . . . . . . . . . . . None* 4.00% 1.00% None None* 4.00% 1.00% None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees. . . . . . . . . . . . . . . . . . .75% .75% .75% .75% .75% .75% .75% .75%
12b-1 Fees** . . . . . . . . . . . . . . . . . . . . None .75% .75% None .25% 1.00% 1.00% None
Other Expenses*** . . . . . . . . . . . . . . . . . .94% .94% .94% .69% .69% .69% .69% .69%
Total Fund Operating Expenses. . . . . . . . . . . . 1.69% 2.44% 2.44% 1.44% 1.69% 2.44% 2.44% 1.44%
<CAPTION>
CLASS A CLASS B CLASS C CLASS R CLASS A CLASS B CLASS C CLASS R
-------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EXAMPLE
- -------
You will pay the following expenses on a $1,000
investment assuming (1) 5% annual return and
(2) except where noted, redemption at the end of
each time period:
1 YEAR . . . . . . . . . . . . . . . . . . . . . . . $61 $65/$25+ $34/$25+ $15 $61 $65/$25+ $34/$25+ $15
3 YEARS. . . . . . . . . . . . . . . . . . . . . . . $96 $106/$76+ $76 $46 $96 $106/$76+ $76 $46
5 YEARS. . . . . . . . . . . . . . . . . . . . . . . $133 $150/$130+ $130 $79 $133 $150/$130+ $130 $79
10 YEARS . . . . . . . . . . . . . . . . . . . . . . $236 $242++ $278 $172 236 $278++ $378 $172
</TABLE>
* A contingent deferred sales charge of 1.00% may be assessed on certain
redemptions of Class A shares purchased without an initial sales charge as
part of an investment of $1 million or more.
** Includes service and distribution fees payable, in the case of the Dreyfus
Capital Value Fund, pursuant to a Class B and C Distribution Plan, and, in
the case of the Comstock Capital Value Fund, pursuant to Class A, Class B
and Class C Service and Distribution Plans. See "Summary-Distribution and
Shareholder Servicing Arrangements."
*** "Other Expenses" includes custodial and transfer agency fees, certain
shareholder administrative fees, insurance, legal and accounting fees,
printing and mailing costs, registration fees, interest expense and
dividends on securities sold short, and fees payable to directors
who are not affiliated with the Investment Adviser, the Sub-Investment
Adviser or the Distributor.
+ Assuming no redemption of shares.
++ Ten-year figures assume conversion of Class B shares to Class A shares at
end of sixth year following the date of purchase.
- 6 -
<PAGE>
The purpose of the foregoing table and example is to assist investors in
understanding the various costs and expenses that an investor in the Dreyfus
Capital Value Fund or the Comstock Capital Value Fund has borne or will bear,
whether directly or indirectly, the payment of which will reduce investors'
investment return on an annual basis. The information in the foregoing table
does not reflect any fee waivers or expensive reimbursement arrangements that
may be in effect. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE DREYFUS
CAPITAL VALUE FUND'S AND THE COMSTOCK CAPITAL VALUE FUND'S PERFORMANCE WILL
VARY AND MAY RESULT IN A RETURN GREATER OR LESS THAN 5%.
The aggregate contractual rates payable by the Comstock Capital
Value Fund for investment advisory services and administrative services are
the same as the aggregate rates payable for such services by the Dreyfus
Capital Value Fund. Pursuant to the Investment Advisory Agreement, CPF, on
behalf of the Comstock Capital Value Fund, will pay Comstock Partners for its
services as investment adviser an annual fee computed daily and paid monthly
at the following annual rate: .40 of 1% of the first $300 million of the
Comstock Capital Value Fund's average daily net assets, .45 of 1% of the
Comstock Capital Value Fund's average daily net assets between $300 million
and $750 million, .50 of 1% of the Comstock Capital Value Fund's average daily
net assets between $750 million and $1 billion and .55 of 1% of the Comstock
Capital Value Fund's average daily net assets in excess of $1 billion.
In addition, pursuant to the Sub-Investment Advisory and Administration
Agreement, CPF, on behalf of the Comstock Capital Value Fund, will pay The
Dreyfus Corporation an annual fee computed daily and paid monthly at the
following annual rate: .35 of 1% of the first $300 million of the Comstock
Capital Value Fund's average daily net assets, .30 of 1% of the Comstock
Capital Value Fund's average daily net assets between $300 million and $750
million, .25 of 1% of the Comstock Capital Value Fund's average daily net
assets between $750 million and $1 billion and .20 of 1% of the Comstock
Capital Value Fund's average daily net assets in excess of $1 billion. For a
more extensive discussion of these agreements, see "Information about the
Reorganization--Investment Adviser and Sub-Investment Adviser."
In comparison, the fee currently payable for investment advisory
services by the Dreyfus Capital Value Fund pursuant to its Investment Advisory
Agreement with The Dreyfus Corporation is an annual fee paid monthly at the
following annual rate: .60 of 1% of the first $25 million of the Dreyfus
Capital Value Fund's average daily net assets, .50 of 1% of the Dreyfus
Capital Value Fund's average daily net assets between $25 million and $75
million, .45 of 1% of the Dreyfus Capital Value Fund's average daily net
assets between $75 million and $200 million, .40 of 1% of the Dreyfus Capital
Value Fund's average daily net assets between $200 million and $300 million
and .375 of 1% of the Dreyfus Capital Value Fund's average daily net assets in
excess of $300 million.
In addition, pursuant to a sub-investment advisory agreement with
Comstock Partners, the Dreyfus Capital Value Fund agreed to pay Comstock
Partners an annual fee, paid monthly at the following annual rate: .15 of 1%
of the first $25 million of the Dreyfus Capital Value Fund's average daily net
assets, .25 of 1% of the Dreyfus Capital Value Fund's average daily net assets
between $25 million and $75 million, .30 of 1% of the Dreyfus Capital Value
Fund's average daily net assets between $75 million and $200 million, .35 of
1% of the Dreyfus Capital Value Fund's average daily net assets between $200
million and $300 million and .375 of 1% of the Dreyfus Capital Value Fund's
average daily net assets in excess of $300 million.
The aggregate service and distribution fees payable by the various
classes of the Comstock Capital Value Fund will be identical to those borne by
the corresponding classes of the Dreyfus Capital Value Fund, although certain
differences exist in the structure of the relevant distribution and service
plans. Class A shares of Comstock Capital Value Fund bear a service and
distribution fee at an annual rate of .25% of the value of average daily net
assets. By comparison, Class A shares of Dreyfus Capital Value Fund bear
service fees at an annual rate of .25% of the value of average daily net
assets and no distribution fees. Class B and Class C shares of Comstock
Capital Value Fund, like Class B and C shares of Dreyfus Capital Value Fund,
bear distribution fees at an annual rate of .75% of average daily net assets
and service fees at an annual rate of .25% of average daily net assets. Class
R shares of Comstock Capital Value Fund and Dreyfus Capital Value Fund bear no
service or distribution fees. For further information, see "Distribution and
Shareholder Servicing Arrangements" below.
- 7 -
<PAGE>
In addition to the fees described above, each of the Dreyfus Capital
Value Fund and the Comstock Capital Value Fund bears certain additional fees
and expenses relating to, among other things, custody, transfer agency,
printing and audit, legal and other professional services.
PURCHASE AND REDEMPTION. Under the proposed Reorganization, the
purchase and redemption arrangements for the Comstock Capital Value Fund will
be substantially identical to those of Dreyfus Capital Value Fund. Class A
shares, Class B shares and Class C shares of both the Dreyfus Capital Value
Fund and Comstock Capital Value Fund may be purchased only by clients of
certain financial institutions (which may include banks), securities dealers
("Selected Dealers") and other industry professionals (collectively, "Service
Agents"), except that full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised or sub-advised by The Dreyfus
Corporation, including members of the Fund's Board, or the spouse or minor
child of any of the foregoing may purchase Class A shares directly through the
Distributor. Subsequent purchases may be sent directly to the Transfer Agent
or your Service Agent. Dreyfus Transfer, Inc., a wholly-owned subsidiary of
The Dreyfus Corporation, is the Transfer and Dividend Disbursing Agent for the
Dreyfus Capital Value Fund and the Comstock Capital Value Fund.
With respect to both the Comstock Capital Value and the Dreyfus
Capital Value Fund, Class A shares are sold at net asset value per share plus
a maximum initial sales charge of 4.50% of the public offering price imposed
at the time of purchase, which charge may be reduced or waived for certain
purchases.
Class B shares of the Comstock Capital Value Fund, as well as of the
Dreyfus Capital Value Fund, are sold at net asset value per share with no
initial sales charge at the time of purchase but are subject to a maximum 4%
contingent deferred sales charge ("CDSC"), which is assessed only upon
redemption within six years of purchase. Approximately six years after the
date of purchase, Class B shares automatically will convert to Class A shares.
Class C shares of the Comstock Capital Value Fund and the Dreyfus
Capital Value Fund are sold at net asset value per share with no initial sales
charge at the time of purchase but are subject to a 1% CDSC, which is assessed
only upon redemption of Class C shares within one year of purchase.
No initial sales charge will be imposed on Comstock Capital Value
Fund Class A shares received by Dreyfus Capital Value Fund shareholders at the
time of the Reorganization. No CDSC will be imposed on Class B shares or
Class C shares of the Dreyfus Capital Value Fund upon consummation of the
Reorganization. For purposes of calculating future CDSC rates and conversion
periods, the Comstock Capital Value Fund Class B shares and Class C shares
received by a Dreyfus Capital Value Fund shareholder at the time of the
Reorganization will be deemed to have been held since the date such
shareholder initially purchased such shares in the Dreyfus Capital Value Fund.
If a Dreyfus Capital Value Fund shareholder has signed a Letter of Intent
making such shareholder eligible for a reduced sales load, the terms of such
Letter of Intent will carry over and apply to such shareholder as a
shareholder of the Comstock Capital Value Fund. The Comstock Capital Value
Fund also offers the same Right of Accumulation with respect to purchases of
Comstock Capital Value Fund Class A shares as that offered to holders of
Dreyfus Capital Value Fund Class A shares.
Class R shares may not be purchased directly by individuals,
although eligible institutions may purchase Class R shares for certain
accounts maintained by individuals. Class R shares are sold at net asset value
per share only to institutional investors acting for themselves or in a
fiduciary, advisory, agency, custodial or similar capacity for qualified or
non-qualified employee benefit plans, including pension, profit-sharing,
SEP-IRAs and other deferred compensation plans, whether established by
corporations, partnerships, non-profit entities or state and local
governments, but not including IRAs or IRA "Rollover Accounts."
Redemption requests, with respect to the Dreyfus Capital Value Fund
as well as the Comstock Capital Value Fund, may be made at any time.
Redemption requests are transmitted to the Transfer Agent.
- 8 -
<PAGE>
Both the Dreyfus Capital Value Fund and the Comstock Capital Value Fund impose
no charges (other than any applicable CDSC) when shares are redeemed. Service
Agents may charge their clients a nominal fee for effecting redemptions of
Fund shares.
The Comstock Capital Value Fund shareholders may redeem shares of
that fund through the Transfer Agent, the Wire Redemption Privilege, the
Telephone Redemption Privilege or the TeleTransfer Privilege, as such
privileges are described in the Comstock Capital Value Fund Prospectus. The
Dreyfus Capital Value Fund currently does not offer redemption by wire and
redemption by telephone is limited to the TeleTransfer Privilege, which
allows the proceeds of redemption to be transferred to a designated bank
account.
DISTRIBUTION AND SHAREHOLDER SERVICING ARRANGEMENTS. Under the
proposed Reorganization, the distribution and shareholder servicing
arrangements for the Comstock Capital Value Fund will be substantially similar
to those of Dreyfus Capital Value Fund. The aggregate service and
distribution fees payable with respect to each class of the Comstock Partners
Strategy Fund and the Dreyfus Capital Value Fund will be identical. See
"Summary--Fees and Expenses." However, the Class A, B and C shares of the
Dreyfus Capital Value Fund are subject to a Shareholder Services Plan, which
has not been adopted pursuant to Rule 12b-1, while the Class B and C shares of
the Dreyfus Capital Value Fund are each subject to separate Service and
Distribution Plans adopted pursuant to Rule 12b-1. In contrast, the Class A,
B and C shares of the Comstock Capital Value Fund are all subject to combined
Service and Distribution Plans, which plans have been adopted pursuant to Rule
12b-1.
Premier Mutual Fund Services, Inc. acts as the distributor to the
Dreyfus Capital Value Fund and, upon the consummation of the Reorganization,
will act as the distributor to the Comstock Capital Value Fund.
EXCHANGE PRIVILEGES. Under the proposed Reorganization, exchange
privileges for the Comstock Capital Value Fund will be substantially identical
to those of Dreyfus Capital Value Fund. Subject to certain limits, the
Exchange Privilege enables a shareholder of the Dreyfus Capital Value Fund or
the Comstock Capital Value Fund to purchase, in exchange for Class A, Class B,
Class C or Class R shares of the respective funds, shares of the same class of
certain funds managed or administered by The Dreyfus Corporation, to the
extent such shares are offered for sale in the shareholders' state of
residence.
DIVIDENDS AND DISTRIBUTIONS. Under the proposed Reorganization,
the dividend and distribution policies for Comstock Capital Value Fund will
be substantially identical to those of Dreyfus Capital Value Fund. Both the
Comstock Capital Value Fund and the Dreyfus Capital Value Fund ordinarily pay
dividends from net investment income and distribute net realized securities
gains, if any, once a year, but they may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), in all events in a manner
consistent with the provisions of the 1940 Act. Neither the Dreyfus Capital
Value Fund nor the Comstock Capital Value Fund makes distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. Shareholders may choose whether to receive
dividends and distributions in cash or to reinvest in additional shares of
the same class at net asset value without a sales load. Dividends and
distributions paid in cash to retirement plans, however, may be subject to
additional tax. All expenses are accrued daily and are deducted before the
declaration of dividends. Dividends paid by each Class are calculated at the
same time and in the same manner and are of the same amount, except that the
expenses attributable solely to a particular Class are borne exclusively by
such Class.
For more complete information about the purchase, redemption,
dividend and other policies of the Dreyfus Capital Value Fund and the Comstock
Capital Value Fund, you may refer to the Comstock Capital Value Fund
Prospectus and the Dreyfus Capital Value Fund Prospectus, both of which are
incorporated by reference herein.
- 9 -
<PAGE>
RISK FACTORS. Because the investment objective, policies, and
restrictions of the Comstock Capital Value Fund are substantially similar to
those of Dreyfus Capital Value Fund, the risks associated with the particular
investment policies and strategies that Comstock Capital Value Fund and
Dreyfus Capital Value Fund are authorized to employ also are substantially
similar. Further information relating to the risks associated with an
investment in the Comstock Capital Value Fund is set forth below under
"Comparison of Investment Objectives and Policies" and under "Risk Factors" in
the Comstock Capital Value Fund Prospectus.
REASONS FOR THE REORGANIZATION
The Reorganization has been proposed by the CPF Board and the
Dreyfus Board. In determining whether to recommend approval of the
Reorganization to shareholders of Dreyfus Capital Value Fund, the Dreyfus
Board made an inquiry into a number of matters and considered the following
factors, among others: (1) the compatibility of the investment objectives,
policies, restrictions and portfolios, as well as service features available
to shareholders of the Dreyfus Capital Value Fund and the Comstock Capital
Value Fund; (2) the historical performance of the Dreyfus Capital Value Fund,
the Comstock Partners Strategy Fund (the "Strategy Fund"), a separate
portfolio of CPF, and other portfolios advised by Comstock Partners, Inc.; (3)
the terms and conditions of the Reorganization and whether the Reorganization
would result in dilution of shareholder interests; (4) costs incurred by the
Dreyfus Capital Value Fund and the Comstock Capital Value Fund as a result of
the Reorganization; (5) tax consequences of the Reorganization; and (6)
possible alternatives to the Reorganization.
In reaching the decision to recommend that the shareholders of the
Dreyfus Capital Value Fund vote to approve the Reorganization, the Dreyfus
Board concluded that the Reorganization is in the best interests of its
shareholders and would not result in the dilution of such shareholders'
interests. Their conclusion was based on a number of factors, including the
following:
In your Board of Directors' judgment, the Reorganization presents
several benefits to the Dreyfus Capital Value Fund's shareholders.
1. Because the Dreyfus Capital Value Fund's portfolio has been
managed in accordance with Comstock Partners' distinct investment
philosophy, the Reorganization and, in particular, the new
investment advisory structure, more appropriately reflect the
respective roles of Comstock Partners and The Dreyfus Corporation
in managing the portfolio.
2. The Reorganization will bring the Dreyfus Capital Value Fund
portfolio under common management with the Comstock Partners
Strategy Fund (which pursues similar investment strategies to the
Dreyfus Capital Value Fund), providing for more focused oversight
by a single Board of Directors.
3. By bringing the Dreyfus Capital Value Fund's portfolio under the
same umbrella as the Comstock Partners Strategy Fund, the
Reorganization may provide opportunities for certain operating
efficiencies and the reduction or elimination of certain costs
and expenses.
4. The operation of the Comstock Capital Value Fund will be
substantially similar to that of the Dreyfus Capital Value Fund.
The Reorganization will not change substantially the Dreyfus
Capital Value Fund's investment objectives or policies,
shareholder servicing arrangements or exchange privileges.
INFORMATION ABOUT THE REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION. The following summary of the
Agreement is qualified in its entirety by reference to the form of the
Agreement attached to this Prospectus/Proxy Statement as
- 10 -
<PAGE>
Exhibit A. The Agreement, to which CPF and the Dreyfus Capital Value Fund are
parties, provides that the Comstock Capital Value Fund will acquire all of the
assets, subject to the liabilities (whether contingent or otherwise), of the
Dreyfus Capital Value Fund in exchange for the shares of the Comstock Capital
Value Fund. Subject to the satisfaction of the conditions described below,
such acquisitions shall take place on or such later date as
may be agreed upon by the parties (the "Closing Date"). Although the
Agreement provides that the Comstock Capital Value Fund will assume all of the
liabilities of the Dreyfus Capital Value Fund, the Dreyfus Capital Value Fund
is not aware of any contingent liabilities of the Dreyfus Capital Value Fund
that will exist at the Closing Date. Pursuant to the proposed Reorganization,
holders of Class A, Class B, Class C and Class R shares of the Dreyfus Capital
Value Fund will receive, respectively, Class A, Class B, Class C and Class R
shares of the Comstock Capital Value Fund. The net asset value per share of
each class of the Comstock Capital Value Fund will be determined by dividing
the Comstock Capital Value Fund's assets attributable to such class of its
shares, less liabilities attributable to such class of its shares, by the
total number of the fund's outstanding shares of such class.
Comstock Capital Value Fund securities will be valued in accordance
with the valuation practices of CPF, which practices are described in "Net
Asset Value" of the Comstock Capital Value Fund Prospectus incorporated by
reference herein.
As promptly as practicable after the Closing Date, the Dreyfus
Capital Value Fund will liquidate and distribute PRO RATA to its shareholders
of record as of 4:00 p.m. (New York time) on the Closing Date the shares of
the Comstock Capital Value Fund received by Dreyfus Capital Value Fund in the
Reorganization, as defined in greater detail above. Such liquidation and
distribution will be accomplished by the establishment of accounts on the
share records of the Comstock Capital Value Fund in the names of the
shareholders of Dreyfus Capital Value Fund, each account representing the
respective PRO RATA number of shares of the Comstock Capital Value Fund due
the shareholder. After such distribution and the winding up of its affairs,
the Dreyfus Capital Value Fund will be deregistered as an investment company
under the 1940 Act and will be dissolved.
The Dreyfus Board has determined that the interests of existing
shareholders of the Dreyfus Capital Value Fund will not be diluted as a result
of the transactions contemplated by the Reorganization and that participation
in the Reorganization is in the best interests of the Dreyfus Capital Value
Fund's shareholders.
Certain of the existing investment limitations of the Dreyfus
Capital Value Fund that require shareholder approval for amendment prohibit
the Dreyfus Capital Value Fund from investing more than a stated percentage of
its assets in an issuer's securities. By approving the Agreement, the
shareholders of the Dreyfus Capital Value Fund will be deemed to have agreed
to waive temporarily these limitations insofar as they might be deemed to
apply to the Reorganization.
The consummation of the Reorganization is subject to the conditions
set forth in the Agreement, including that the majority of the shareholders of
the Dreyfus Capital Value Fund approve the Reorganization. The Agreement may
be terminated and the Reorganization abandoned at any time prior to the
Closing Date, before or after approval by the shareholders of the Dreyfus
Capital Value Fund, by either the Dreyfus Capital Value Fund or CPF if (i) any
material condition or covenant set forth in the Agreement has not been
fulfilled or waived by the party entitled to its benefits, (ii) there has been
a material breach by the other party or (iii) the CPF Board or the Dreyfus
Board, as the case may be, determines that proceeding with the Reorganization
is not in the best interests of that party's shareholders.
The expenses of the Reorganization will be borne equally by
The Dreyfus Corporation and Comstock Partners, Inc.
Approval of the Agreement will require the affirmative vote of the
holders of at least a majority of the outstanding shares of the Dreyfus
Capital Value Fund entitled to vote on the matter. If the Reorganization is
not approved by the shareholders of the Dreyfus Capital Value Fund or is not
consummated for any other reason, the Dreyfus Board will consider other
possible courses of action.
- 11 -
<PAGE>
THE DREYFUS CAPITAL VALUE FUND BOARD, INCLUDING THE INDEPENDENT DIRECTORS,
HAS UNANIMOUSLY RECOMMENDED APPROVAL OF THE AGREEMENT.
DESCRIPTION OF SHARES OF CPF. Shareholders of the Dreyfus Capital
Value Fund will be issued shares of the Comstock Capital Value Fund in
accordance with the procedures provided for in the Agreement as described
above. Each such share will be fully paid and non-assessable when issued with
no personal liability attaching to the ownership thereof and transferable
without restrictions and will have no preemptive or conversion rights, other
than as described in "Summary -- Purchase and Redemption." Pursuant to the
proposed Reorganization, holders of Class A, Class B, Class C and Class R
shares of the Dreyfus Capital Value Fund will receive, respectively, Class A,
Class B, Class C and Class R shares of the Comstock Capital Value Fund.
FEDERAL INCOME TAX CONSEQUENCES. As a condition to the consummation
of the Reorganization, the Dreyfus Capital Value Fund and CPF will each
receive an opinion from Simpson Thacher & Bartlett to the effect that, on the
basis of existing provisions of the Code, current administrative rules and
interpretations and court decisions, for federal income tax purposes: (1) the
Reorganization will constitute a reorganization within the meaning of
Section 368(a)(1) of the Code with respect to the Dreyfus Capital Value Fund
and the Comstock Capital Value Fund; (2) no gain or loss will be recognized by
the Dreyfus Capital Value Fund or the Comstock Capital Value Fund upon the
transfer of substantially all of the assets and liabilities, if any, of the
Dreyfus Capital Value Fund to the Comstock Capital Value Fund solely in
exchange for shares in the Comstock Capital Value Fund or upon the distribution
of such shares to the shareholders of the Dreyfus Capital Value Fund solely in
exchange for all of their shares; (3) no gain or loss will be recognized by
shareholders of the Dreyfus Capital Value Fund upon the exchange of the
Dreyfus Capital Value Fund's shares solely for shares of the Comstock Capital
Value Fund; (4) the holding period and tax basis of the Comstock Capital Value
Fund shares received by each shareholder of the Dreyfus Capital Value Fund
pursuant to the Reorganization will be the same as the holding period
(provided the shares of the Dreyfus Capital Value Fund were held as a capital
asset on the date of the Reorganization) and tax basis of the shares of the
Dreyfus Capital Value Fund held by the shareholder immediately prior to the
Reorganization; and (5) the holding period and tax basis of the assets of the
Dreyfus Capital Value Fund acquired by the Comstock Capital Value Fund will be
the same as the holding period and tax basis of those assets to the Dreyfus
Capital Value Fund immediately prior to the Reorganization. The payment by
the Dreyfus Capital Value Fund of certain expenses which are directly related
to the Reorganization will not affect such opinion. However, no opinion will
be given as to any other federal income tax consequences of the payment of
such expenses.
CAPITALIZATION. The following tables show the capitalization of the
Dreyfus Capital Value Fund and the Comstock Capital Value Fund as of January 30,
1996, and on a pro forma basis as of that date for the Reorganization
giving effect to the proposed acquisition of assets at net asset value.
- 12 -
<PAGE>
<TABLE>
<CAPTION>
DREYFUS COMSTOCK PRO FORMA FOR
CAPITAL VALUE FUND CAPITAL VALUE FUND1/ REORGANIZATION
------------------ ------------------ --------------
<S> <C> <C> <C>
Net assets (000's)
- Class A Shares $255,808 $0 $255,808
- Class B Shares 81,811 0 81,811
- Class C Shares 892 0 892
- Class R Shares 1 0 1
Net asset value per share
- Class A Shares $10.67 0 $10.67
- Class B Shares 10.52 0 10.52
- Class C Shares 10.39 0 10.39
- Class R Shares 10.66 0 10.66
Shares outstanding (000's)
- Class A Shares 23,985 0 23,985
- Class B Shares 7,775 0 7,775
- Class C Shares 86 0 86
- Class R Shares -- 0 --
</TABLE>
____________________
1/ The Comstock Capital Value Fund has been newly organized to acquire the
assets of the Dreyfus Capital Value Fund and will not commence operations
until the Closing Date.
COMPARISON OF INVESTMENT OBJECTIVE AND POLICIES
Because the Comstock Capital Value Fund has been created for the
purpose of operating as the successor to the Dreyfus Capital Value Fund in
connection with the Reorganization, the investment objective of the Comstock
Capital Value Fund and the Dreyfus Capital Value Fund is identical. In
addition, the investment policies and restrictions of the Comstock Capital
Value Fund and the Dreyfus Capital Value Fund are substantially similar.
The investment objective of the Comstock Capital Value Fund, as well
as the Dreyfus Capital Value Fund, is to maximize total return, consisting of
capital appreciation and current income. This investment objective cannot be
changed without the approval by the holders of a majority (as defined in the
1940 Act) of the respective fund's outstanding voting shares. There can be no
assurance that this investment objective will be achieved.
Both the Comstock Capital Value Fund and the Dreyfus Capital Value
Fund seek to achieve their investment objective by following an asset
allocation strategy that contemplates shifts, which may be frequent, among a
wide range of investments and market sectors. The Comstock Capital Value
Fund, like the Dreyfus Capital Value Fund, invests in equity securities of
domestic and foreign issuers, including common stocks, preferred stocks,
convertible securities and warrants; debt securities of domestic and foreign
issuers, including bonds, debentures and notes; and domestic and foreign money
market instruments.
Both the Comstock Capital Value Fund and the Dreyfus Capital Value
Fund may invest up to 65% of their assets in securities of foreign issuers.
In addition, the Comstock Capital Value Fund Prospectus has added disclosure
regarding investments in American Depositary Receipts and other types of
depositary receipts, which investments evidence ownership of underlying
securities issued by either a non-U.S. or a U.S. corporation that have been
deposited with a depositary or custodian bank. These investments share
certain characteristics similar to investing in securities of foreign issuers.
Comstock Partners, as investment adviser of the Comstock Capital
Value Fund, will have broad latitude in selecting the class of investments and
market sectors in which the Comstock Capital Value Fund
- 13 -
<PAGE>
will invest. The Dreyfus Corporation and Comstock Partners, as investment
adviser and sub-investment adviser to the Dreyfus Capital Value Fund, have
similar latitude with respect to the Dreyfus Capital Value Fund's investments.
As is the case with the Dreyfus Capital Value Fund, the Comstock
Capital Value Fund is not managed as a balanced portfolio and is not required
to maintain a portion of its investments in each of the fund's permitted
investment types at all times. Thus, during the course of a business cycle,
for example, the Comstock Capital Value Fund may invest in equity securities,
debt securities or money market instruments, or in a combination of these
classes of investments and may also engage in various investment techniques
such as leveraging, short selling, foreign exchange transactions, options and
futures transactions and the lending of portfolio securities. The asset
allocation mix for the Comstock Capital Value Fund will be determined by
Comstock Partners at any given time in light of their assessment of current
economic conditions and investment opportunities. The asset allocation mix
selected will be a primary determinant of the Comstock Capital Value Fund's
investment performance.
As is the case with the Dreyfus Capital Value Fund, the Comstock
Capital Value Fund may invest in securities issued by closed-end investment
companies which invest in securities of foreign issuers, to the extent
permitted under the 1940 Act. Additionally, the Comstock Capital Value Fund
is permitted to invest in securities of other types of investment funds,
subject to the limitations of the 1940 Act.
Both the Dreyfus Capital Value Fund and the Comstock Capital Value
Fund are authorized to use certain investment strategies commonly referred to
as derivatives for either hedging or speculative purposes. With respect to
foreign currency derivatives transactions, however, disclosure in the Comstock
Capital Value Fund Prospectus has been broadened to clarify, consistent with
the disclosure relating to other types of derivatives transactions, that the
Comstock Capital Value Fund may engage in such transactions either for hedging
or for speculative purposes.
In addition to the broad range of debt
instruments in which the Dreyfus Capital Value Fund is permitted to invest,
disclosure has been added to the prospectus of the Comstock Capital Value
Fund authorizing the investment of up to 10% of the portfolio's total assets
in stripped mortgage-backed securities issued or guaranteed by the United
States Government, its agencies or instrumentalities. Additional information
regarding such instruments, and the related risks, is included in the
Comstock Capital Value Fund Prospectus.
In contrast to the Dreyfus Capital Value Fund, which may not
purchase warrants in excess of 2% of its net assets, the Comstock Capital
Value Fund is subject to a limitation on investment in warrants of 5% of its
net assets, with no more than 2% of net assets being invested in warrants
which are not listed on the New York Stock Exchange or the American Stock
Exchange.
The Comstock Capital Value Fund and the Dreyfus Capital Value Fund
have adopted substantially identical investment restrictions. However,
several of the Dreyfus Capital Value Fund's fundamental investment
restrictions (which cannot be changed without the approval of the holders of
a majority (as defined in the 1940 Act) of such fund's outstanding shares)
have been adopted by the Comstock Capital Value Fund as restrictions which
are not fundamental. Thus, such restrictions may be changed by CPF's Board of
Directors without the consent of the Comstock Capital Value Fund's
shareholders. For more complete information regarding such investment
restrictions, you may refer to the sections entitled "Investment Restrictions"
in the Comstock Capital Value Fund Statement of Additional Information and the
Dreyfus Capital Value Fund Statement of Additional Information, both of which
are incorporated by reference herein.
MANAGEMENT ARRANGEMENTS
Comstock Partners will act as investment adviser to the Comstock
Capital Value Fund effective upon the Closing Date. Under the Investment
Advisory Agreement between Comstock Partners and CPF with respect to the
Comstock Capital Value Fund, Comstock Partners will have responsibility for
investment decisions for, and the day-to-day management of, that portfolio.
For its services under such Investment Advisory Agreement, Comstock Partners
will receive an annual fee computed daily and paid monthly at the following
annual rate: .40 of 1% of the first $300 million of the Comstock Capital
Value Fund's average daily net assets, .45 of 1% of the Comstock Capital Value
Fund's average daily net assets between $300 million and $750 million, .50 of
1% of the Comstock Capital Value Fund's average daily net assets between $750
million and $1 billion and .55 of 1% of the Comstock Capital Value Fund's
average daily net assets in excess of $1 billion. Comstock Partners has
served as sub-investment adviser to the Dreyfus Capital Value Fund since April
30, 1987 and to the Dreyfus Variable Investment Fund-Managed Assets Portfolio
since May 21, 1990. Both are diversified open-end management companies
registered under the 1940 Act with net assets as of December 31, 1995 of
approximately $317 million and $24 million, respectively. In addition,
Comstock Partners has served as investment adviser to the Comstock Partners
Strategy Fund, a non-diversified management investment company, since May 26,
1988. Comstock Partners Strategy Fund had net assets of approximately $301 as
of December 31, 1995. Comstock Partners also provides investment advisory
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<PAGE>
services through discretionary accounts having aggregate assets as of December
31, 1995 of approximately $43 million. It is the publisher of the COMSTOCK
INVESTMENT STRATEGY REVIEW and the COMSTOCK INVESTMENT STRATEGY COMMENTARY,
investment strategy publications furnished to subscribers. The principal
address of Comstock Partners is 10 Exchange Place, Suite 2010, Jersey City,
New Jersey 07302-3913.
The Investment Adviser was founded in October 1986. The principals
of the firm are Stanley D. Salvigsen and Charles L. Minter. The Comstock
Capital Value Fund's investment portfolio will be managed by the Investment
Committee of Comstock Partners, which consists of Messrs. Salvigsen and Minter.
Mr. Salvigsen began his investment career in 1964 at the Value Line
Investment Survey. He ultimately became the Managing Editor of the VALUE LINE
SPECIAL SITUATION SERVICE, a publication of the Value Line Investment Survey.
Mr. Salvigsen was an equity analyst at The Dreyfus Corporation and Oppenheimer
& Co, Inc., as well as Cyrus J. Lawrence, Inc., where he served as a vice
president and member of the Investment Policy Committee. From 1983 to 1986,
Mr. Salvigsen was the Chief Investment Strategist at Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") where he had primary
responsibility for formulating the overall investment strategy of the firm.
Mr. Minter joined Merrill Lynch in 1966 and in 1970 became a member of its New
York Institutional Sales office. From 1976 to 1986, Mr. Minter was Vice
President -- Institutional Sales at Merrill Lynch. In that capacity he
serviced institutional accounts and supervised portfolios that included
commodity and financial futures, options, foreign securities and zero coupon
bonds.
The Dreyfus Corporation will act as the sub-investment adviser and
administrator to the Comstock Capital Value Fund pursuant to a separate
Sub-Investment Advisory and Administration Agreement between CPF and The
Dreyfus Corporation. Under the Sub-Investment Advisory and Administration
Agreement, The Dreyfus Corporation will manage the short-term cash and
cash-equivalent investments of the Comstock Capital Value Fund and provide
general advice regarding economic factors and trends, including statistical
information and other factual information, and such statistical information
with respect to investments that the Comstock Capital Value Fund may hold or
contemplate purchasing as CPF, on behalf of the Comstock Capital Value Fund,
may reasonably request. In addition, The Dreyfus Corporation will provide
certain information and advice to CPF or the Comstock Capital Value Fund.
In addition, The Dreyfus Corporation, pursuant to the Sub-Investment
Advisory and Administration Agreement, has agreed to provide certain
administrative services to the Comstock Capital Value Fund, including, among
other responsibilities, supplying office facilities, statistical and research
data, data processing services, clerical, accounting and bookkeeping services,
internal auditing services, internal executive and administrative services,
and stationery and office supplies; prepare reports to the portfolio's
shareholders, tax returns, reports to and filings with state Blue Sky
authorities; calculating the net asset value of the portfolio on a daily
basis; and, subject to the supervision of the CPF's Board of Directors,
generally assisting in all aspects of the portfolio's operations (except with
respect to services provided by Comstock Partners). The Dreyfus Corporation
will sub-contract will Princeton Administrators, L.P. for certain of the
services for which the Administrator is responsible under the Sub-Investment
Advisory and Administration Agreement.
For its services under the Sub-Investment Advisory and
Administration Agreement, The Dreyfus Corporation will be entitled to receive
an annual fee computed daily and paid monthly at the following annual rate:
.35 of 1% of the first $300 million of the Comstock Capital Value Fund's
average daily net assets, .30 of 1% of the Comstock Capital Value Fund's
average daily net assets between $300 million and $750 million, .25 of 1% of
the Comstock Capital Value Fund's average daily net assets between $750
million and $1 billion and .20 of 1% of the Comstock Capital Value Fund's
average daily net assets in excess of $1 billion. Comstock Partners and The
Dreyfus Corporation may each, from time to time, voluntary waive all or a
portion of the fees payable to it under an Investment Advisory Agreement or
the Sub-Investment Advisory and Administration Agreement, as the case may be.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). The Dreyfus Corporation was formed in 1947
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<PAGE>
and, as of December 31, 1995, managed or administered approximately $81
billion in assets for more than 1.7 million investor accounts nationwide. The
principal address of The Dreyfus Corporation is 200 Park Avenue, New York, New
York 10166.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in the
United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed
approximately $209 billion in assets as of September 30, 1995, including
approximately $80 billion in mutual fund assets. As of September 30, 1995,
various subsidiaries of Mellon provided non-investment services, such as
custodial or administration services, for approximately $717 billion in assets
including approximately $55 billion in mutual fund assets.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
GENERAL. CPF and the Dreyfus Capital Value Fund are both Maryland
corporations and open-end registered investment companies. As Maryland
corporations, the operation of CPF and the Dreyfus Capital Value Fund are
governed by their respective Articles of Incorporation, as amended, their
respective By-Laws and applicable Maryland law. CPF is an open-end,
management investment company of the type commonly referred to as a "series
fund", which has different classes of shares representing interests in
separate mutual fund portfolios: the Comstock Partners Strategy Fund and the
Comstock Capital Value Fund. The Dreyfus Capital Value Fund, on the other
hand, is an open-end management investment company whose shares represent
interests in a single portfolio. Certain other differences between the two
forms of organization are summarized below.
SHARES. The number of authorized shares of common stock of the
Dreyfus Capital Value Fund is 400,000,000, par value $.01 per share.
The number of authorized shares of common stock of CPF is 1,000,000,000,
par value $.001 per share, of which 500,000,000 shares are allocated to the
Comstock Capital Value Fund. Under the Articles of Incorporation of both CPF
and the Dreyfus Capital Value Fund, the Board of Directors may, without
shareholder approval, provide for the issuance of additional sub-classes of
Common Stock of a particular class or portfolio as shall be determined by
resolution of the Board of Directors.
The Dreyfus Capital Value Fund and the Comstock Capital Value Fund
have substantially similar multiple class distribution systems. The
distribution systems are described above under "Summary--Distribution and
Shareholder Servicing Arrangements."
SHAREHOLDER MEETINGS. Neither the Dreyfus Capital Value Fund nor
CPF is required to hold annual meetings of shareholders, but are required to
hold meetings of shareholders for purposes of voting on certain matters as
required under the 1940 Act. In addition, shareholders of CPF, however, have
the right to call for a special meeting of shareholders if such a request is
made, in writing, by shareholders entitled to cast at least 10% of the votes
entitled to be cast at the meeting (or by shareholders entitled to cast at
least 10% of the Class A, Class B or Class C votes entitled to be cast with
respect to matters relating to the Class A, Class B or Class C Service and
Distribution Plans, respectively). In such cases, CPF will assist in calling
the meeting as required under the 1940 Act. Pursuant to the Dreyfus Capital
Value Fund's By-Laws, the holders of at least 10% of the shares outstanding
and entitled to vote may require the Dreyfus Capital Value Fund to hold a
special meeting of shareholders for purposes of removing a director from
office and the holders of at least 25% of such shares may require the Dreyfus
Capital Value Fund to hold a special meeting of shareholders for any other
purpose. A more complete statement of the voting rights of shareholders is
contained in the Comstock Capital Value Fund's Statement of Additional
Information.
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<PAGE>
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS. Both the
Dreyfus Capital Value Fund and CPF provide for the indemnification of their
directors and officers to the full extent permitted by Maryland General
Corporation Law.
REMOVAL OF DIRECTORS. The directors of CPF as well as of the
Dreyfus Capital Value Fund may be removed for cause or without cause by the
holders of a majority of the outstanding shares entitled to vote on the
election of directors.
The foregoing is only a summary of certain characteristics of the
operations of the Dreyfus Capital Value Fund and CPF, their Articles of
Incorporation, By-Laws and Maryland law. The foregoing is not a complete
description of the documents cited. Shareholders should refer to the
provisions of Maryland law and the documents cited directly for a more
thorough description.
ADDITIONAL INFORMATION ABOUT THE COMSTOCK CAPITAL VALUE FUND
Additional information about the operations and management of the
Comstock Capital Value Fund is included in the Comstock Capital Value Fund
Prospectus. A copy of the Comstock Capital Value Fund Prospectus has been
filed with the Securities and Exchange Commission and may be obtained without
charge by contacting CPF at 10 Exchange Place, Suite 2010, Jersey City, New
Jersey 07302 or by telephoning CPF at 203-332-4436 and is incorporated by
reference herein.
Further information about the operations and management of Comstock
Capital Value Fund is included in the Comstock Capital Value Fund Statement of
Additional Information, dated _______________, and the statement of additional
information dated ________, 1996 relating to this Prospectus/Proxy Statement,
both of which have been filed with the Securities and Exchange Commission and
may be obtained without charge by contacting CPF at 10 Exchange Place, Suite
2010, Jersey City, New Jersey 07302 or by telephoning CPF at 203-332-4436 and
are incorporated by reference herein.
Reports and other information filed by the Comstock Capital Value Fund
can be inspected and copied at the Public Reference Facilities maintained by
the Securities and Exchange Commission, located at 450 Fifth Street, N.W.,
Washington, D.C., and copies of such material can be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549 at prescribed rates.
ADDITIONAL INFORMATION ABOUT THE DREYFUS CAPITAL VALUE FUND
Information concerning the operations and management of the Dreyfus
Capital Value Fund is incorporated herein by reference from its current
prospectuses and statement of additional information, each dated February 1,
1996, copies of which may be obtained without charge by writing or calling the
Dreyfus Capital Value Fund at the address and telephone number shown on the
cover page of this Prospectus/Proxy Statement. Reports and other information
filed by the Dreyfus Capital Value Fund can be inspected and copied at the
Public Reference Facilities maintained by the Securities and Exchange
Commission, located at 450 Fifth Street, N.W., Washington, D.C., and copies of
such material can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549 at prescribed rates.
The Dreyfus Capital Value Fund will furnish, without charge, a copy of
the Dreyfus Capital Value Fund's Annual Report for the fiscal year ended
September 30, 1995 to a shareholder upon request. Such requests may be made
to the Secretary, Dreyfus Capital Value Fund, Inc., 200 Park Avenue, New York,
New York 10017 ((800) 821-2371).
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<PAGE>
VOTING INFORMATION
Proxies from the shareholders of the Dreyfus Capital Value Fund are
being solicited by the Dreyfus Board for the Special Meeting of Shareholders
to be held on ___________ __, 1996 at the offices of ______________________,
[address] New York, New York [zip code], at ____ _.M. or at such later time as
necessary by adjournment. A proxy may be revoked at any time before the
meeting by oral or written notice to the Dreyfus Capital Value Fund. Unless
revoked, all valid proxies will be voted in accordance with the specification
thereon, or in the absence of specification, for approval of the Agreement.
Approval of the Agreement will require the affirmative vote of the holders of
at least a majority of the outstanding shares of the Dreyfus Capital Value
Fund entitled to vote thereon.
Proxies are to be solicited by mail. Additional solicitations may be
made by telephone, telegram or personal contact by officers, employees or
agents of the Dreyfus Capital Value Fund. The Dreyfus Capital Value Fund has
retained _______________ to assist in the solicitation of proxies in
connection with the Reorganization. The cost of solicitation, including a fee
of $____ payable to _________________ will be borne equally by The Dreyfus
Corporation and by Comstock Partners.
Under the Agreement, shareholders of the Dreyfus Capital Value Fund will
receive shares of the Comstock Capital Value Fund with an aggregate net asset
value equal to the aggregate net asset value of the shareholder's investment
in the Dreyfus Capital Value Fund Portfolio at the effective time of the
transaction. This method of valuation is also consistent with interpretations
of Rule 22c-1 under the 1940 Act by the Commission's Division of Investment
Management. Any shareholder of the Dreyfus Capital Value Fund Portfolio may
redeem his or her shares at the then-current net asset value prior to the
Closing Date.
Shareholders of the Dreyfus Capital Value Fund of record at the close of
business on _______ __, 1996 will be entitled to vote at the Special Meeting
or any adjournment of the meeting. The holders of one-third of the shares
outstanding of the Dreyfus Capital Value Fund at the close of business on that
date present in person or represented by proxy will constitute a quorum for
the meeting; however, as noted above, the affirmative vote of at least a
majority of shares outstanding of the Dreyfus Capital Value Fund at the close
of business on that date is required to approve the Reorganization. For
purposes of determining the presence of a quorum for transacting business at
the meeting, abstentions and broker "non-votes" (that is, proxies from brokers
or nominees indicating that such persons have not received instructions from
the beneficial owners or other persons entitled to vote shares on a particular
matter with respect to which the brokers or nominees do not have discretionary
power), will be treated as shares that are present at the meeting but which
have not been voted. Abstentions and broker "non-votes" will have the effect
of a "no" vote for purposes of obtaining the requisite approval of the
Reorganization. Shareholders are entitled to one vote for each share held and
to fractional votes equal to the number of the fractional shares held. As of
[record date], as shown on the books of the Dreyfus Capital Value Fund, there
were issued and outstanding ________ shares of the Dreyfus Capital Value Fund,
including all outstanding Class A, Class B, Class C and Class R shares. The
votes of the shareholders of CPF or the Comstock Capital Value Fund are not
being solicited to approve the Reorganization, since their approval or consent
is not required with respect to the Reorganization.
The Agreement was approved for the Dreyfus Capital Value Fund by a
unanimous vote of the Dreyfus Board, including all of the Directors then
serving who were not interested persons of the Dreyfus Capital Value Fund or
CPF (other than in their capacity as Directors of CPF or the Dreyfus Capital
Value Fund, as the case may be).
As of February 12, 1995, the officers and directors of CPF as a group
owned less than 1% of any of its portfolios' outstanding shares of common
stock. In addition, as of January 17, 1996, the following entities were known
by the Dreyfus Capital Value Fund to own, of record or beneficially, 5% or
more of the Dreyfus Capital Value Fund's outstanding voting securities: Merrill
Lynch, Pierce, Fenner & Smith Incorporated was the record owner of 25.5692% of
the outstanding Class A shares, and 30.8266% of the outstanding Class B shares,
of the Dreyfus Capital Value Fund; Bell Childrens Trust was the record owner of
62.1406% and Everen Clearing Corporation was the record owner of 28.3089% of the
Dreyfus Capital Value Fund's outstanding Class C shares; and Premier Mutual Fund
Services, Inc. was the beneficial owner of 100% of the Dreyfus Capital Value
Fund's outstanding Class R shares. Each named entity has been deemed to be a
"control person" as defined in the 1940 Act. Upon consummation of the
Reorganization, these shareholders will own similar percentages of the Comstock
Capital Value Fund's oustanding classes of shares.
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<PAGE>
THE DREYFUS CAPITAL VALUE FUND BOARD, INCLUDING THE INDEPENDENT DIRECTORS, HAS
UNANIMOUSLY RECOMMENDED APPROVAL OF THE AGREEMENT.
FINANCIAL STATEMENTS AND EXPERTS
The financial statements included for the Dreyfus Capital Value Fund
incorporated by reference in this Prospectus/Proxy Statement, have been
incorporated and included herein in reliance on the reports of Ernst & Young
LLP, independent and upon the authority of said firm as experts in accounting
and auditing.
LEGAL MATTERS
Certain Maryland legal matters concerning the issuance of shares of the
Comstock Capital Value Fund will be passed upon by Venable, Baetjer and
Howard, LLP, Baltimore, Maryland.
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<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of February 9, 1996 (this
"Agreement") between DREYFUS CAPITAL VALUE FUND, INC. (the "Dreyfus Capital
Value Fund"), a Maryland corporation, and COMSTOCK PARTNERS FUNDS, INC. ("CPF"),
a Maryland corporation, on behalf of Comstock Partners Capital Value Fund (the
"Comstock Capital Value Fund"), which will be a series thereof at the Effective
Time of the Reorganization (as defined herein).
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
SECTION 1. SHAREHOLDER APPROVAL
DREYFUS CAPITAL VALUE FUND MEETING OF SHAREHOLDERS. A meeting of the
shareholders of the Dreyfus Capital Value Fund shall be called and held for the
purpose of acting upon this Agreement and the transactions contemplated herein.
CPF shall furnish to the Dreyfus Capital Value Fund such data and information
relating to CPF as shall be reasonably requested by the Dreyfus Capital Value
Fund for inclusion in the information to be furnished to such shareholders in
connection with the meeting for the purpose of acting upon this Agreement and
the transactions contemplated herein.
SECTION 2. REORGANIZATION
The transactions described in this section are hereinafter referred to as
the "Reorganization."
(a) PLAN OF REORGANIZATION AND LIQUIDATION.
(1) The Dreyfus Capital Value Fund will convey, transfer and
deliver to CPF, on behalf of the Comstock Capital Value Fund, and CPF,
on behalf of the Comstock Capital Value Fund, shall acquire, at the
closing provided for in Section 2(b) hereof (the "Closing") all of the
then existing assets of the Dreyfus Capital Value Fund. In
consideration thereof, CPF agrees at the Closing to cause the Comstock
Capital Value Fund (i) to assume and pay, to the extent that they
exist on or after the Effective Time of the Reorganization (as defined
in Section 2(b) hereof), all of the obligations and liabilities of the
Dreyfus Capital Value Fund and (ii) to issue and deliver to the
Dreyfus Capital Value Fund full and fractional shares of Class A,
Class B, Class C and Class R shares of Common Stock, par value $.001
per share, of the Comstock Capital Value Fund, equal in net asset
value on the date of the exchange to the net asset value of full and
fractional outstanding shares of Class A, Class B, Class C and Class R
<PAGE>
2
shares of Common Stock, par value $.01 per share, respectively, of the
Dreyfus Capital Value Fund. Any shares of capital stock of the
Dreyfus Capital Value Fund held in the treasury of the Dreyfus Capital
Value Fund on the Effective Time of the Reorganization (as defined in
Section 2(b) hereof) shall thereupon be retired.
(2) At the Effective Time of the Reorganization, the Dreyfus
Capital Value Fund will liquidate and distribute pro rata to the
holders of its shares as of the Effective Time of the Reorganization
the shares of the Comstock Capital Value Fund received by the Dreyfus
Capital Value Fund pursuant to this Section 2(a). Holders of Class A,
Class B, Class C and Class R shares of the Dreyfus Capital Value Fund
will receive, respectively, that number of Class A, Class B, Class C
and Class R shares of the Comstock Capital Value Fund equal in net
asset value at the date of the exchange to the net asset value of such
shareholder's shares of the Dreyfus Capital Value Fund at such date.
Such liquidation and distribution will be accompanied by the
establishment of an account on the respective share records of the
Comstock Capital Value Fund in the name of each record holder of
shares of the Dreyfus Capital Value Fund and representing the
respective PRO RATA number of shares of the Comstock Capital Value
Fund due such shareholder. Fractional shares of the Comstock Capital
Value Fund will be carried to the third decimal place. Simultaneously
with such crediting of shares of the Comstock Capital Value Fund to
the shareholders, the shares of the Dreyfus Capital Value Fund held by
such shareholders shall be cancelled.
(3) Prior to the Effective Time of the Reorganization, the
parties hereto will file Articles of Transfer in the State of Maryland
to effect the Reorganization.
(4) As soon as practicable after the Effective Time of the
Reorganization, the Dreyfus Capital Value Fund shall take all the
necessary steps under Maryland law and the Dreyfus Capital Value
Fund's Articles of Incorporation, as amended and supplemented, to
effect a complete dissolution of the Dreyfus Capital Value Fund and to
deregister the Dreyfus Capital Value Fund under the Investment Company
Act of 1940, as amended (the "Act").
(b) CLOSING AND EFFECTIVE TIME OF THE REORGANIZATION. The Closing
shall occur as of 4:00 p.m., New York City time, on the day which is the
later of (i) the day the holders of shares of the Dreyfus Capital Value
Fund approve this Agreement and (ii) Friday, May 31, 1996, or such
other day as the parties may mutually agree (the "Effective Time of the
Reorganization").
<PAGE>
3
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CPF
CPF represents and warrants on behalf of the Comstock Capital Value Fund to
the Dreyfus Capital Value Fund as follows:
(a) ORGANIZATION, EXISTENCE, ETC. CPF is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Maryland and has the power to carry on its business as it is now
being conducted. CPF has all necessary federal, state and local
authorization to own all of its properties and assets and to carry on its
business as now being conducted. Comstock Capital Value Fund is a duly
established and designated series of CPF.
(b) REGISTRATION AS INVESTMENT COMPANY. CPF is registered under the
Act as an open-end investment company of the management type; such
registration has not been revoked or rescinded and is in full force and
effect.
(c) CAPITALIZATION. CPF has 1,000,000,000 authorized shares, par
value $.001 per share, of which as of January 30, 1996 there were
outstanding 6,208,911.200 Comstock Partners Strategy Fund Class A shares,
17,349.093 Comstock Partners Strategy Fund Class C shares, and
27,212,215.215 Comstock Partners Strategy Fund Class O shares, and no
shares were held in the treasury of CPF. As of such date, there were no
outstanding shares of the Comstock Capital Value Fund. All of the
outstanding shares of CPF have been duly authorized and are validly
issued, fully paid and nonassessable. CPF does not have outstanding any
options, warrants or other rights to subscribe for or purchase any shares
of CPF, nor is there outstanding any security convertible into any shares
of CPF. Because CPF is an open-end investment company engaged in the
continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the
Reorganization.
(d) SHARES TO BE ISSUED UPON REORGANIZATION. The shares of the
Comstock Capital Value Fund to be issued in connection with the
Reorganization will be duly authorized and upon consummation of the
Reorganization will be validly issued, fully paid and nonassessable.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. CPF has the power to enter
into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by CPF's Board
of Directors and no other corporate proceedings by CPF are necessary to
authorize its officers to effectuate this Agreement and the transactions
contemplated hereby. CPF is not a party to or obligated under any charter,
by-law, indenture or contract provision or any other commitment or
obligation, or subject to any order or decree, which would be violated by
or which would prevent its execution and performance of this Agreement in
accordance with its terms.
<PAGE>
4
(f) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of CPF, threatened which would adversely
affect the Comstock Capital Value Fund's assets or business or which would
prevent or hinder consummation of the transactions contemplated hereby,
there are no facts which would form the basis for the institution of
administrative proceedings against the Comstock Capital Value Fund and, to
the knowledge of CPF, there are no regulatory investigations of the
Comstock Capital Value Fund pending or threatened.
(g) TAXES. The federal income tax returns of CPF and all other
income tax returns required to be filed by CPF, have been filed for all
taxable years to and including April 30, 1995, and all taxes payable
pursuant to such returns have been paid. To the knowledge of CPF, no such
return is under audit and no assessment has been asserted in respect of any
such return.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE DREYFUS CAPITAL VALUE FUND
The Dreyfus Capital Value Fund represents and warrants to CPF as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Dreyfus Capital Value Fund is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Maryland and has the power to carry on its
business as it is now being conducted. The Dreyfus Capital Value Fund has
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Dreyfus Capital Value
Fund is registered under the Act as an open-end diversified investment
company of the management type; such registration has not been revoked or
rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement
of additional information of the Dreyfus Capital Value Fund, each dated
February 1, 1996 and included in the Dreyfus Capital Value Fund's
registration statement on Form N-1A filed with the Commission, comply in
all material respects with the requirements of the Securities Act and the
Act, and do not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The authorized capital stock of the Dreyfus
Capital Value Fund consists of 400,000,000 shares of Common Stock, each
having a par value $.01 per share. As of January 30, 1996, there were
outstanding 23,958,332.788 Class A shares, 7,754,335.065 Class B shares,
85,844.270 Class C shares, and 96.640 Class R shares of the Dreyfus Capital
Value Fund, and no
<PAGE>
5
shares were held in the treasury of the Dreyfus Capital Value Fund. All of
the outstanding shares of the Dreyfus Capital Value Fund have been duly
authorized and are validly issued, fully paid and nonassessable. The
Dreyfus Capital Value Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any shares of the Dreyfus
Capital Value Fund, nor is there outstanding any security convertible into
any shares of the Dreyfus Capital Value Fund. Because the Dreyfus Capital
Value Fund is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares may
change prior to the Effective Time of the Reorganization.
(e) FINANCIAL STATEMENTS. The financial statements of the Dreyfus
Capital Value Fund for the year ended September 30, 1995, which have been
audited by Ernst & Young LLP (the "Dreyfus Capital Value Fund Financial
Statements"), previously delivered to CPF, fairly present the financial
position of the Dreyfus Capital Value Fund as of the date thereof, and the
results of its operations and changes in its net assets for the periods
indicated, in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS AGREEMENT. The Dreyfus Capital Value
Fund has the power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by its Board of Directors, and, except for approval by the
shareholders of the Dreyfus Capital Value Fund, no other proceedings by the
Dreyfus Capital Value Fund are necessary to authorize its officers to
effectuate this Agreement and the transactions contemplated hereby. The
Dreyfus Capital Value Fund is not a party to or obligated under any
charter, by-law, indenture or contract provision or any other commitment or
obligation, or subject to any order or decree, which would be violated by
or which would prevent its execution and performance of this Agreement in
accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Dreyfus Capital
Value Fund, whether actual or contingent and whether or not determined or
determinable, other than liabilities disclosed or provided for in the
Dreyfus Capital Value Fund Financial Statements and liabilities incurred in
the ordinary course of business subsequent to September 30, 1995 or
otherwise previously disclosed to CPF.
(h) NO MATERIAL ADVERSE CHANGE. Since September 30, 1995, there has
been no material adverse change in the financial condition, results of
operations, business, properties or assets or liabilities of the Dreyfus
Capital Value Fund.
(i) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Dreyfus Capital Value Fund, threatened
which would adversely affect the Dreyfus Capital Value Fund or its assets
or business or which would prevent or hinder consummation of the
transactions contemplated hereby. There are no facts which would form the
basis for the institution of administrative proceedings against the Dreyfus
Capital Value Fund and, to the knowledge of the
<PAGE>
6
Dreyfus Capital Value Fund, there are no regulatory investigations of the
Dreyfus Capital Value Fund pending or threatened. The Dreyfus Capital
Value Fund is not party or subject to the provisions of any order, or
judgment which would materially and adversely affect its business or its
ability to consummate the transactions contemplated herein.
(j) CONTRACTS. Except for contracts and agreements disclosed to CPF
on Schedule I hereto, under which no default exists, the Dreyfus Capital
Value Fund is not a party to or subject to any material contract, debt
instrument, plan, lease, franchise, license or permit of any kind or nature
whatsoever. As of the Effective Time of the Reorganization, the Dreyfus
Capital Value Fund will have obtained the releases described in Section
6(e) hereof and will have no liability in respect of any of the contracts
listed on Schedule I.
(k) TAXES. The federal income tax returns of the Dreyfus Capital
Value Fund and all other income tax returns required to be filed by the
Dreyfus Capital Value Fund, have been filed for all taxable years to and
including the taxable year ended September 30, 1995, and all taxes payable
pursuant to such returns have been paid. To the knowledge of the Dreyfus
Capital Value Fund, no such return is under audit and no assessment has
been asserted in respect of any such return. The Dreyfus Capital Value
Fund has qualified as a regulated investment company under the Code in
respect of each taxable year since commencement of its operations.
SECTION 5. COVENANTS OF CPF
CPF, on behalf of the Comstock Capital Value Fund, covenants to the Dreyfus
Capital Value Fund as follows:
(a) FORMATION OF COMSTOCK CAPITAL VALUE FUND; AMENDMENT OF
REGISTRATION STATEMENT ON FORM N-1A. Prior to the Effective Time of the
Reorganization, CPF will take all steps necessary to cause the formation
and registration of the Comstock Capital Value Fund, including (i) issuing
one Class A share, one Class B share, one Class C share and one Class R
share of the Comstock Capital Value Fund to Comstock Partners, Inc., Mr.
Stanley Salvigsen or Mr. Charles Minter, who upon such issuance will be the
sole shareholder of the Comstock Capital Value Fund (the "Sole
Shareholder") and (ii) filing an amendment to CPF's registration statement
on Form N-1A (the "N-1A Amendment") with the Commission relating to the
registration of shares of the Comstock Capital Value Fund. At the time the
N-1A Amendment becomes effective, the prospectus and statement of
additional information relating to the Comstock Capital Value Fund (i) will
comply in all material respects with the provisions of the Securities Act
and the rules and regulations of the Commission thereunder and (ii) will
not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing
<PAGE>
7
representation and warranty shall not apply to statements in or omissions
from the N-1A Amendment, a prospectus or a statement of additional
information made in reliance upon and in conformity with information
furnished by the Dreyfus Capital Value Fund for use in the N-1A Amendment,
prospectus or statement of additional information. The investment
objective and policies of the Comstock Capital Value Fund shall be
substantially identical to those of the Dreyfus Capital Value Fund. CPF
shall not issue any shares of the Comstock Capital Value Fund prior to the
Effective Time of the Reorganization except as contemplated by this
Agreement.
(b) REGISTRATION STATEMENT. CPF shall file with the Commission a
Registration Statement on Form N-14 (the "Registration Statement") under
the Securities Act relating to the shares of the Comstock Capital Value
Fund issuable hereunder. At the time the Registration Statement becomes
effective, the Registration Statement (i) will comply in all material
respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time the Registration
Statement becomes effective, at the time of the shareholders' meeting
referred to in Section 1 hereof, and at the Effective Time of the
Reorganization, the prospectus/proxy statement (the "Prospectus") and
statement of additional information included therein (the "Statement of
Additional Information"), as amended or supplemented by any amendments or
supplements filed by CPF, will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that none of the representations
and warranties in this subsection shall apply to statements in or omissions
from a Registration Statement, Prospectus or Statement of Additional
Information made in reliance upon and in conformity with information
furnished by the Dreyfus Capital Value Fund for use in the Registration
Statement, Prospectus or Statement of Additional Information as provided in
Section 6(b) hereof.
(c) COOPERATION IN EFFECTING REORGANIZATION. CPF agrees to use all
reasonable efforts and take such actions as may be necessary or advisable
to effectuate the Reorganization and to continue in operation thereafter,
including the obtaining of any necessary regulatory approvals.
SECTION 6. COVENANTS OF THE DREYFUS CAPITAL VALUE FUND
The Dreyfus Capital Value Fund covenants to CPF as follows:
(a) PORTFOLIO SECURITIES.
(i) With respect to the assets to be transferred in accordance with
Section 2(a), such assets shall consist of all property and assets of any
nature whatsoever,
<PAGE>
8
including, without limitation, all cash, cash equivalents, securities,
claims and receivables (including dividend and interest receivables) owned,
and any prepaid expenses shown as an asset on the Dreyfus Capital Value
Fund's books.
(ii) At lease five (5) business days prior to the Closing, the Dreyfus
Capital Value Fund will provide CPF with a list of its assets and a list of
its stated liabilities. The Dreyfus Capital Value Fund shall have the
right to sell any of the securities or other assets shown on the list of
assets prior to the Closing but will not, without the prior approval of
CPF, acquire any additional securities other than securities which the
Comstock Capital Value Fund is permitted to purchase, pursuant to its
investment objective and policies or otherwise (taking into consideration
its own portfolio composition as of such date).
(iii) The Dreyfus Capital Value Fund will prepare and deliver to CPF,
immediately prior to the Effective Time of the Reorganization, a Schedule
of Investments (the "Schedule") listing all the securities owned by the
Dreyfus Capital Value Fund as of the Effective Time of the Reorganization
and a final statement of assets and liabilities prepared in accordance with
GAAP. All securities to be listed in the Schedule as of the Effective Time
of the Reorganization will be owned by the Dreyfus Capital Value Fund free
and clear of any liens, claims, charges, options and encumbrances, except
as indicated in the Schedule, and, except as so indicated, none of such
securities is or, after the Reorganization as contemplated hereby, will be
subject to any restrictions, legal or contractual, on the disposition
thereof (including restrictions as to the public offering or sale thereof
under the Securities Act) and, except as so indicated, all such securities
are or will be readily marketable. The custodian of the Comstock Capital
Value Fund shall be given access to the portfolio securities held by the
Dreyfus Capital Value Fund for the purpose of examination no later than
five business days prior to the Closing. Such portfolio securities
(together with any cash or other assets) shall be delivered by the Dreyfus
Capital Value Fund to such custodian for the account of the Comstock
Capital Value Fund on the date of Closing, in accordance with applicable
custody provisions under the Act, and duly endorsed in proper form for
transfer in such condition as to constitute good delivery thereof. The
portfolio securities shall be accompanied by any necessary federal and
state stock transfer stamps or a check for the appropriate purchase price
of such stamps. The cash delivered shall be in any such form as is
reasonably directed by CPF or its custodian.
(b) REGISTRATION STATEMENT. In connection with the Registration
Statement, the Dreyfus Capital Value Fund will cooperate with CPF and will
furnish to CPF the information relating to the Dreyfus Capital Value Fund
required by the Securities Act and the Regulations to be set forth in the
Registration Statement (including the Prospectuses and Statements of
Additional Information). At the time the Registration Statement becomes
effective, the Registration Statement, insofar as it relates to the Dreyfus
Capital Value Fund, (i) will comply in all material respects with the
provisions of the Securities Act and the Regulations and (ii) will not
contain an untrue statement of a material fact or omit to state a
<PAGE>
9
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time the Registration
Statement becomes effective, at the time of the shareholders' meeting
referred to in Section 1 hereof and at the Effective Time of the
Reorganization, the Prospectus and Statement of Additional Information, as
amended or supplemented by any amendments or supplements filed by CPF,
insofar as they relate to the Dreyfus Capital Value Fund, will not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED, HOWEVER, that the
representations and warranties in this subsection shall apply only to
statements in or omissions from the Registration Statement, Prospectus
or Statement of Additional Information made in reliance upon and in
conformity with information furnished by the Dreyfus Capital Value Fund
for use in the Registration Statement, Prospectus or Statement of
Additional Information as provided in this Section 6(b).
(c) COOPERATION IN EFFECTING REORGANIZATION. The Dreyfus Capital
Value Fund agrees to use all reasonable efforts and take such actions as
may be necessary or advisable to effectuate the Reorganization, including
the obtaining of any necessary regulatory approvals. The Dreyfus Capital
Value Fund will assist CPF in obtaining such information as CPF reasonably
requests concerning the beneficial ownership of the shares of the Dreyfus
Capital Value Fund.
(d) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise
contemplated by this Agreement, the Dreyfus Capital Value Fund shall
conduct its business in the ordinary course until the consummation of the
Reorganization.
(e) CONTRACT RELEASES. The Dreyfus Capital Value Fund shall, prior
to the consummation of the Reorganization, obtain releases from all of the
agreements listed on Schedule I hereto, such releases to be effective as of
the Effective Time of the Reorganization. Such releases shall discharge
the Dreyfus Capital Value Fund from all liabilities or obligations
thereunder.
SECTION 7. CONDITIONS TO OBLIGATIONS OF THE DREYFUS CAPITAL VALUE FUND
The obligations of the Dreyfus Capital Value Fund hereunder with respect to
the consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) APPROVAL BY THE DREYFUS CAPITAL VALUE FUND SHAREHOLDERS. This
Agreement and the transactions contemplated by the Reorganization,
including, when necessary, a temporary amendment of the investment
restrictions that might otherwise preclude the consummation of the
Reorganization, shall have been approved by the affirmative vote of a
majority of the outstanding shares of the Dreyfus Capital Value Fund
entitled to vote in the matter.
<PAGE>
10
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. CPF shall have
complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all
material respects as of the Effective Time of the Reorganization, there
shall have been no material adverse change in the financial condition,
results of operations, business, properties or assets of CPF since October
31, 1995, and the Dreyfus Capital Value Fund shall have received a
certificate of the President of CPF satisfactory in form and substance to
the Dreyfus Capital Value Fund so stating. The Dreyfus Capital Value Fund
shall also have received certificates of Comstock Partners, Inc. to the
effect that, as of the Effective Time of the Reorganization, such entity is
not aware that any of the representations and warranties of CPF herein is
not true in all material respects.
(c) REGULATORY APPROVAL. The Registration Statement and the N-1A
Amendment shall each have been declared effective by the Commission, no
stop orders under the Securities Act pertaining thereto shall have been
issued and all approvals, registrations, and exemptions under federal and
state laws considered to be necessary shall have been obtained.
(d) TAX OPINION. As a condition to the closing, the Dreyfus Capital
Value Fund shall have received the opinion of Simpson Thacher & Bartlett
dated on or before the Effective Time of the Reorganization, addressed to
and in form and substance satisfactory to the Dreyfus Capital Value Fund,
as to certain of the federal income tax consequences under the Code of the
Reorganization, insofar as it relates to the Dreyfus Capital Value Fund and
the Comstock Capital Value Fund and to shareholders of the Dreyfus Capital
Value Fund. For purposes of rendering their opinion, Simpson Thacher &
Bartlett may rely exclusively and without independent verification, as to
factual matters, upon the statements made in this Agreement, the
prospectus/proxy statement which will be distributed to the shareholders of
the Dreyfus Capital Value Fund in connection with the Reorganization, and
upon such other written representations as the President of each of the
Dreyfus Capital Value Fund and CPF will have verified as of the Effective
Time of the Reorganization. The opinion of Simpson Thacher & Bartlett will
be to the effect that, based on the facts and assumptions stated therein,
for federal income tax purposes: (i) the Reorganization will constitute a
reorganization within the meaning of section 368(a)(1) of the Code with
respect to the Dreyfus Capital Value Fund and the Comstock Capital Value
Fund; (ii) no gain or loss will be recognized by the Dreyfus Capital Value
Fund or the Comstock Capital Value Fund upon the transfer of all the assets
and liabilities, if any, of the Dreyfus Capital Value Fund to the Comstock
Capital Value Fund solely in exchange for shares of the Comstock Capital
Value Fund or upon the distribution of the shares of the Comstock Capital
Value Fund to the holders of shares of the Dreyfus Capital Value Fund
solely in exchange for all of their shares of the Dreyfus Capital Value
Fund; (iii) no gain or loss will be recognized by shareholders of the
Dreyfus Capital Value Fund upon the exchange of such shares of Dreyfus
Capital Value Fund solely for shares of the Comstock Capital Value Fund;
(iv) the holding period and tax basis of the shares of the Comstock Capital
<PAGE>
11
Value Fund received by each holder of shares of the Dreyfus Capital Value
Fund pursuant to the Reorganization will be the same as the holding period
and tax basis of the Dreyfus Capital Value Fund Shares held by the
shareholder (provided the shares of the Dreyfus Capital Value Fund were
held as a capital asset on the date of the Reorganization) immediately
prior to the Reorganization; and (v) the holding period and tax basis of
the assets of the Dreyfus Capital Value Fund acquired by the Comstock
Capital Value Fund will be the same as the holding period and tax basis of
those assets to the Dreyfus Capital Value Fund immediately prior to the
Reorganization.
(e) OPINION OF COUNSEL. The Dreyfus Capital Value Fund shall have
received the opinion of Simpson Thacher & Bartlett as counsel for CPF,
dated the Effective Time of the Reorganization, addressed to and in form
and substance satisfactory to the Dreyfus Capital Value Fund, to the effect
that: (i) CPF is a corporation duly incorporated and validly existing
under the laws of the State of Maryland and Comstock Capital Value Fund is
a validly existing series of shares of CPF; (ii) CPF is an open-end
investment company of the management type registered under the Act; (iii)
this Agreement and the Reorganization provided for herein and the execution
of this Agreement have been duly authorized and approved by all requisite
action of CPF and this Agreement has been duly executed and delivered by
CPF on behalf of the Comstock Capital Value Fund and is a valid and binding
obligation of CPF, with respect to the Comstock Capital Value Fund,
enforceable against CPF in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and by an implied covenant of good faith and fair
dealing; (iv) the Registration Statement has been declared effective under
the Securities Act and to such counsel's knowledge after reasonable
investigation no stop order has been issued or threatened suspending its
effectiveness; (v) to such counsel's knowledge, no consent, approval, order
or other authorization of any federal or New York state or Maryland state
court or administrative or regulatory agency is required for CPF to enter
into this Agreement on behalf of Comstock Capital Value Fund or carry out
its terms that has not already been obtained, other than where the failure
to obtain any such consent, approval, order or authorization would not have
a material adverse effect on the operations of CPF, with respect to the
Comstock Capital Value Fund; (vi) to such counsel's knowledge, CPF, with
respect to the Comstock Capital Value Fund, is not in breach or violation
of any material contract to which it is a party and which is identified as
material in a certificate of CPF, which breach or violation would (a)
affect the ability of CPF to enter into this Agreement or consummate the
transactions contemplated hereby, including the Reorganization, or (b) have
a material adverse effect on the business or financial condition of CPF;
(vii) to such counsel's knowledge, no federal or New York state or Maryland
state administrative or regulatory proceeding is pending or threatened
against CPF, with respect to the Comstock Capital Value Fund which would
(a) affect the ability of CPF to enter into this Agreement or consummate
the transactions contemplated hereby, including the
<PAGE>
12
Reorganization, or (b) have a material adverse effect on the business or
financial condition of CPF; and (viii) the shares of the Comstock Capital
Value Fund to be issued in the Reorganization have been duly authorized and
upon issuance thereof in accordance with this Agreement, will be validly
issued, fully paid and nonassessable. In rendering such opinion, Simpson
Thacher & Bartlett may rely on the opinion of Maryland counsel as to
matters relating to Maryland law and Maryland state administrative
proceedings, and on certificates of officers of CPF as to factual matters.
(f) BOARD OF DIRECTORS APPROVALS. The Board of Directors of CPF
shall have taken the following action with respect to CPF or the Comstock
Capital Value Fund, as the case may be, at a meeting duly called for such
purposes:
(i) approval of the selection of Ernst & Young LLP as CPF's
independent auditors, on terms acceptable to the CPF Board of
Directors;
(ii) approval of an investment advisory agreement with Comstock
Partners, Inc. with respect to the Comstock Capital Value Fund, in
substantially in the form presented to the CPF Board of Directors and
substantially as described in the Form N-14;
(iii) approval of a sub-investment advisory and administration
agreement between CPF and The Dreyfus Corporation, substantially in
the form presented to the CPF Board of Directors and substantially as
described in the Form N-14;
(iv) approval of the application of CPF's service and
distribution plans, each pursuant to Rule 12b-1 under the Act,
substantially as described in the Form N-14;
(g) CONTRACT TERMINATIONS. The Dreyfus Capital Value Fund shall have
terminated the agreements referred to in Section 6(e) of this Agreement as
provided therein.
SECTION 8. CONDITIONS TO OBLIGATIONS OF CPF
The obligations of CPF hereunder with respect to the consummation of the
Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY SHAREHOLDERS. This Agreement and the transactions
contemplated by the Reorganization, including, when necessary, a temporary
amendment of the investment restrictions that might otherwise preclude the
consummation of the Reorganization, shall have been approved by the
affirmative vote of a majority of the outstanding shares of the Dreyfus
Capital Value Fund entitled to vote on the matter.
<PAGE>
13
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Dreyfus Capital
Value Fund shall have complied with each of its covenants contained herein,
each of the representations and warranties contained herein shall be true
in all material respects as of the Effective Time of the Reorganization,
there shall have been no material adverse change in the financial
condition, results of operations, business, properties or assets of the
Dreyfus Capital Value Fund since September 30, 1995, and CPF shall have
received a certificate of the President of the Dreyfus Capital Value Fund
satisfactory in form and substance to CPF so stating. CPF shall also have
received a certificate of The Dreyfus Corporation, in its capacity as
investment adviser to the Dreyfus Capital Value Fund, to the effect that,
as of the Effective Time of the Reorganization, such entity is not aware
that any of the representations and warranties of the Dreyfus Capital Value
Fund herein is not true in all material respects.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the
Comstock Capital Value Fund in the Reorganization shall have been approved
for acquisition by the investment adviser of the Comstock Capital Value
Fund as consistent with the investment policies of the Comstock Capital
Value Fund.
(d) REGULATORY APPROVAL. The Registration Statement and the N-1A
Amendment shall each have been declared effective by the Commission, no
stop orders under the Securities Act pertaining thereto shall have been
issued and all approvals, registrations, and exemptions under federal and
state laws considered to be necessary shall have been obtained.
(e) TAX OPINION. As a condition to the closing, CPF shall have
received the opinion of Simpson Thacher & Bartlett dated on or before the
Effective Time of the Reorganization, addressed to and in form and
substance satisfactory to CPF, as to certain of the federal income tax
consequences under the Code of the Reorganization insofar as it relates to
the Dreyfus Capital Value Fund and the Comstock Capital Value Fund, and to
shareholders of the Dreyfus Capital Value Fund. For purposes of rendering
their opinion, Simpson Thacher & Bartlett may rely exclusively and without
independent verification as to factual matters, upon the statements made in
this Agreement, the prospectus/proxy statement which will be distributed to
the shareholders of the Dreyfus Capital Value Fund in connection with the
Reorganization, and upon such other written representations as the
President of each of the Dreyfus Capital Value Fund and CPF will have
verified as of the Effective Time of the Reorganization. The opinion of
Simpson Thacher & Bartlett will be to the effect that, based on the facts
and assumptions stated therein, for federal income tax purposes: (i) the
Reorganization will constitute a reorganization within the meaning of
section 368(a)(1) of Code with respect to the Dreyfus Capital Value Fund
and the Comstock Capital Value Fund; (ii) no gain or loss will be
recognized by the Dreyfus Capital Value Fund or the Comstock Capital Value
Fund upon the transfer of all the assets and liabilities, if any, of the
Dreyfus Capital Value Fund to the Comstock Capital Value Fund solely in
exchange for shares of the Comstock Capital Value Fund or upon the
distribution of the shares of the Comstock Capital Value Fund to the
<PAGE>
14
holders of shares of the Dreyfus Capital Value Fund solely in exchange for
all of their shares of the Dreyfus Capital Value Fund; (iii) no gain or
loss will be recognized by shareholders of the Dreyfus Capital Value Fund
upon the exchange of such shares of the Dreyfus Capital Value Fund solely
for shares of the Dreyfus Capital Value Fund; (iv) the holding period and
tax basis of the shares of the Comstock Capital Value Fund received by each
holder of shares of the Dreyfus Capital Value Fund pursuant to the
Reorganization will be the same as the holding period and tax basis of the
shares of the Dreyfus Capital Value Fund held by the shareholder (provided
the shares of the Dreyfus Capital Value Fund were held as a capital asset
on the date of the Reorganization) immediately prior to the Reorganization;
and (v) the holding period and tax basis of the assets of the Dreyfus
Capital Value Fund acquired by its Comstock Capital Value Fund will be the
same as the holding period and tax basis of those assets to the Dreyfus
Capital Value Fund immediately prior to the Reorganization.
(f) OPINION OF COUNSEL. CPF, on behalf of the Comstock Capital Value
Fund, shall have received the opinion of Stroock & Stroock & Lavan, as
counsel for the Dreyfus Capital Value Fund, dated the Effective Time of the
Reorganization, addressed to and in form and substance satisfactory to CPF,
to the effect that (i) the Dreyfus Capital Value Fund is a corporation duly
incorporated and validly existing under the laws of the State of Maryland;
(ii) the Dreyfus Capital Value Fund is an open-end investment company of
the management type registered under the Act; (iii) this Agreement and the
Reorganization provided for herein and the execution of this Agreement have
been duly authorized and approved by all requisite corporate action of the
Dreyfus Capital Value Fund and this Agreement has been duly executed and
delivered by the Dreyfus Capital Value Fund and is a valid and binding
obligation of the Dreyfus Capital Value Fund enforceable against the
Dreyfus Capital Value Fund in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing; (iv) to such counsel's knowledge, no consent, approval, order
or other authorization of any federal or New York state or Maryland state
court or administrative or regulatory agency is required for the Dreyfus
Capital Value Fund to enter into this Agreement or carry out its terms that
has not been obtained other than where the failure to obtain any such
consent, approval, order or authorization would not have a material adverse
effect on the operations of the Dreyfus Capital Value Fund; (v) to such
counsel's knowledge, the Dreyfus Capital Value Fund is not in breach or
violation of any material contract to which it is a party included on
Schedule I hereto, which breach or violation would (a) affect the ability
of the Dreyfus Capital Value Fund to enter into this Agreement or
consummate the transactions contemplated hereby, including the
Reorganization, or (b) have a material adverse effect on the business or
financial condition of the Dreyfus Capital Value Fund; and (vi) to such
counsel's knowledge, no federal or New York State or Maryland state
administrative or regulatory proceeding is pending or threatened against
the Dreyfus Capital Value Fund. In rendering such
<PAGE>
15
opinion, Stroock & Stroock & Lavan may rely on the opinion of Maryland
counsel as to matters relating to Maryland law and Maryland state
administrative proceedings, and on certificates of officers of the Dreyfus
Capital Value Fund with respect to factual matters.
(g) VOTE BY THE SOLE SHAREHOLDER OF EACH CLASS OF THE COMSTOCK
CAPITAL VALUE FUND. The Sole Shareholder shall have voted, immediately
after becoming the sole shareholder of the Class A, Class B, Class C and
Class R shares of the Comstock Capital Value Fund of CPF, and prior to the
receipt by the Dreyfus Capital Value Fund of any shares of the Comstock
Capital Value Fund, to:
(i) approve the investment advisory agreement between CPF and
Comstock Partners, Inc. as contemplated by Section 7(f) hereof;
(ii) approve the sub-investment advisory and administration
agreement between CPF and The Dreyfus Corporation as contemplated by
Section 7(f) hereof;
(iii) approve CPF's distribution plans referred to in Section 7(f)
hereof, for the Class A, Class B and Class C shares, as the case may
be, of the Comstock Capital Value Fund; and
(iv) approve the selection of Ernst & Young LLP as Comstock
Capital Value Fund's independent auditors.
(h) CONTRACT RELEASES. The Dreyfus Capital Value Fund shall have
obtained releases from the agreements referred to in Section 6(e) of this
Agreement as provided therein.
SECTION 9. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing
authorized by their respective Board of Directors, amend this Agreement at
any time before or after approval hereof by the shareholders of the Dreyfus
Capital Value Fund or CPF or both, but after such approval, no amendment
shall be made which substantially changes the terms hereof.
(b) WAIVERS. At any time prior to the Effective Time of the
Reorganization, either of the parties hereto may by written instrument
signed by it (i) waive any inaccuracies in the representations and
warranties made to it contained herein and (ii) waive compliance with any
of the covenants or conditions made for its benefit contained herein,
except that neither party may waive the conditions set forth in Sections
7(c) or 8(d) hereof.
<PAGE>
16
(c) TERMINATION BY THE DREYFUS CAPITAL VALUE FUND. The Dreyfus
Capital Value Fund may terminate this Agreement at any time prior to the
Effective Time of the Reorganization by written notice to CPF if (i) a
material condition to its performance hereunder or a material covenant of
CPF contained herein shall not be fulfilled or reasonably appears that it
cannot be fulfilled on or before the date specified for the fulfillment
thereof or (ii) a material default or material breach of this Agreement
shall be made by CPF.
(d) TERMINATION BY CPF. CPF may terminate this Agreement at any time
prior to the Effective Time of the Reorganization by written notice to the
Dreyfus Capital Value Fund if (i) a material condition to its performance
hereunder or a material covenant of the Dreyfus Capital Value Fund
contained herein shall not be fulfilled or reasonably appears that it
cannot be fulfilled on or before the date specified for the fulfillment
thereof or (ii) a material default or material breach of this Agreement
shall be made by the Dreyfus Capital Value Fund.
(e) TERMINATION BY EITHER THE DREYFUS CAPITAL VALUE FUND OR CPF.
This Agreement may be terminated by the Dreyfus Capital Value Fund or CPF
at any time prior to the Effective Time of the Reorganization, whether
before or after approval of this Agreement by the shareholders of the
Dreyfus Capital Value Fund, without liability on the part of either party
hereto, its respective Directors, officers or shareholders, on notice to
the other parties in the event that such party's Board of Directors
determines that proceeding with this Agreement is not in the best interest
of that party's shareholders. Unless the parties hereto shall otherwise
agree in writing, this Agreement shall terminate without liability as of
the close of business on September 30, 1996 if the Effective Time of the
Reorganization is not on or prior to such date.
(f) SURVIVAL. No representations, warranties or covenants in or
pursuant to this Agreement (including certificates of officers), except for
the provisions of Section 10 of this Agreement, shall survive the
Reorganization.
SECTION 10. EXPENSES; INSURANCE
The expenses of the Reorganization will be borne equally by The
Dreyfus Corporation and by Comstock Partners, Inc. Such expenses include,
without limitation, (i) expenses incurred in connection with the entering into
and the carrying out of the provisions of this Agreement; (ii) expenses
associated with the preparation and filing of the Registration Statement under
the Securities Act and the N-1A Amendment covering the shares of the Comstock
Capital Value Fund to be issued pursuant to the provisions of this Agreement;
(iii) registration or qualification fees and expenses of preparing and filing
such forms as are necessary under applicable state securities laws to qualify
the shares of the Comstock Capital Value Fund to be issued in connection
herewith in each state in which shareholders of the Dreyfus Capital Value Fund
are resident as of the date of the mailing of the Prospectus to such
shareholders; (iv) postage; (v) printing; (vi) accounting fees; (vii) legal fees
and (viii) solicitation costs relating to the Reorganization.
<PAGE>
17
SECTION 11. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by hand,
certified mail or by facsimile transmission, shall be deemed given when received
and shall be addressed to the parties hereto at their respective addresses
listed below or to such other persons or addresses as the relevant party shall
designate as to itself from time to time in writing delivered in like manner:
(a) if to CPF, to it at:
10 Exchange Place
Suite 2010
Jersey City, New Jersey 07302-3913
Attention: Robert C. Ringstad
Facsimile: (201) 434-7422
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary S. Schpero, Esq.
Facsimile: (212) 455-2502
(b) if to the Dreyfus Capital Value Fund, to it at:
200 Park Avenue
New York, New York 10166
Attention: Lawrence Stoller
Facsimile: (212) 922-6880
with a copy to:
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004
Attention: Lewis G. Cole
Facsimile: (212) 806-6006
SECTION 12. GENERAL
This Agreement supersedes all prior agreements between the parties (written
or oral), is intended as a complete and exclusive statement of the terms of the
Agreement
<PAGE>
18
between the parties and may not be changed or terminated orally. This Agreement
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement, and shall become effective when one or more
counterparts have been executed by the Dreyfus Capital Value Fund and CPF and
delivered to each of the parties hereto. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer upon any other person any rights or
remedies under or by reason of this Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
Attest: COMSTOCK PARTNERS FUNDS, INC.,
on behalf of Comstock Capital Value Fund
By:______________________ By_______________________
Attest: DREYFUS CAPITAL VALUE FUND, INC.
By:______________________ By________________________
<PAGE>
SCHEDULE I
to Agreement
MATERIAL CONTRACTS
I. Material Contracts of the Dreyfus Capital Value Fund
Investment Advisory Agreement Between the Fund and the
Dreyfus Corporation, dated as of August 24, 1994
Distribution Agreement between the Fund and Premier
Mutual Fund Services, Inc., dated as of August 24, 1994
Transfer Agency Agreement between the Fund and Dreyfus
Transfer, Inc., dated as of November 20, 1995
Amended and Restated Custody Agreement between the Fund
and the Bank of New York, dated as of August 18, 1989
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
COMSTOCK PARTNERS CAPITAL VALUE FUND
This statement of additional information is not a prospectus and should
be read in conjunction with the Prospectus/Proxy Statement dated ___________
___ 1996 for the special meeting of shareholders of the Dreyfus Capital Value
Fund to be held on ____________ ___, 1996. A Prospectus/Proxy Statement,
dated __________ __, 1996 may be obtained by writing or calling collect
Comstock Partners Funds, Inc. at 10 Exchange Place, Suite 2010, Jersey City,
New Jersey 07302-3913 ((201) 332-4436).
A statement of additional information dated __________ __, 1996 (the
"Comstock Capital Value Fund Statement of Additional Information") containing
additional information about the Comstock Capital Value Fund, has been filed
with the Securities and Exchange Commission and is incorporated by reference
into this statement of additional information. The Comstock Capital Value
Fund Statement of Additional Information may be obtained without charge by
calling 1-800-645-6561. In addition, the Dreyfus Capital Value Fund has
filed a statement of additional information (the "Dreyfus Capital Value Fund
Statement of Additional Information"), dated February 1, 1996, with the
Securities and Exchange Commission, which document is incorporated by
reference herein. A copy of the Dreyfus Capital Value Fund Statement of
Additional Information may be obtained without charge by calling
1-800-645-6561.
__________ __, 1996
<PAGE>
DREYFUS CAPITAL VALUE FUND
HISTORICAL FINANCIAL STATEMENTS
<PAGE>
DREYFUS CAPITAL VALUE FUND, INC.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1995
COMMON STOCKS-40.1%
SHARES VALUE
------ -----
<S> <C> <C>
BASIC INDUSTRIES-29.4%
Gold Mining-26.4% Amax Gold.............................. (a) 225,500 $ 1,381,188
Ashanti Goldfields, G.D.R. ............ (b) 425,000 8,526,563
Barrick Gold........................... 261,200 6,758,550
Battle Mountain Gold................... 215,000 2,123,125
Cambior................................ 150,000 1,593,128
Driefontein Consolidated, A.D.R. ...... 127,000 1,730,375
East Rand Gold & Uranium, A.D.R. ...... 100,000 290,000
Echo Bay Mines......................... 250,000 2,718,750
Elandsrand Gold Mining, A.D.R. ........ 251,100 1,462,657
Free State Consolidated Gold Mines, A.D.R. 135,000 1,535,625
Goldcorp, Cl. A........................ 237,860 2,348,994
Golden Shamrock Mines.................. (a) 440,000 272,945
Hartebeesfontein Gold Mining, A.D.R. .. 433,000 1,309,825
Hecla Mining........................... (a) 313,500 3,801,188
Homestake Mining....................... 424,800 7,221,600
Kinross Mines, A.D.R. ................. 144,000 1,584,000
Newmont Gold........................... 200,000 8,100,000
Newmont Mining......................... 118,000 5,015,000
Pegasus Gold........................... (a) 363,300 4,949,962
PlacerDome............................. 501,400 13,161,750
Royal Oak Mines........................ (a) 400,000 1,725,000
Santa Fe Pacific Gold.................. (a) 677,082 8,548,160
TVX Gold............................... (a) 467,000 3,269,000
Vaal Reefs Exploration & Mining, A.D.R. 347,500 2,280,469
Western Area Gold Mining, A.D.R. ...... 18,100 313,356
Western Deep Levels, A.D.R. ........... 38,000 1,313,375
Winkelhaak Mines, A.D.R. .............. 175,600 1,569,425
------------
94,904,010
------------
Metals-3.0% Freeport-McMoRan Copper & Gold, Cl. A... 400,000 10,250,000
Impala Platinum Holdings, A.D.R. ...... 15,000 371,816
------------
10,621,816
------------
TOTAL BASIC INDUSTRIES................. 105,525,826
============
RESTRUCTURING-10.7%
Broadcasting-.5% Tele-Communications Liberty Media, Cl. A. 17,500 468,125
Tele-Communications-TCI, Cl. A......... (a) 70,000 1,225,000
------------
1,693,125
------------
Chemicals-.6% P.T. Tri Polyta Indonesia, A.D.R. ...... 102,000 2,193,000
------------
Conglomerates-.6% Teledyne.................................. 75,000 2,034,375
------------
Electrical Equipment-.3% Hitachi, A.D.R........................... 10,000 1,101,250
------------
Energy-.8% Baker Hughes............................. 150,000 3,056,250
------------
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1995
COMMON STOCKS (CONTINUED)
SHARES VALUE
_______ _______
RESTRUCTURING (CONTINUED)
Foods and Beverages-.6% Dole Food............................... 68,200 $ 2,361,425
-----------
Holding Companies-1.7% Horsham................................. 464,200 6,092,625
-----------
Industrial-1.5% Pepgro.................................. 848,700 2,760,425
Pepgro ((N) Shares).................... 848,700 2,557,025
-----------
5,317,450
-----------
Miscellaneous-.7% Fleming Russia Securities Fund.......... 220,765 1,545,355
Lazard Vietnam Fund.................... 87,000 913,500
-----------
2,458,855
-----------
Oil-.9% Amerada Hess............................ 31,000 1,507,375
Total S.A., A.D.R. .................... 54,000 1,626,750
-----------
3,134,125
-----------
Oil and Gas Exploration-.3% Petro-Canada........................... 113,500 1,223,756
___________
Retail- 1.6% Duty Free International................. 111,200 1,417,800
Hartmarx............................. (a) 260,000 1,560,000
K mart................................. 187,000 2,711,500
___________
5,689,300
___________
Semiconductors-.6% Fujitsu................................ 27,000 338,176
NEC, A.D.R............................ 18,400 1,285,700
OKI Electric Industry................. (a) 32,000 294,349
Toshiba............................... 37,000 268,788
___________
2,187,013
___________
TOTAL RESTRUCTURING.................... 38,542,549
============
TOTAL COMMON STOCKS
(cost $124,782,969).................. $144,068,375
============
PREFERRED STOCKS-.1%
Conglomerates; Teledyne, Series E
(cost $11,063)....................... 750 $ 10,406
============
CONTRACTS
SUBJECT
PUT OPTIONS-2.6% TO PUT
-----------
AMEX Security Broker/Dealer Index:
January `96 @ $355................... 33,400 $ 81,413
Brokerage Basket;
November `95 @ $95.................. (n) 224,323 0
Nasdaq 100 Index:
March `96 @ $550..................... 4,000 76,000
June `96 @ $550...................... 3,500 84,438
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1995
CONTRACTS
SUBJECT
PUT OPTIONS (CONTINUED) TO PUT VALUE
__________ ________
Philadelphia Semi-Conductor Index;
June `96 @ $280...................... 4,200 $152,250
Standard & Poor's 500 Index Flex Options:
December `95 @ $450.................. 122,000 26,688
December `96 @ $525.................. 32,500 365,625
Standard & Poor's 500 Index:
December `95 @ $375.................. 45,500 5,687
December `95 @ $400.................. 45,500 2,844
December `95 @ $450.................. 71,500 20,109
December `95 @ $475.................. 40,100 15,037
December `95 @ $485.................. 30,000 15,000
December `95 @ $550.................. 41,500 140,063
March `96 @ $453..................... (n) 90,930 3,637
March `96 @ $500..................... 113,000 268,375
March `96 @ $525..................... 84,000 351,750
June `96 @ $450...................... 23,500 36,719
June `96 @ $475...................... 113,000 268,375
June `96 @ $500...................... 73,000 310,250
June `96 @ $550...................... 52,000 546,000
September `96 @ $550................. 101,000 1,350,875
December `96 @ $525.................. 32,500 357,500
PRINCIPAL
AMOUNT
SUBJECT
TO PUT
-------
Japanese Government Bond:
4.60%, 9/20/2004:
May `96 @ $1.288............... (c,d,n) $ 27,955,912 2,591,910
June `96 @ $1.343................(c,d,n) 13,271,002 2,248,909
U.S. Treasury Bond;
7.625%, 2/15/2025;
April `96 @ $103.078................(n) 30,000,000 120,000
___________
TOTAL PUT OPTIONS
(cost $25,556,433)................... $ 9,439,454
============
PRINCIPAL
BONDS AND NOTES-37.4% AMOUNT
--------
BONDS-36.6%.......... Argentinian Securities;
Republic of Argentina,
5%, 3/31/2023................(e,f,g) $ 2,250,000 $1,092,656
Austrian Securities;
Republic of Austria,
4.50%, 2/12/2000................(h) 27,744,166 28,881,677
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1995
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
------- -------
BONDS (CONTINUED)...... Danish Securities;
Kingdom of Denmark,
4.25%, 9/30/1999................(h) $12,964,564 $ 13,411,841
Dutch Securities;
Netherlands Government,
7.25%, 7/15/1999................(j) 4,062,754 4,308,550
German Securities;
Bundesrepublik Deutschland:
8.50%, 4/22/1996................(i) 42,337,299 43,323,758
9%, 10/20/2000................(i) 16,710,987 18,893,442
8.875%, 12/20/2000............(i) 12,596,221 14,193,422
Venezuelan Securities;
Republic of Venezuela,
6.75%, 3/31/2020.............(e,f) 14,000,000 7,175,000
___________
131,280,346
___________
NOTES-.8% Federal National Mortgage Association,
Non-Callable Strips, (collateralized by
FNMA Strip, 10/1/2024) Cl. 267-2,
8.50%, 10/25/2024 (Interest Only Obligation) 11,748,490 (k) 2,915,094
___________
TOTAL BONDS AND NOTES
(cost $115,829,424).................. $134,195,440
=============
LOAN PARTICIPATIONS-2.3%
FOREIGN LOAN PARTICIPATIONS:Vnesheconombank (Bank for Foreign
Economic Affairs of the USSR) 5/3/2025................... (h,n) $19,446,845 $ 6,077,139
5/3/2025................... (i,n) 6,298,111 2,212,211
___________
TOTAL LOAN PARTICIPATIONS
(cost $6,703,509)......................... $ 8,289,350
=============
SHORT-TERM INVESTMENTS-21.5%
U.S. TREASURY BILLS:. 5.35%, 10/5/95 ...................(l,m) $ 44,201,000 $ 44,169,617
5.35%, 10/12/95...................(l,m) 3,453,000 3,447,026
5.36%, 11/9/95......................... 409,000 406,595
5.38%, 11/16/95........................ 16,567,000 16,452,191
5.37%, 11/24/95...................(l,m) 9,429,000 9,352,625
5.24%, 12/7/95......................... 3,377,000 3,343,028
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $77,178,940)................... $ 77,171,082
============
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1995
VALUE
------------
TOTAL INVESTMENTS (cost $350,062,338) ................................ 104.0% $373,174,107
====== =============
LIABILITIES, LESS CASH AND RECEIVABLES ..................................... (4.0%) $ (14,273,638)
====== =============
NET ASSETS.................................................................. 100.0% $ 358,900,469
====== =============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
September 30, 1995, this security amounted to $8,526,563 or 2.4%
of net assets.
(c) Strike price converted to U.S. Dollars at the prevailing rate of
exchange.
(d) Denominated in Japanese Yen.
(e) Denominated in U.S. Dollars.
(f) Secured by U.S. Treasury securities.
(g) Scheduled variable interest rate.
(h) Denominated in Swiss Francs.
(i) Denominated in German Marks.
(j) Denominated in Dutch Guilder.
(k) Notional face amount.
(l) Partially held by broker as collateral for open short positions.
(m) Partially held by the custodian in a segregated account as
collateral for open financial futures positions.
(n) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $13,253,806, represents
approximately 3.7% of net assets:
<PAGE>
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
PUT OPTIONS: DATE PRICE NET ASSETS VALUATION*
- ----------- ----------- -------- -------------- ----------
<S> <C> <C> <C> <C>
Brokerage Basket**
November `95 @ $95........... 11/11/94 $ 5.70 0.00 fair value
Japanese Government Bond:
4.60%, 9/20/2004, May `96
@ $1.288..................... 5/16/95 $ .07 0.72 fair value
4.60%, 9/20/2004, June `96
@ $1.343..................... 6/21/95 $ .08 0.63 fair value
Standard & Poor's 500 Index
March `96 @ $453............. 12/14/94 $21.99 0.00 fair value
U.S. Treasury Bond;
7.625%, 2/15/2025, April `96
@ $103.078................... 4/12/95 $ 4.72 0.03 fair value
LOAN PARTICIPATIONS;
- --------------------
Vnesheconombank
(Bank for Foreign Economic
Affairs of the USSR)
5/3/2025................... 5/2/95 $ .24 2.30 fair value
6/29/95
* The valuation of these securities has been determined in good faith under
the direction of the Board of Directors.
** Consists of Common Stocks of six publicly traded brokerage firms.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF FINANCIAL FUTURES
SEPTEMBER 30, 1995
SEPTEMBER 30, 1995 UNREALIZED
MARKET VALUE APPRECIATION
NUMBER OF COVERED (DEPRECIATION)
CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/95
--------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
FINANCIAL FUTURES PURCHASED;
Nikkei 225........................... 22 $ 1,980,550 December `95 $(23,400)
FINANCIAL FUTURES SOLD SHORT:
Hang Seng............................ 70 (4,371,553) October `95 (3,625)
Japanese Yen......................... 22 (2,823,975) March `96 84,000
---------------
$56,975
---------------
---------------
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT
SEPTEMBER 30, 1995
COMMON STOCKS-18.9%
SHARES VALUE
-------- -----------
<S> <C> <C>
AUTO RELATED-.3% Ford Motor.................................................... 40,000 $1,245,000
-----------
COMPUTERS-.4% Compaq Computer............................................... 32,000 1,548,000
-----------
CONSUMERS-6.1% Anheuser-Busch............................................... 5,700 355,537
B.A.T. Industries, A.D.R. ................................... 23,100 392,700
Clorox....................................................... 22,000 1,570,250
Coca-Cola.................................................... 41,000 2,829,000
Disney (Walt)................................................ 10,000 573,750
General Mills................................................ 52,000 2,899,000
Gillette..................................................... 23,000 1,095,375
Heinz (H.J.)................................................. 35,900 1,642,425
Kellogg...................................................... 50,000 3,618,750
Reebok International......................................... 53,900 1,852,813
Rubbermaid................................................... 60,300 1,665,787
Sara Lee..................................................... 81,000 2,409,750
Wrigley, (Wm), Jr............................................ 20,000 1,010,000
-----------
21,915,137
-----------
FINANCE-4.2% ADVANTA, Cl. A............................................... 2,500 112,500
Alex Brown................................................... 19,900 1,161,663
Bear Stearns................................................. 122,587 2,635,620
CMAC Investment.............................................. 15,000 789,375
Conseco...................................................... 22,000 1,152,250
MGIC Investment.............................................. 22,000 1,259,500
Merrill Lynch................................................ 42,000 2,625,000
PMI Group.................................................... 10,000 473,750
Paine Webber Group........................................... 88,000 1,738,000
Schwab (Charles)............................................. 80,000 2,240,000
United Asset Management...................................... 20,000 802,500
-----------
14,990,158
-----------
HEALTH CARE-.3% Healthsource................................................. 23,000 1,106,875
-----------
MACHINERY-CONSTRUCTION &
MATERIAL-.7% Deere & Co................................................... 18,200 1,481,025
Ingersoll-Rand............................................... 26,500 993,750
-----------
2,474,775
-----------
RESTAURANTS-.6% Outback Steakhouse........................................... 74,500 2,290,875
-----------
RETAIL-1.5% Home Depot................................................... 64,233 2,561,291
Sysco........................................................ 25,000 681,250
Wal-Mart Stores.............................................. 81,000 2,014,875
-----------
5,257,416
-----------
TECHNOLOGY-4.2% American Power Conversion.................................... 47,000 575,750
Applied Materials............................................ 16,700 1,707,575
Integrated Device Technology................................. 36,000 900,000
Intel........................................................ 30,600 1,839,825
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT (CONTINUED)
SEPTEMBER 30, 1995
COMMON STOCKS (CONTINUED)
SHARES VALUE
-------- -----------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
KLA Instruments.............................................. 19,500 $ 1,564,875
Kulicke & Soffa Industries................................... 38,000 1,387,000
Maxim Integrated Products.................................... 15,000 1,110,000
Micron Technology............................................ 10,000 795,000
Microsoft.................................................... 11,000 995,500
Motorola..................................................... 21,000 1,603,875
Novellus Systems............................................. 14,000 980,000
Texas Instruments............................................ 20,000 1,597,500
-----------
15,056,900
-----------
TELECOMMUNICATIONS-.6%
Hong Kong Telecom, A.D.R. .................................. 114,000 2,080,500
-----------
TOTAL SECURITIES SOLD SHORT
(proceeds $65,428,414).................................. $67,965,636
-----------
-----------
See notes to financial statements.
</TABLE>
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $350,062,338)-see statement...................................... $ 373,174,107
Cash.................................................................... 620,787
Receivable from broker for proceeds on securities sold short............ 65,428,414
Dividends and interest receivable....................................... 5,945,967
Receivable for investment securities sold............................... 1,234,459
Receivable for subscriptions to Common Stock............................ 236,972
Prepaid expenses........................................................ 76,703
____________
446,717,409
LIABILITIES:
Due to investment adviser............................................... $ 132,304
Due to sub-investment adviser........................................... 93,263
Due to Distributor...................................................... 130,083
Securities sold short, at value
(proceeds $65,428,414)-see statement................................... 67,965,636
Bank loans payable-Note 2............................................... 10,000,000
Net unrealized depreciation on forward currency
exchange contracts-Note 4(a)........................................... 5,203,133
Payable for investment securities purchased............................. 2,539,142
Payable for Common Stock redeemed....................................... 1,335,306
Interest payable........................................................ 56,623
Payable for futures variation margin-Note 4(a).......................... 6,806
Accrued expenses........................................................ 354,644 87,816,940
__________ _____________
NET ASSETS.................................................................. $ 358,900,469
=============
REPRESENTED BY:
Paid-in capital......................................................... $ 469,863,103
Accumulated undistributed investment income-net......................... 14,105,924
Accumulated net realized (loss) on investments, securities sold short,
foreign currency transactions and financial futures.................... (140,552,041)
Accumulated net unrealized appreciation on investments, securities
sold short, and foreign currency transactions
(including $56,975 net unrealized appreciation
on financial futures)-Note 4(b)........................................ 15,483,483
_____________
NET ASSETS at value......................................................... $358,900,469
=============
</TABLE>
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
Shares of Common Stock outstanding:
Class A Shares
(100 million shares of $.01 par value authorized)..................... 25,543,483
==========
Class B Shares
(100 million shares of $.01 par value authorized)..................... 8,438,630
==========
Class C Shares
(100 million shares of $.01 par value authorized)..................... 94
==========
Class R Shares
(100 million shares of $.01 par value authorized)..................... 92
==========
NET ASSET VALUE per share:
Class A Shares
($271,051,783 / 25,543,483 shares).................................... $10.61
==========
Class B Shares
($87,846,730 / 8,438,630 shares)...................................... $10.41
==========
Class C Shares
($979 / 94 shares).................................................... $10.41
==========
Class R Shares
($977 / 92 shares).................................................... $10.62
=========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest................................................................ $ 20,726,708
Cash dividends (net of $75,753 foreign taxes withheld at source)...... 1,924,318
____________
TOTAL INCOME........................................................ $ 22,651,026
EXPENSES:
Investment advisory fee-Note 3(a)....................................... 1,840,790
Sub-investment advisory fee-Note 3(a)................................... 1,365,789
Dividends on securities sold short.................................... 1,861,794
Shareholder servicing costs-Note 3(c)................................. 1,659,621
Distribution fees-Note 3(b)........................................... 738,585
Prospectus and shareholders' reports.................................. 120,170
Custodian fees........................................................ 106,205
Professional fees..................................................... 73,048
Registration fees..................................................... 72,468
Interest expense-Note 2............................................... 59,145
Directors' fees and expenses-Note 3(d)................................ 49,789
Miscellaneous......................................................... 22,130
____________
TOTAL EXPENSES...................................................... 7,969,534
____________
INVESTMENT INCOME-NET............................................... 14,681,492
____________
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments-Note 4(a):
Long transactions (including options transactions and foreign
currency transactions)................................................. $ 2,696,163
Short sale transactions................................................. (22,403,778)
Net realized gain on forward currency exchange contracts-Note 4(a);
Long transactions...................................................... 118,547
Net realized (loss) on financial futures-Note 4(a);
Short transactions..................................................... (7,893,569)
____________
NET REALIZED (LOSS)................................................... (27,482,637)
Net unrealized (depreciation) on investments, securities sold short
and foreign currency transactions [including ($1,427,125) net
unrealized (depreciation) on financial futures]........................ (28,971,658)
____________
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS..................... (56,454,295)
____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(41,772,803)
=============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------
1994 1995
------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 9,823,170 $ 14,681,492
Net realized (loss) on investments, securities sold short,
foreign currency transactions and financial futures.................... (9,217,163) (27,482,637)
Net unrealized appreciation (depreciation) on investments, securities
sold short, foreign currency transactions and financial futures
for the year........................................................... 26,168,303 (28,971,658)
_____________ _____________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 26,774,310 (41,772,803)
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (8,633,848) (8,406,886)
Class B shares........................................................ (913,770) (1,940,644)
Class C shares........................................................ -- --
Class R shares........................................................ -- --
_____________ _____________
TOTAL DIVIDENDS..................................................... (9,547,618) (10,347,530)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 116,664,797 39,533,363
Class B shares........................................................ 85,400,651 26,973,391
Class C shares........................................................ -- 1,000
Class R shares........................................................ -- 1,000
Dividends reinvested:
Class A shares........................................................ 4,857,514 5,143,774
Class B shares........................................................ 489,988 990,338
Class C shares........................................................ -- --
Class R shares........................................................ -- --
Cost of shares redeemed:
Class A shares........................................................ (147,154,408) (136,312,596)
Class B shares........................................................ (8,939,968) (36,549,208)
Class C shares........................................................ -- --
Class R shares........................................................ -- --
_____________ _____________
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS... 51,318,574 (100,218,938)
_____________ _____________
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 68,545,266 (152,339,271)
NET ASSETS:
Beginning of year....................................................... 442,694,474 511,239,740
_____________ _____________
End of year (including undistributed investment income-net:
$9,771,962 in 1994 and $14,105,924 in 1995)........................... $ 511,239,740 $ 358,900,469
============= =============
</TABLE>
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SHARES
CLASS A CLASS B CLASS C CLASS R
-------------------------- -------------------------- ------------- -------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, PERIOD ENDED PERIOD ENDED
-------------------------- -------------------------- SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1994 1995 1995* 1995*
------------ ------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............... 9,919,385 3,569,389 7,342,835 2,464,126 94 92
Shares issued for
dividends reinvested..... 411,308 466,343 41,951 91,024 -- --
Shares redeemed........... (12,560,968) (12,382,551) (783,960) (3,400,272) -- --
----------- ----------- --------- ---------- ---- ----
(DECREASE) IN
SHARES OUTSTANDING.... (2,230,275) (8,346,819) 6,600,826 (845,122) 94 92
=========== =========== ========= ========== ==== ====
</TABLE>
* From August 22, 1995 (commencement of initial offering)
to September 30, 1995.
See notes to financial statements.
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated February 1, 1996.
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. The Dreyfus
Corporation ("Dreyfus") serves as the Fund's investment adviser. Comstock
Partners, Inc. ("Comstock Partners") serves as the Fund's sub-investment
adviser. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc. Dreyfus is a
direct subsidiary of Mellon Bank, N.A.
The Fund offers Class A, Class B, Class C and Class R shares. Class A
shares are subject to a sales charge imposed at the time of purchase, Class B
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within six years of purchase, Class C
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase and Class R
shares are sold at net asset value per share only to institutional investors.
Other differences between the four Classes include the services offered to
and the expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain, if any, are normally declared and paid annually, but the Fund
may make distributions on a more frequent basis to comply with the
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
distribution requirements of the Internal Revenue Code. This may result in
distributions that are in excess of investment income-net and net realized
gain on a fiscal year basis. To the extent that net realized capital gain can
be offset by capital loss carryovers, it is the policy of the Fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately
$122,600,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to September 30,
1995. The carryover does not include net realized securities losses from
November 1, 1994 through September 30, 1995 which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied, $9,100,000 of
the carryover expires in fiscal 1999, $29,800,000 expires in fiscal 2000,
$17,800,000 expires in fiscal 2001, $56,700,000 expires in fiscal 2002, and
$9,200,000 expires in fiscal 2003.
NOTE 2-BANK LINE OF CREDIT:
In accordance with an agreement with a bank, the Fund may borrow up to
$10 million under a short-term unsecured line of credit. Interest on
borrowings is charged at rates which are related to Federal Funds rates in
effect from time to time. Outstanding borrowings on September 30, 1995 under
the line of credit, amounted to $10 million, at an annualized rate of 7.05%.
The average daily amount of short-term debt outstanding during the year
ended September 30, 1995 was approximately $859,000, with a related weighted
average annualized interest rate of 6.89%. The maximum amount borrowed at any
time during the year ended September 30, 1995 was $10 million.
NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an Investment
Advisory Agreement with Dreyfus and a Sub-Investment Advisory Agreement with
Comstock Partners (together "Agreements") are payable monthly, computed on
the average daily value of the Fund's net assets at the following annual
rates:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS DREYFUS COMSTOCK PARTNERS
-------------------- ------- -----------------
<S> <C> <C>
0 up to $25 million................ .60 of 1% .15 of 1%
$25 up to $75 million.............. .50 of 1% .25 of 1%
$75 up to $200 million............. .45 of 1% .30 of 1%
$200 up to $300 million............ .40 of 1% .35 of 1%
In excess of $300 million.......... .375 of 1% .375 of 1%
</TABLE>
The Agreements further provide that the Fund may deduct from the fees to
be paid to Dreyfus and Comstock Partners, or Dreyfus and Comstock Partners
will bear such excess expense, to the extent required by state law, should
the Fund's aggregate expenses, exclusive of taxes, brokerage, interest on
borrowings (which, in the view of Stroock & Stroock & Lavan, counsel to the
Fund, also contemplates dividends and interest accrued on securities sold
short), and extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement in any
full fiscal year that such expenses (exclusive of distribution expenses and
certain expenses as described above) exceed 21\2% of the first $30
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
million, 2% of the next $70 million and 11\2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with California
"blue sky" regulations. No expense reimbursement was required for the year
ended September 30, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
retained $13,897 during the year ended September 30, 1995 from commissions
earned on sales of Fund shares.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Fund pays the Distributor for distributing the Fund's Class B and
Class C shares at an annual rate of .75 of 1% of the value of the average
daily net assets of Class B and Class C. During the year ended September 30,
1995, $738,584 was charged to the Fund for the Class B shares and $1 was
charged to the Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor,
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amount to be paid to Service Agents. For the year ended September 30, 1995,
$822,664, $246,195 were charged to Class A and B shares, respectively, and no
amounts were charged to the Class C shares, by the Distributor pursuant to
the Shareholder Services Plan.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and each director emeritus receives 50% of such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and sales
of investment securities and securities sold short, excluding short-term
securities, financial futures, forward currency exchange contracts and
options transactions during the year ended September 30, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------- ---------------
<S> <C> <C>
Long transactions.............. $ 87,407,314 $ 77,568,367
Short sale transactions........ 136,098,892 76,244,500
_______________ _______________
TOTAL........................ $223,506,206 $153,812,867
============== ==============
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value. The
Fund would incur a loss if the price of the security increases between the
date of the short sale and the date on which the Fund replaces the borrowed
security. The Fund would realize a gain if the price of the security declines
between those dates. Until the Fund replaces the borrowed security, the Fund
will maintain daily, a segregated account with a broker and custodian, of
cash and/or U.S. Government securities sufficient to cover its short
position. Securities sold short at September 30, 1995 and their related
market values and proceeds are set forth in the Statement of Securities Sold
Short.
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following summarizes open forward currency contracts at September 30,
1995:
<TABLE>
<CAPTION>
U.S.
DOLLAR UNREALIZED
FORWARD CURRENCY CONTRACTS: PROCEEDS VALUE (DEPRECIATION)
----------- ----------- --------------
<S> <C> <C> <C>
SALES:
Dutch Guilders, expiring 11/20/95........... $ 4,072,948 $ 4,203,262 $ (130,314)
German Deutschemarks, expiring 11/17/95..... 73,520,652 75,890,661 (2,370,009)
Swiss Francs, expiring 11/17/95............. 42,549,364 45,252,174 (2,702,810)
COST
-----------
PURCHASES;
Hong Kong Dollars, expiring 10/3/95......... $ 181,174 181,174 --
-----------
TOTAL....................................................... $(5,203,133)
===========
</TABLE>
The Fund enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, the
Fund is obligated to buy or sell a foreign currency at a specified rate on a
certain date in the future. With respect to sales of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
increases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract decreases between those dates. With respect to purchases of forward
currency exchange contracts, the Fund would incur a loss if the value of the
contract decreases between the date the forward contract is opened and the
date the forward contract is closed. The Fund realizes a gain if the value of
the contract increases between those dates. The Fund is also exposed to
credit risk associated with counter party nonperformance on these forward
currency exchange contracts which is typically limited to the unrealized
gains on such contracts that are recognized in the statement of assets and
liabilities.
The Fund may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. The Fund is exposed to
market risk as a result of changes in the value of the underlying financial
instruments (see the Statement of Financial Futures). Investments in
financial futures require the Fund to "mark to market" on a daily basis,
which reflects the change in the market value of the contracts at the close
of each day's trading. Typically, variation margin payments are made or
received to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments
require initial margin deposits with a custodian, which consist of cash or
cash equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on which
the contract is traded and is subject to change. Contracts open at September
30, 1995 and their related unrealized market appreciation (depreciation) are
set forth in the Statement of Financial Futures.
The Fund may purchase put and call options, including restricted options,
which are not exchange traded in order to gain exposure to or protect against
changes in the market. The Fund's exposure to credit risk associated with
counter party nonperformance on these investments is typically limited to the
market value of such investments that are disclosed in the Statement of
Investments.
The Fund may invest in fixed and floating rate loans arranged through
private negotiations between an issuer of Sovereign Debt Obligations and one
or more financial institutions. The Fund's investments in loans are expected
in most instances to be in the form of participations in loans and
assignments of all or a portion of loans from third parties. As a result the
Fund may be subject to credit risk from the issuer of
<PAGE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Sovereign Debt Obligations and the third party. In addition such loans may be
less liquid and may be subject to greater price volatility.
(B) At September 30, 1995, accumulated net unrealized appreciation on
investments was $20,631,522, consisting of $46,860,961 gross unrealized
appreciation and $26,229,439 gross unrealized depreciation, excluding foreign
currency transactions.
At September 30, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL VALUE FUND (A PREMIER FUND)
We have audited the accompanying statement of assets and liabilities of
Dreyfus Capital Value Fund (A Premier Fund), including the statements of
investments, financial futures and securities sold short, as of September 30,
1995, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Capital Value Fund (A Premier Fund) at September 30,
1995, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst & Young LLP signature logo]
New York, New York
November 13, 1995
<PAGE>
COMSTOCK PARTNERS FUNDS, INC.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
- ------- ---------------
The response to this item is incorporated by reference to Item 27 of Part C
of Post-Effective Amendment No. 7, filed July 20, 1995, to the Registrant's
Registration Statement on Form N-1A, Registration Nos. 33-40771 and 811-5502
(the "Registration Statement").
ITEM 16. EXHIBITS.
- ------- --------
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1 Registrant's Articles of Incorporation, Articles of Amendment and
Articles Supplementary are incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 7 to the Registration Statement, filed
July 20, 1995 ("Post-Effective Amendment No. 7") and to Exhibit 1 to
Post-Effective No. 8 to the Registration Statement filed February 13,
1996 ("Post-Effective Amendment No. 8").
2 Registrant's By-Laws, as amended are incorporated by reference to
Exhibit 2 to the Post-Effective Amendment No. 8.
3 Inapplicable.
4 Agreement and Plan of Reorganization between Registrant and the
Dreyfus Capital Value Fund, Inc. (filed herewith as Exhibit A to the
Prospectus/Proxy Statement).
5 Form of Registrant's specimen share certificates are incorporated by
reference to Exhibit 4(d) to Post-Effective Amendment No.8.
6(a) Form of Investment Advisory Agreement between Registrant and Comstock
Partners, Inc. is incorporated by reference to Exhibit 5(c) to Post-
Effective No. 8.
6(b) Form of Sub-Investment Advisory and Administration Agreement between
Registrant and The Dreyfus Corporation is incorporated by reference to
Exhibit 5(d) to Post-Effective Amendment No. 8.
7 Form of Distribution Agreement between Registrant and Premier Mutual
Fund Services, Inc. is incorporated by reference to Exhibit 6
Post-Effective Amendment No. 8.
8 Inapplicable.
9 Form of Custodian Agreement between Registrant and The Bank of New
York is incorporated by reference to Exhibit 8(a) to Post-Effective
Amendment No. 8.
10(a) Amended and Restated Class A Service and Distribution Plan is
incorporated by reference to Exhibit 15(a) to Post-Effective Amendment
No. 8.
10(b) Class B Service and Distribution Plan is incorporated by reference to
Exhibit 15(b) to Post-Effective Amendment No. 8.
<PAGE>
10(c) Amended and Restated Class C Service and Distribution Plan is
incorporated by reference to Exhibit 15(c) to Post-Effective Amendment
No. 8.
10(d) Form of Rule 18f-3 Plan entered into by Registrant is incorporated by
reference to Exhibit 18 to Post-Effective Amendment No. 8.
11 Opinion of Counsel regarding legality of issuance of shares and other
matters.
12 Opinion of Counsel on tax matters.
13 Inapplicable.
14(a) Consent of Ernst & Young LLP, Independent Auditors.
14(b) Consent of Venable, Baetjer and Howard, LLP (included in Exhibit 11
hereto).
14(c) Consent of Simpson Thacher & Bartlett (included in Exhibit 12 hereto).
15 Inapplicable.
16 Powers of Attorney for Messrs. Salvigsen, Minter, Adelberg and
Smith.
17(a) Form of Proxy.
<PAGE>
ITEM 17. UNDERTAKINGS.
- ------- ------------
(1) The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act,
the reoffering prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of Jersey City and
State of New Jersey on the 13th day of February, 1996.
COMSTOCK PARTNERS FUNDS, INC.
By: /s/ Robert C. Ringstad
---------------------------
Robert C. Ringstad
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on the 13th day of February, 1996.
SIGNATURE TITLE
--------- -----
/s/ Stanley D. Salvigsen
- -------------------- Chairman of the Board (principal executive
Stanley D. Salvigsen officer) and Director
/s/ Robert C. Ringstad
- --------------------- Treasurer (principal financial and
Robert C. Ringstad accounting officer)
/s/ Charles L. Minter
- --------------------- Director
Charles L. Minter
/s/ M. Bruce Adelberg
- --------------------- Director
M. Bruce Adelberg
- --------------------- Director
E. W. Kelley
/s/ Robert M. Smith
- --------------------- Director
Robert M. Smith
<PAGE>
COMSTOCK PARTNERS FUNDS, INC.
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
11 Opinion of Counsel regarding legality of issuance of
shares and other matters.
12 Opinion of Counsel on tax matters.
14(a) Consent of Ernst & Young LLP, Independent Auditors
16 Powers of Attorney for Messrs. Salvigsen, Minter,
Adelberg, Kelley and Smith
17(a) Form of Proxy
<PAGE>
Exhibit 11
[Venable, Baetjer and Howard, LLP]
February 12, 1996
Comstock Partners Funds, Inc.
10 Exchange Place, Suite 2010
Jersey City, New Jersey 07302-3913
RE: Comstock Partners Capital Value Fund
------------------------------------
Ladies and Gentlemen:
We have acted as special Maryland counsel to Comstock Partners Funds,
Inc., a Maryland corporation (the "Company"), in connection with the proposed
acquisition by the Company on behalf of Comstock Partners Capital Value Fund
(the "Fund") of all or substantially all the assets and liabilities of the
Dreyfus Capital Value Fund, Inc. (the "Acquired Fund"), in exchange for Class A,
Class B, Class C and Class R shares of Common Stock of the Fund (the
"Class A Shares," "Class B Shares," "Class C Shares," and "Class R Shares,"
respectively), pursuant to an Agreement and Plan of Reorganization dated as
of February 9, 1996 executed by the Company on behalf of the Fund and by
the Acquired Fund (the "Agreement").
We have examined the Company's Registration Statement on Form N-14
subtstantially in the form in which it is to become effective (the
"Registration Statement"), the Company's Charter and Bylaws, and the
Agreement. We have further examined and relied upon a certificate of the
Maryland State Department of Assessments and Taxation to the effect that the
Company is duly incorporated and existing under the laws of the State of
Maryland and is in good standing and duly authorized to transact business in
the State of Maryland.
We have also examined and relied upon such corporate records of the
Company and other documents and certificates with respect to factual matters
as we have deemed necessary to render the opinion expressed herein. We have
assumed, without independent verification, the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with originals of all documents submitted to us as copies. We have
further assumed that the Agreement constitutes the legal, valid and binding
obligation of the Acquired Fund, enforceable against the Acquired Fund in
accordance with its terms, and, further, that the number of Class A Shares,
Class B Shares, Class C Shares and Class R Shares of the Fund to be issued
by the Company on behalf of the Fund to the Acquired Fund pursuant to the
Agreement will not exceed the respective number of then unissued Class A
Shares, Class
<PAGE>
Comstock Partners Funds, Inc.
February 12, 1996
Page 2
B Shares, Class C Shares and Class R Shares of the Fund authorized in the
Company's Charter.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing and in good standing
under the laws of the State of Maryland.
2. The Class A Shares, Class B Shares, Class C Shares and Class R
Shares of the Fund to be issued by the Company on behalf of the Fund as
contemplated in the Agreement have been, to the extent of the number of
shares of the respective class authorized in the Charter of the Company and
then unissued, duly authorized, and, subject to the receipt by the Company of
consideration equal to the net asset value thereof (but in no event less than
the par value thereof), when issued in accordance with the Agreement will be
validly issued, fully paid and nonassessable Class A Shares, Class B Shares,
Class C Shares and Class R Shares of the Fund under the laws of the State of
Maryland.
This letter expresses our opinion with respect to the Maryland General
Corporation Law governing matters such as the authorization and issuance of
stock. It does not extend to the securities or "blue sky" laws of Maryland,
to federal securities law or to other laws.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus/Proxy Statement included in the Registration
Statement. We do not thereby admit that we are "experts" as that term is used
in the Securities Act of 1933 and the regulations thereunder. This opinion
may not be relied upon by any other person or for any other purpose without
our written consent.
Very truly yours,
/s/ Venable, Baetjer and Howard, LLP
------------------------------------
Venable, Baetjer and Howard, LLP
<PAGE>
Exhibit 12
[SIMPSON THACHER & BARTLETT]
February 12, 1996
Re: Agreement and Plan of Reorganization
dated as of February 9, 1996 between
Dreyfus Capital Value Fund, Inc. and
Comstock Partners Funds, Inc.
------------------------------------
Dreyfus Capital Value Fund, Inc.
200 Park Avenue
New York, New York 10166
Comstock Partners Funds, Inc.
10 Exchange Place
Suite 2010
Jersey City, New Jersey 07302-3913
Ladies and Gentlemen:
You have requested our opinion with respect to the federal income tax
consequences of certain aspects of the proposed transfer by Dreyfus Capital
Value Fund, Inc. (the "Dreyfus Capital Value Fund")1/ of all of its assets to
Comstock Partners Funds, Inc. ("CPF"), on behalf of the Comstock Capital
Value Fund solely in exchange for shares of the Comstock Capital Value Fund
and the assumption of all its
_____________________
1/ Where relevant, capitalized terms not otherwise defined herein have the
meanings they have for the purposes of the Agreement and Plan of
Reorganization dated as of February 9, 1996, between the Dreyfus Capital
Value Fund and CPF (the "Reorganization Agreement").
<PAGE>
Dreyfus Capital Value -2- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
obligations and liabilities (as described in Section 2(a)(1) of the
Reorganization Agreement) followed by the liquidation of the Dreyfus Capital
Value Fund and the distribution pro rata of such Comstock Capital Value Fund
shares to the shareholders of the Dreyfus Capital Value Fund. The series of
steps that will occur to effect such transaction are hereinafter referred to
as the "Reorganization". This opinion is being delivered pursuant to
Sections 7(d) and 8(e) of the Reorganization Agreement.
The Dreyfus Capital Value Fund is a Maryland corporation registered
under the Investment Company Act of 1940, as amended (the "Act"), as an
open-end diversified investment company of the management type.
The authorized capital stock of the Dreyfus Capital Value Fund consists
of 400,000,000 shares of Common Stock, each having a par value $.01 per
share. As of January 30, 1996, there were outstanding 23,958,332.788 Class A
shares, 7,754,335.065 Class B shares, 85,844.270 Class C shares, and 96.640
Class R shares of the Dreyfus Capital Value Fund, and no shares were held in
the treasury of the Dreyfus Capital Value Fund.
CPF is a Maryland corporation registered under the Act as an open-end
investment company of the management type.
The authorized capital stock of CPF consists of 1,000,000,000 shares of
Common Stock, each having a par value $.001 per share. As of January 30,
1996 there were
<PAGE>
Dreyfus Capital Value -3- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
outstanding 6,208,911.200 Comstock Partners Strategy Fund Class A shares,
17,349.093 Comstock Partners Strategy Fund Class C shares, and 27,212,215.215
Comstock Partners Strategy Fund Class O shares, and no shares were held in
the treasury of the Comstock Partners Strategy Fund.
The Reorganization Agreement was approved by the Board of Directors of
CPF on January 30, 1996 and by the Board of Directors of the Dreyfus Capital
Value Fund on January 29, 1996.
Upon satisfaction of all conditions precedent set forth in the
Reorganization Agreement, the Reorganization will be effected as set forth in
the following summary:
1. Pursuant to the Reorganization Agreement, the Dreyfus Capital
Value Fund will convey, transfer and deliver to CPF, on behalf of the
Comstock Capital Value Fund, and CPF, on behalf of the Comstock Capital
Value Fund, shall acquire, at the closing (the "Closing") all of the
then existing assets of the Dreyfus Capital Value Fund. In consideration
thereof, CPF agrees at the Closing to cause the Comstock Capital Value
Fund (i) to assume and pay, to the extent that they exist on or after the
Effective Time of the Reorganization, all of the obligations and
liabilities of the Dreyfus Capital Value Fund and (ii) to issue and
deliver to the Dreyfus Capital Value Fund full and fractional shares of
Class A, Class B, Class C and Class R shares of Common Stock, par value
<PAGE>
Dreyfus Capital Value -4- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
$.001 per share, of the Comstock Capital Value Fund, equal in net asset
value on the date of the exchange to the net asset value of full and
fractional outstanding shares of Class A, Class B, Class C and Class R
shares of Common Stock, par value $.01 per share, respectively, of the
Dreyfus Capital Value Fund. Any shares of capital stock of the Dreyfus
Capital Value Fund held in the treasury of the Dreyfus Capital Value Fund
at the Effective Time of the Reorganization shall thereupon be retired.
2. At the Effective Time of the Reorganization, the Dreyfus Capital
Value Fund will liquidate and distribute pro rata to the holders of its
shares as of the Effective Time of the Reorganization the shares of the
Comstock Capital Value Fund received by the Dreyfus Capital Value Fund
pursuant to the Reorganization. Holders of Class A, Class B, Class C
and Class R shares of the Dreyfus Capital Value Fund will receive,
respectively, that number of Class A, Class B, Class C and Class R shares
of the Comstock Capital Value Fund equal in net asset value at the date
of the exchange to the net asset value of such shareholder's shares of
the Dreyfus Capital Value Fund at such date. Such liquidation and
distribution will be accompanied by the establishment of an account on
the respective share records of the Comstock Capital Value Fund in the
name of each record holder of shares of
<PAGE>
Dreyfus Capital Value -5- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
the Dreyfus Capital Value Fund and representing the respective pro rata
number of shares of the Comstock Capital Value Fund due such shareholder.
Fractional shares of the Comstock Capital Value Fund will be carried to
the third decimal place. Simultaneously with such crediting of shares of
the Comstock Capital Value Fund to the shareholders, the shares of the
Dreyfus Capital Value Fund held by such shareholders shall be cancelled.
3. Prior to the Effective Time of the Reorganization, the parties
to the Reorganization will file Articles of Transfer in the State of
Maryland to effect the Reorganization.
4. As soon as practicable after the Effective Time of the
Reorganization, the Dreyfus Capital Value Fund shall take all the
necessary steps under Maryland law and the Dreyfus Capital Value Fund's
Articles of Incorporation, as amended and supplemented, to effect a
complete dissolution of the Dreyfus Capital Value Fund and to deregister
the Dreyfus Capital Value Fund under the Act.
In acting as special counsel to CPF and the Dreyfus Capital Value Fund
with respect to the Reorganization, we have, among other things, reviewed the
following documents:
1. The Reorganization Agreement;
2. The proxy statement of CPF filed with the Securities and Exchange
Commission; and
<PAGE>
Dreyfus Capital Value -6- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
3. CPF's Registration Statement on Form N-14 under the Securities Act
of 1933, as filed with the Securities and Exchange Commission (the
"Registration Statement on Form N-14").
For purposes of this opinion, as hereinafter set forth, we have reviewed
such other documents relating to the Reorganization as we have deemed relevant
under the circumstances and have relied upon representations contained in
certain certificates (the "Certificates") provided to us by the Dreyfus Capital
Value Fund and CPF.
If the Merger is effected on a factual basis different from that
contemplated above, any or all of the opinions expressed herein may be
inapplicable. Further, our opinion is based on (i) the Internal Revenue Code
of 1986, as amended (the "Code"), (ii) Treasury Regulations, (iii) judicial
precedents and (iv) administrative interpretations (including the current
ruling practice of the Internal Revenue Service) as of the date hereof. If
there is any subsequent change in the applicable law or regulations, or if
there are subsequently any new administrative or judicial interpretations of
the law or regulations, any or all of the individual opinions expressed
herein may become inapplicable.
Based on the foregoing, and assuming that the Reorganization is
effected in accordance with the terms of the Reorganization Agreement (and
exhibits thereto) and that the statements set forth in the Certificates are
true as of the
<PAGE>
Dreyfus Capital Value -7- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
Effective Time of the Reorganization, it is our opinion that for federal
income tax purposes:
(i) the Reorganization will constitute a reorganization within the
meaning of section 368(a)(1) of the Code with respect to the Dreyfus
Capital Value Fund and the Comstock Capital Value Fund;
(ii) no gain or loss will be recognized by the Dreyfus Capital Value
Fund or the Comstock Capital Value Fund upon the transfer of all the
assets and liabilities, if any, of the Dreyfus Capital Value Fund to the
Comstock Capital Value Fund solely in exchange for shares of the Comstock
Capital Value Fund or upon the distribution of the shares of the Comstock
Capital Value Fund to the holders of shares of the Dreyfus Capital Value
Fund solely in exchange for all of their shares of the Dreyfus Capital
Value Fund;
(iii) no gain or loss will be recognized by shareholders of the Dreyfus
Capital Value Fund upon the exchange of such shares of the Dreyfus Capital
Value Fund solely for shares of the Comstock Capital Value Fund;
(iv) the holding period and tax basis of the shares of the Comstock
Capital Value Fund received by each holder of shares of the Dreyfus
Capital Value Fund pursuant to the Reorganization will be the same as the
holding period and tax basis of shares of the Dreyfus Capital Value Fund
held by the shareholder (provided the
<PAGE>
Dreyfus Capital Value -8- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
shares of the Dreyfus Capital Value Fund were held as a capital asset
on the date of the Reorganization) immediately prior to the
Reorganization; and
(v) the holding period and tax basis of the assets of the Dreyfus
Capital Value Fund acquired by the Comstock Capital Value Fund will be
the same as the holding period and tax basis of those assets to the
Dreyfus Capital Value Fund immediately prior to the Reorganization.
The payment by the Dreyfus Corporation and Comstock Partners, Inc. of
certain expenses of The Dreyfus Capital Value Fund and CPF which are directly
related to the Reorganization (referred to in section 10 of the
Reorganization Agreement) will not affect the opinions set forth above
regarding the federal income tax consequences of the exchanges by the Dreyfus
Capital Value Fund and the shareholders of the Dreyfus Capital Value Fund.
However, no opinion is expressed as to any other federal income tax
consequences to any of the parties resulting from the payment of such
expenses by The Dreyfus Corporation and Comstock Partners, Inc.
We express our opinion herein only as to those matters specifically set
forth above and such opinion may be relied upon solely by you for the
exclusive purpose of ascertaining the federal income tax consequences of the
Reorganization contemplated in the Reorganization Agreement to
<PAGE>
Dreyfus Capital Value -9- February 12, 1996
Fund, Inc.
Comstock Partners Funds, Inc.
the Dreyfus Capital Value Fund, CPF and the shareholders of the Dreyfus
Capital Value Fund on their receipt of the Comstock Capital Value Fund shares
pursuant to the Reorganization Agreement. We hereby consent to the filing of
this opinion as an exhibit to the Registration Statement on Form N-14 and to
the use of our name therein.
Very truly yours,
/s/ Simpson Thacher & Bartlett
------------------------------
SIMPSON THACHER & BARTLETT
<PAGE>
Exhibit 14(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Financial
Statements and Experts" and to the use of our report on the financial
statements of Dreyfus Capital Value Fund, Inc. dated November 13, 1995,
included in this Registration Statement Form N-14 of Comstock Partners Funds,
Inc.
/s/ Ernst & Young LLP
------------------------
ERNST & YOUNG LLP
New York, New York
February 9, 1996
<PAGE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned, Stanley Salvigsen,
a director of Comstock Partners Funds, Inc. (formerly named Comstock Partners
Strategy Fund, Inc.), a Maryland corporation (hereinafter called the "Company")
does hereby constitute and appoint Charles Minter, Troy Hottenstein and
Robert C. Ringstad, and each of them, his true and lawful attorneys and agents,
with full power to act without the others, for him and in his name, place and
stead, in any and all capacities, to do any and all acts and things, and
execute in his name any and all instruments, which said attorneys and agents
may deem necessary or advisable in order to enable the Company to comply with
the Investment Company Act of 1940, Securities Act of 1933, any requirements
of the Securities and Exchange Commission in respect thereof, and any state
securities laws, in connection with the registration under said Acts of the
aforesaid Company and the offerings of shares by such Company including
specifically power and authority to sign his name to any and all Notifications
of Registration and Registration Statements to be filed with the Securities and
Exchange Commission under either of said Acts in respect to such Company and
shares, and any amendments (including post-effective amendments) or applications
for amendment or supplements of or to such Notifications of Registration and
Registration Statements, and to file the same with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm all that said
attorneys and agents, and each of them, shall do or cause to be done by virtue
hereof. Any one of said agents and attorneys shall have, and may exercise,
without the others, all the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his name hereto as of this
day of February 12, 1996.
/s/ Stanley Salvigsen
-----------------------
Stanley Salvigsen
<PAGE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned, Charles Minter, a
director of Comstock Partners Funds, Inc. (formerly named Comstock Partners
Strategy Fund, Inc.), a Maryland corporation (hereinafter called the "Company")
does hereby constitute and appoint Stanley Salvigsen, Troy Hottenstein and
Robert C. Ringstad, and each of them, his true and lawful attorneys and agents,
with full power to act without the others, for him and in his name, place and
stead, in any and all capacities, to do any and all acts and things, and execute
in his name any and all instruments, which said attorneys and agents may deem
necessary or advisable in order to enable the Company to comply with the
Investment Company Act of 1940, Securities Act of 1933, any requirements of the
Securities and Exchange Commission in respect thereof, and any state securities
laws, in connection with the registration under said Acts of the aforesaid
Company and the offerings of shares by such Company including specifically power
and authority to sign his name to any and all Notifications of Registration and
Registration Statements to be filed with the Securities and Exchange Commission
under either of said Acts in respect to such Company and shares, and any
amendments (including post-effective amendments) or applications for amendment
or supplements of or to such Notifications of Registration and Registration
Statements, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said agents and attorneys shall have, and may exercise, without the
others, all the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his name hereto as of
this day of February 12, 1996.
/s/ Charles Minter
-----------------------
Charles Minter
<PAGE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned, Robert M. Smith, a
director of Comstock Partners Funds, Inc. (formerly named Comstock Partners
Strategy Fund, Inc.), a Maryland corporation (hereinafter called the
"Company") does hereby constitute and appoint Stanley Salvigsen, Charles
Minter, Troy Hottenstein and Robert C. Ringstad, and each of them, his true
and lawful attorneys and agents, with full power to act without the others,
for him and in his name, place and stead, in any and all capacities, to do
any and all acts and things, and execute in his name any and all instruments,
which said attorneys and agents may deem necessary or advisable in order to
enable the Company to comply with the Investment Company Act of 1940,
Securities Act of 1933, any requirements of the Securities and Exchange
Commission in respect thereof, and any state securities laws, in connection
with the registration under said Acts of the aforesaid Company and the
offerings of shares by such Company including specifically power and
authority to sign his name to any and all Notifications of Registration and
Registration Statements to be filed with the Securities and Exchange
Commission under either of said Acts in respect to such Company and shares,
and any amendments (including post-effective amendments) or applications for
amendment or supplements of or to such Notifications of Registration and
Registration Statements, and to file the same with the Securities and
Exchange Commission; and the undersigned does hereby ratify and confirm all
that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof. Any one of said agents and attorneys shall have, and
may exercise, without the others, all the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his name hereto as of
this day of February 12, 1996.
/s/ Robert M. Smith
-----------------------
Robert M. Smith
<PAGE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned, M. Bruce Adelberg,
a director of Comstock Partners Funds, Inc. (formerly named Comstock Partners
Strategy Fund, Inc.), a Maryland corporation (hereinafter called the
"Company") does hereby constitute and appoint Stanley Salvigsen, Charles
Minter, Troy Hottenstein and Robert C. Ringstad, and each of them, his true
and lawful attorneys and agents, with full power to act without the others,
for him and in his name, place and stead, in any and all capacities, to do
any and all acts and things, and execute in his name any and all instruments,
which said attorneys and agents may deem necessary or advisable in order to
enable the Company to comply with the Investment Company Act of 1940,
Securities Act of 1933, any requirements of the Securities and Exchange
Commission in respect thereof, and any state securities laws, in connection
with the registration under said Acts of the aforesaid Company and the
offerings of shares by such Company including specifically power and
authority to sign his name to any and all Notifications of Registration and
Registration Statements to be filed with the Securities and Exchange
Commission under either of said Acts in respect to such Company and shares,
and any amendments (including post-effective amendments) or applications for
amendment or supplements of or to such Notifications of Registration and
Registration Statements, and to file the same with the Securities and
Exchange Commission; and the undersigned does hereby ratify and confirm all
that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof. Any one of said agents and attorneys shall have, and
may exercise, without the others, all the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his name hereto as of
this day of February 12, 1996.
/s/ M. Bruce Adelberg
------------------------
M. Bruce Adelberg
<PAGE>
Exhibit 17(a)
[Preliminary Proxy Material]
DREYFUS CAPITAL VALUE FUND, INC.
This proxy is solicited on behalf of the Board of Directors of Dreyfus Capital
Value Fund, Inc. for the Special Meeting of Shareholders to be held on
__________, 1996.
The undersigned hereby appoints ___________, ___________, and ____________, and
each of them, attorneys and proxies for the undersigned, with full power of
substitution, and revocation to represent the undersigned and to vote on behalf
of the undersigned all shares of Dreyfus Capital Value Fund, Inc. which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held at ___________________________________, on ____________, 1996, at ________,
and at any adjournments thereof. The undersigned hereby acknowledges receipt of
the Notice of the Special Meeting of Shareholders and accompanying
Prospectus/Proxy Statement of Comstock Partners Funds, Inc. 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 business as may
properly come before the Special Meeting of Shareholders. A majority of the
proxies present and acting at the Special Meeting of Shareholders in person or
by substitute (or, if only one shall be so present, then that one) shall have
and may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
Please refer to the Prospectus/Proxy Statement for a discussion of the Proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL.
Proposal to approve the Agreement and Plan of Reorganization.
FOR AGAINST ABSTAIN
/ / / / / /
If no direction is made, this proxy PLEASE INDICATE YOUR VOTE BY AN "X"
will be voted FOR the proposal. IN THE APPROPRIATE BOX HEREON.
THIS PROXY, IF PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED
BY THE SHAREHOLDER.
NOTE: Please sign exactly as your
name appears 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.
Date , 1996
---------------------------
-------------------------------------
-------------------------------------
Signature(s), Title(s) (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
