DREYFUS EDISON ELECTRIC INDEX FUND, INC.
DREYFUS STOCK INDEX FUND
PEOPLES INDEX FUND, INC.
PEOPLES S&P MIDCAP INDEX FUND, INC.
-----------------------------------
NOTICE OF SPECIAL MEETINGS OF STOCKHOLDERS
-----------------------------------
To the Stockholders:
Special Meetings of Stockholders of each of Dreyfus Edison Electric
Index Fund, Inc., Dreyfus Stock Index Fund, Peoples Index Fund, Inc. and
Peoples S&P MidCap Index Fund, Inc. (each, a "Fund" and, collectively, the
"Funds") will be held at the offices of The Dreyfus Corporation, 200 Park
Avenue, 7th Floor West, New York, New York, on Friday, November 3, 1995 at
10:00 a.m., for the following purposes:
1.a. To approve a new Management Agreement between the Fund and The
Dreyfus Corporation.
b. To approve a new Index Management Agreement between The
Dreyfus Corporation and Mellon Equity Associates.
2.To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Stockholders of record at the close of business on September 8, 1995
will be entitled to receive notice of and to vote at the meeting.
By Order of the Board
John E. Pelletier
Secretary
New York, New York
September 1, 1995
----------------------------------------------------------------------------
WE NEED YOUR PROXY VOTE IMMEDIATELY
A STOCKHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT IT IS VITAL.
BY LAW, THE SPECIAL MEETING OF STOCKHOLDERS OF EACH FUND WILL HAVE TO BE
ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM IS
REPRESENTED. IN THAT EVENT, THE AFFECTED FUND WOULD CONTINUE TO SOLICIT
VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE
CRITICAL TO ENABLE THE FUND(S) TO HOLD THE MEETING(S) AS SCHEDULED, SO
PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS
WILL BENEFIT FROM YOUR COOPERATION.
----------------------------------------------------------------------------
DREYFUS EDISON ELECTRIC INDEX FUND, INC.
DREYFUS STOCK INDEX FUND
PEOPLES INDEX FUND, INC.
PEOPLES S&P MIDCAP INDEX FUND, INC.
COMBINED PROXY STATEMENT
--------------------------
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, NOVEMBER 3, 1995
This proxy statement is furnished in connection with a solicitation
of proxies by the Board of each of Dreyfus Edison Electric Index Fund, Inc.
("Edison Electric Index Fund"), Dreyfus Stock Index Fund ("Stock Index
Fund"), Peoples Index Fund, Inc. ("Peoples Index Fund") and Peoples S&P
MidCap Index Fund, Inc. ("Peoples MidCap Index Fund") (each, a "Fund" and
collectively, the "Funds") to be used at the Special Meeting of Stockholders
of each Fund to be held on Friday, November 3, 1995 at 10:00 a.m., at the
offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor West, New
York, New York, for the purposes set forth in the accompanying Notice of
Special Meetings of Stockholders. Stockholders of record at the close of
business on September 8, 1995 are entitled to be present and to vote at the
meeting. Stockholders are entitled to one vote for each Fund share held and
fractional votes for each fractional Fund share held. Stockholders can vote
only on matters affecting the Fund(s) of which they are stockholders. Shares
represented by executed and unrevoked proxies will be voted in accordance
with the specifications made thereon. If any enclosed form of proxy is
executed and returned, it nevertheless may be revoked by another proxy or by
letter or telegram directed to the relevant Fund, which must indicate the
stockholder's name and account number. To be effective, such revocation must
be received prior to the relevant Fund's meeting. In addition, any
stockholder who attends a meeting in person may vote by ballot at the
relevant Fund meeting, thereby canceling any proxy previously given. See
"Voting Information."
As of August 15, 1995, the Funds had outstanding the following
number of shares:
FUND NUMBER OF SHARES OUTSTANDING
Dreyfus Edison Electric Index Fund, Inc. 5,615,943.469
Dreyfus Stock Index Fund 12,929,196.465
Peoples Index Fund, Inc. 18,224,572.183
Peoples S&P MidCap Index Fund, Inc. 6,211,907.246
It is estimated that proxy materials will be mailed to stockholders
of record on or about September 11, 1995. The principal executive offices of
each Fund are located at 200 Park Avenue, New York, New York 10166. COPIES OF
EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE AVAILABLE UPON
REQUEST, WITHOUT CHARGE, BY WRITING TO THE FUND AT 144 GLENN CURTISS
BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR BY CALLING TOLL-FREE
1-800-645-6561.
Stockholders of each Fund will vote as a single class and will vote
separately on each proposal on which stockholders of that Fund are entitled
to vote. If a proposal is approved by stockholders of one Fund and
disapproved by stockholders of any other Fund, the proposal will be
implemented only for the Fund that approved the proposal. Therefore, it is
essential that stockholders who own shares in more than one Fund complete,
date, sign and return EACH proxy card they receive.
Page 1
PROPOSALS 1. A. CONSIDERATION OF A NEW MANAGEMENT AGREEMENT BETWEEN THE
FUND AND THE DREYFUS CORPORATION.
B. CONSIDERATION OF A NEW INDEX MANAGEMENT AGREEMENT BETWEEN
THE DREYFUS CORPORATION AND MELLON EQUITY ASSOCIATES.
INTRODUCTION
In August 1994, The Dreyfus Corporation ("Dreyfus"), each Fund's
administrator and sponsor, merged with a subsidiary of Mellon Bank, N.A.
("Mellon Bank"). As a result of such merger, Dreyfus has direct access to a
comprehensive range of financial products and services provided by Mellon
Bank Corporation ("Mellon") and its subsidiaries. Among these services are
index management services of the type currently being provided to the Funds
by entities unaffiliated with Dreyfus. Prior to the merger, Dreyfus did not
have the ability to provide these services either directly or through
affiliates.
After considering the nature of the services currently provided the
Funds by their existing index managers and by Dreyfus as administrator and
those proposed to be provided by Dreyfus and its affiliates, as well as the
costs to the Funds of such services, each Fund's Board determined to
recommend the adoption of the Proposals set forth below. If the Proposals are
adopted, (i) Dreyfus will serve as each Fund's manager, (ii) Mellon Equity
Associates, an affiliate of Dreyfus, will serve as each Fund's index manager,
and (iii) Boston Safe Deposit and Trust Company ("Boston Safe"), an affiliate
of Dreyfus, will serve as each Fund's custodian. These services will be
provided at a lower contractual rate than the rate to which the Funds
currently are subject.
In addition, Peoples Index Fund and Peoples MidCap Index Fund intend
to operate under the respective names Dreyfus S&P 500 Index Fund and Dreyfus
MidCap Index Fund to more closely identify them with the funds in the Dreyfus
Family of Funds.
At a meeting held on August 9, 1995, each Fund's Board of Directors,
including a majority of the Directors who are not "interested persons" (as
defined in the Investment Company Act of 1940, as amended (the "Act")) of the
Fund (i) approved the entry by the Fund into a new Management Agreement (the
"New Management Agreement") with Dreyfus, (ii) approved the entry by Dreyfus
into a new Index Management Agreement (the "New Index Management Agreement")
with Mellon Equity Associates, (iii) approved the entry by the Fund into a
new Custody Agreement (the "New Custody Agreement") with Boston Safe, and
(iv) directed that the New Management Agreement and the New Index Management
Agreement be submitted to Fund stockholders at this meeting. On the same day,
Dreyfus agreed to terminate its existing Administration Agreement (the
"Existing Administration Agreement") with each Fund, each Fund's Existing
Index Manager (as defined below) agreed to terminate its existing Index
Management Agreement (the "Existing Index Management Agreement") with the
Fund and each Fund's Existing Custodian (as defined below) agreed to
terminate its existing Custody Agreement (the "Existing Custody Agreement")
with the Fund, each subject to and effective upon the approval and implementat
ion of both the New Management Agreement and the New Index Management
Agreement.
The annual fee payable by each Fund pursuant to the New Management
Agreement, the aggregate annual fees currently payable by each Fund pursuant
to the Existing Index Management Agreement, Existing Administration Agreement
and Existing Custody Agreement and the amount by which such fees payable by
each Fund will be reduced if the Proposals are approved, in each case
expressed as a percentage of average daily net assets, are as follows:
<TABLE>
<CAPTION>
EXISTING INDEX AMOUNT BY
MANAGEMENT, WHICH THE
PROPOSED ADMINISTRATION AGGREGATE OF THESE
NAME OF FUND MANAGEMENT FEE AND CUSTODY FEES FEES WILL DECREASE
------------ --------------------- ---------------- ------------------
<S> <C> <C> <C>
Dreyfus Edison Electric Index Fund, Inc. .245% .280% .035%
Dreyfus Stock Index Fund .245% .330% .085%
Peoples Index Fund, Inc. .295% .310% .015%
Peoples S&P MidCap Index Fund, Inc. .395% .440% .045%
</TABLE>
Page 2
If a Fund's stockholders do not approve both the New Management
Agreement and New Index Management Agreement for the Fund, the Fund's Board
will take such action as it may deem to be in the best interests of the Fund's
stockholders.
EXISTING INDEX MANAGERS AND EXISTING INDEX MANAGEMENT AGREEMENTS
Wells Fargo Nikko Investment Advisors ("WFNIA"), located at 45
Fremont Street, San Francisco, California 94105, currently serves as index fund
manager to Edison Electric Index Fund, Stock Index Fund and Peoples Index
Fund pursuant to separate Existing Index Management Agreements dated May 2,
1991, April 4, 1990 and April 4, 1990, respectively. World Asset Management
("WAM" and, together with WFNIA, an "Existing Index Manager"), located at 480
Pierce Street, Birmingham, Michigan 48009, currently serves as index fund
manager to Peoples MidCap Index Fund pursuant to an Existing Index Management
Agreement dated January 1, 1995. The date on which each Existing Index
Management Agreement was last submitted to a vote of stockholders, the rate
of the annual fee (expressed as a percentage of average daily net assets)
payable by each Fund pursuant to its Existing Index Management Agreement and
the amount of fees paid to the Existing Index Manager by the Fund for its
last fiscal year (December 31 for Stock Index Fund and October 31 for each
other Fund) were as follows:
<TABLE>
<CAPTION>
AMOUNT PAID
TO EXISTING
DATE AGREEMENT CURRENT RATE OF INDEX MANAGER
LAST APPROVED ANNUAL INDEX DURING LAST
NAME OF FUND BY STOCKHOLDERS MANAGEMENT FEE FISCAL YEAR
------------ ---------------- --------------- ------------
<S> <C> <C> <C>
Dreyfus Edison Electric Index Fund, Inc. August 12, 1992 .10% $ 88,756
Dreyfus Stock Index Fund August 8, 1991 .15% $ 52,785*
Peoples Index Fund, Inc. August 8, 1991 .10% $244,066**
Peoples S&P MidCap Index Fund, Inc. March 31, 1995 .10% $ -0- ***
--------------------
* $116,361 was payable. This amount was reduced by $63,576 pursuant to
an undertaking by the Existing Index Manager.
** $274,298 was payable. This amount was reduced by $30,232 pursuant to
an undertaking by the Existing Index Manager.
*** $72,970 was payable. This amount was waived in its entirety pursuant
to undertakings by the Existing Index Manager and its predecessor.
</TABLE>
In addition, Wells Fargo Institutional Trust Company, N.A.
("WFITC"), an affiliate of WFNIA, currently serves as the custodian of Edison
Electric Index Fund, Stock Index Fund and Peoples Index Fund. Comerica Bank
(together with WFITC, the "Existing Custodian"), an affiliate of WAM,
currently serves as the custodian of Peoples MidCap Index Fund. The amount of
fees paid by each Fund to its Existing Custodian for the Fund's last fiscal
year and the percentage of average daily net assets of the Fund such amount
represented were as follows:
<TABLE>
<CAPTION>
AMOUNT PAID AS
AMOUNT PAID TO A PERCENTAGE OF
EXISTING CUSTODIAN AVERAGE DAILY
NAME OF FUND DURING LAST FISCAL YEAR NET ASSETS
------------ ----------------------- --------------
<S> <C> <C>
Dreyfus Edison Electric Index Fund, Inc. $ 34,169 .04%
Dreyfus Stock Index Fund $ 22,284 .03%
Peoples Index Fund, Inc. $ 38,774 .01%
Peoples S&P MidCap Index Fund, Inc. $ 27,114 .04%
</TABLE>
THE DREYFUS CORPORATION
Dreyfus, located at 200 Park Avenue, New York, New York 10166,
serves as each Fund's administrator under the Existing Administration
Agreement. Dreyfus is a wholly-owned subsidiary of Mellon Bank, which is a
wholly-owned sub-
Page 3
sidiary of Mellon. As of August 2, 1995, Dreyfus managed or administered
approximately $79 billion in assets for more than 1.8 million investor
accounts nationwide.
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, 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 Dreyfus, Mellon managed more than $200 billion in
assets as of June 30, 1995, including approximately $73 billion in mutual
fund assets. As of June 30, 1995, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or administration
services, for more than $700 billion in assets, including approximately $71
billion in mutual fund assets.
The Chairman of the Board and Chief Executive Officer of Dreyfus is
Howard Stein. Other directors of Dreyfus are Mandell L. Berman, real estate
consultant and private investor, Southfield, Michigan; Frank V. Cahouet,
Chairman of the Board, President and Chief Executive Officer of Mellon,
Pittsburgh Pennsylvania; Stephen E. Canter, Vice Chairman and Chief Investment
Officer of Dreyfus; Alvin E. Friedman, Senior Adviser to Dillon, Read & Co.,
Inc., Investment Bankers, New York, New York; Lawrence M. Greene, former Legal
Consultant to Dreyfus; Lawrence S. Kash, Vice Chairman-Distribution of
Dreyfus; Robert E. Riley, President and Chief Operating Officer of Dreyfus;
Julian M. Smerling, former Vice Chairman of the Board of Directors
of Dreyfus; W. Keith Smith, Vice Chairman of The Board of Directors of
Dreyfus; and Dr. David B. Truman, educational consultant and past President
of Mt. Holyoke College and the Russell Sage Foundation, Hillsdale, New York.
MELLON EQUITY ASSOCIATES
Mellon Equity Associates, located at 500 Grant Street, Pittsburgh,
Pennsylvania 15258, is a registered investment adviser formed in 1987. As of
June 30, 1995, Mellon Equity Associates and its employees managed
approximately $7 billion in assets, including approximately $220 million in
mutual fund assets seeking to replicate a benchmark index.
The directors and executive officers of Mellon Equity Associates
are: Phillip R. Roberts, Chairman of the Board; William P. Rydell, President
and Chief Executive Officer; and W. Keith Smith, director.
NEW MANAGEMENT AGREEMENT
Under the New Management Agreement, Dreyfus will be responsible for
providing (i) the index management services currently provided to each Fund
pursuant to the Existing Index Management Agreement and (ii) the
administrative services currently provided under the Existing Administration
Agreement. Dreyfus will have the right to engage other entities to assist it
in performing such services. Under the New Management Agreement, Dreyfus will
pay for, or arrange for the payment of, the custody services to be provided
to each Fund by Boston Safe.
Under the terms of each New Management Agreement, Dreyfus, subject
to the supervision and approval of the Fund's Board of Directors in
accordance with Maryland law, will manage the Fund's portfolio in accordance
with its investment objective and policies and provide continuous supervision
of the Fund's investment portfolio. In addition, Dreyfus will supply office
facilities (which may be in its own offices), data processing services,
clerical, accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and stationery and
office supplies; prepare reports to the Fund's stockholders, tax returns,
reports to and filings with the Securities and Exchange Commission and state
Blue Sky authorities; calculate the net asset value of the Fund's shares; and
generally assist in all aspects of the Fund's operations. Dreyfus will bear
all expenses in connection with the performance of its services under the New
Management Agreement.
As compensation for Dreyfus' services, each Fund has agreed to pay
Dreyfus a monthly fee at the annual rate (expressed as a percentage of
average daily net assets) set forth below. The fees payable to Dreyfus are
not subject to reduction as the value of the respective Fund's net assets
increase, but may be reduced pursuant to expense limitations in effect.
Page 4
ANNUAL FEE PAYABLE UNDER NEW
NAME OF FUND MANAGEMENT AGREEMENT
------------ ----------------------------
Dreyfus Edison Electric Index Fund, Inc. .245%
Dreyfus Stock Index Fund .245%
Peoples Index Fund, Inc. .295%
Peoples S&P MidCap Index Fund, Inc. .395%
All expenses incurred in the operation of a Fund are borne by the
Fund, except to the extent specifically assumed by Dreyfus or Mellon Equity
Associates, as index manager. Dreyfus will pay for, or arrange for the payment
of, the custody services to be provided to the Fund by Boston Safe. The
expenses borne by each Fund include: organizational costs, taxes, interest,
brokerage fees and commissions, if any, fees of Directors who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of Dreyfus or Mellon Equity Associates or any of their
affiliates, Securities and Exchange Commission fees, state Blue Sky
qualification fees, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside auditing and
legal expenses, costs of independent pricing services, costs of maintaining
corporate existence, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing stockholders, costs of
stockholders' reports and corporate meetings, and any extraordinary expenses.
Each New Management Agreement provides that if in any fiscal year
the aggregate expenses of the Fund (including fees pursuant to the New
Management Agreement, but excluding taxes, brokerage, interest on borrowings
and, with the prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Fund, the Fund may deduct from the fees to
be paid to Dreyfus, or Dreyfus will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as the case may be, on a monthly
basis.
Each New Management Agreement will continue in effect until May 14,
1997, and thereafter shall continue automatically for successive annual
periods ending on May 14th of each year, provided such continuance is
specifically approved at least annually by (i) the Fund's Board of Directors
or (ii) vote of a majority (as defined in the Act) of the Fund's outstanding
voting securities, provided that in either event the continuance also is
approved by a majority of the Directors who are not "interested persons" (as
defined in the Act) of any party to the New Management Agreement, by vote
cast in person at a meeting called for the purpose of voting on such
approval. Each New Management Agreement may be terminated without penalty, on
60 days' notice, by the Fund's Board of Directors or by vote of the holders
of a majority of the Fund's shares, or, upon not less than 90 days' notice,
by Dreyfus. Each New Management Agreement will terminate automatically in the
event of its assignment (as defined in the Act). A copy of the New Management
Agreement in the form being presented for approval, and as approved by the
Board of Directors, is set forth as Exhibit A to this Proxy Statement.
NEW INDEX MANAGEMENT AGREEMENT
Under the terms of the New Index Management Agreement, Mellon Equity
Associates, subject to the supervision and approval of Dreyfus and the Fund's
Board of Directors, will provide investment advisory assistance and the
day-to-day management of the Fund's assets, as well as statistical
information with respect to the assets.
As compensation for Mellon Equity Associates' services to the Fund
under the New Index Management Agreement, Dreyfus has agreed to pay Mellon
Equity Associates a monthly fee at the annual rate of .095 of 1% of the value
of the Fund's average daily net assets for the preceding month. Each New
Index Management Agreement also provides that Mellon Equity Associates pay,
out of its sub-investment advisory fee or other sources available to it, for
custody services to be provided to the Fund by Boston Safe.
The New Index Management Agreement will continue until May 14, 1997,
and thereafter automatically for successive annual periods ending on May 14th
of each year, provided such continuance is specifically approved at least
annually by the Board of Directors or by a majority (as defined in the Act)
of the outstanding voting securities of the Fund, and pro-
Page 5
vided that, in either event, the continuance is also approved by a majority
of Directors who are not "interested persons" of any party to the New Index
Management Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. The New Index Management Agreement may be
terminated without penalty (i) by Dreyfus on 60 days' notice to Mellon Equity
Associates, (ii) by the Fund's Board of Directors or by vote of the holders
of a majority of the Fund's outstanding voting securities on 60 days' notice
to Mellon Equity Associates, or (iii) by Mellon Equity Associates on not less
than 90 days' notice to the Fund and Dreyfus. The New Index Management
Agreement will terminate automatically in the event of its assignment (as
defined in the Act) or upon the termination of the New Management Agreement
for any reason. A copy of the New Index Management Agreement, in the form
being presented for approval, and as approved by the Board of Directors, is
set forth as Exhibit B to this Proxy Statement.
BOARD CONSIDERATIONS
Dreyfus caused the Funds to be organized because it believed the
Dreyfus Family of Funds would be able to offer investors broader investment
choices if one or more index funds were included as investment alternatives.
At that time, Dreyfus did not have the ability to provide index management
services to investment companies. Mellon Equity Associates, which became an
affiliate of Dreyfus after Dreyfus' merger with a subsidiary of Mellon Bank,
has considerable expertise in the index management business. As a result of
the merger, Dreyfus now has the ability to provide index management services
through the use of its affiliate. Since each Fund is part of the Dreyfus
Family of Funds and is identified with the Dreyfus organization, each Fund's
Board believes that having Dreyfus and its affiliates_which are capable of
acting as described herein_serve in the capacities described herein would be
beneficial to Fund stockholders.
Each Fund's Board considered Mellon Equity Associates' expertise and
determined that there would be no diminution in the scope and quality of
index management and other services provided to the Fund by Mellon Equity
Associates under the New Index Management Agreement and by Boston Safe under
the New Custody Agreement. In evaluating Mellon Equity Associates' ability to
provide index management services to the Funds, the Directors of each Fund
received and considered information concerning Mellon Equity Associates'
business organization, financial resources, personnel and other matters.
The Board considered similar information with respect to Boston
Safe's provision of custody services. Each Fund's Board found the annual fee
to be charged the Fund for management, which also would pay for custody
services, to be fair and reasonable in light of the usual and customary
charges made by others for services of the same nature and quality. Each
Fund's Board also considered information which suggested that certain
efficiencies are available where a custodian is affiliated with an entity
providing index management services. The Board took into account the fact
that the services to be provided by Dreyfus, Mellon Equity Associates and
Boston Safe would be provided at a lower contractual rate than the rate to
which the Funds are currently subject.
VOTE REQUIRED AND DIRECTORS' RECOMMENDATION
As to each Fund, approval of these proposals requires the
affirmative vote of (a) 67% of the voting securities present at the meeting,
if the holders of more than 50% of the Fund's outstanding voting securities
are present or represented by proxy, or (b) more than 50% of the Fund's
outstanding voting securities, whichever is less.
EACH FUND'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS
THAT (A) STOCKHOLDERS VOTE "FOR" APPROVAL OF THE NEW MANAGEMENT AGREEMENT
BETWEEN THE FUND AND THE DREYFUS CORPORATION AND (B) STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE NEW INDEX MANAGEMENT AGREEMENT BETWEEN THE DREYFUS
CORPORATION AND MELLON EQUITY ASSOCIATES
Page 6
ADDITIONAL INFORMATION
Premier Mutual Fund Services, Inc. (the "Distributor"), with
principal offices at One Exchange Place, Boston, Massachusetts 02109, serves
as each Fund's distributor. The Distributor's ultimate parent company is
Boston Institutional Group, Inc.
As of August 15, 1995 no officer or Director of the Funds
beneficially owned any shares of a Fund.
VOTING INFORMATION
If a proxy is properly executed and returned accompanied by
instructions to withhold authority to vote, represents a broker "non-vote"
(that is, a proxy from a broker or nominee indicating that such person has
not received instructions from the beneficial owner or other person entitled
to vote shares of a Fund on a particular matter with respect to which the
broker or nominee does not have discretionary power) or marked with an
abstention (collectively, "abstentions"), the Fund's shares represented
thereby will be considered to be present at the meeting for purposes of
determining the existence of a quorum for the transaction of business. Under
Maryland law, abstentions do not constitute a vote "for" or "against" a matter
and will be disregarded in determining the "votes cast" on an issue.
Accordingly, abstentions will have the effect of a "no" vote for purposes of
abstaining the requisite approval of a proposal.
In the event that a quorum is not present at a meeting, or if a
quorum is present but sufficient votes to approve the Proposals are not
received, the persons named as proxies may propose one or more adjournments
of the meeting to permit further solicitation of proxies. In determining
whether to adjourn a meeting, the following factors may be considered: the
nature of the Proposal, the percentage of votes actually cast, the percentage
of negative votes actually cast, the nature of any further solicitation and
the information to be provided to stockholders with respect to the reasons
for the solicitation. Any adjournment will require the affirmative vote of a
majority of those shares affected by the adjournment that are represented at
the meeting in person or by proxy. A stockholder vote may be taken for a
Proposal in this Combined Proxy Statement prior to any adjournment if
sufficient votes have been received for approval. If a quorum is present, the
persons named as proxies will vote those proxies which they are entitled to
vote "FOR" a Proposal in favor of such adjournment, and will vote those
proxies required to be voted "AGAINST" the Proposal against any adjournment.
A quorum is constituted with respect to a Fund by the presence in person or
by proxy of the holders of more than one-third of the Fund's outstanding
shares entitled to vote at the meeting.
The Stock Index Fund is a funding vehicle for variable annuity
contracts and variable life insurance policies offered by the separate
accounts of life insurance companies ("Participating Insurance Companies").
In accordance with current law, the Stock Index Fund anticipates that a
Participating Insurance Company issuing a variable annuity contract or
variable life insurance policy that participates in the Fund will request
voting instructions from policy holders and will vote shares in proportion to
the voting instructions received. For further information on voting rights,
see the prospectus for the variable annuity contract or variable life
insurance policy for information in respect of voting.
Page 7
<TABLE>
<CAPTION>
As of August 15, 1995, the following persons were known by the
relevant Fund to own 5% or more of the Fund's outstanding voting securities:
NAME AND ADDRESS NUMBER PERCENTAGE OF
NAME OF FUND OF STOCKHOLDER OF SHARES SHARES OUTSTANDING
---------------- --------------------------- --------- ------------------
<S> <C> <C> <C>
Dreyfus Edison Electric State Street Bank & Trust Co., As 3,332,677.234 59.343
Index Fund, Inc. TTEE For Pacific Gas & Electric Co.
Savings Fund Plan
P.O. Box 1992
Boston, MA 02105-1992
Dreyfus Stock Index Fund Nationwide Variable Account II 4,654,765.679 36.002
C/O IPO 47
P.O. Box 182029
Columbus, OH 43218-2029
Travelers Fund U 3,393,003.703 26.243
One Tower Square
6 MS Roger Ferland
Hartford, CT 06188
UNUM Life Insurance Company 2,354,504.151 18.210
UNUMTSA Annuity
Mutual Fund Relations Area M279
2211 Congress Street
Portland, ME 04122
Transamerica Occidental Life Insurance Co. 808,176.778 6.250
Separate Account VA-2L
Securities Accounting
1150 S. Olive St. Dept. B-5
Los Angeles, CA 90015-2211
Peoples Index Fund, Inc. Dreyfus Trust Company, TTEE 2,162,869.170 11.867
FDC Incentive Savings Plan
Attn: Trust Officer
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Nationwide Qualified Plans Var A/C 1,737,513.514 9.533
c/o IPO Co 67
P.O. Box 182029
Columbus, OH 43218-2029
Charles Schwab & Co., Inc. 1,524,394.307 8.364
Reinvest Account
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
Peoples S&P MidCap Charles Schwab & Co., Inc. 771,594.747 12.421
Index Fund, Inc. Reinvest Account
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
Mac & Co. 437,422.553 7.041
A/C 682-LOO
Mellon Bank, N.A.
Mutual Funds
P.O. Box 320
Pittsburgh, PA 15230-0320
</TABLE>
A stockholder who beneficially owns, directly or indirectly, more
than 25% of a Fund's voting securities may be deemed a "control person" (as
defined in the Act) of the Fund.
Page 8
OTHER MATTERS
None of the Funds' Boards is aware of any other matters which may
come before the meeting. However, should any such matters with respect to one
or more Funds properly come before the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the proxy in
accordance with their judgment on such matters.
Dreyfus will bear the cost of soliciting proxies from stockholders.
In addition to the use of the mails, proxies may be solicited personally, by
telephone or by telegraph, and each Fund may pay persons holding shares of a
Fund in their names or those of their nominees for their expenses in sending
soliciting materials to their principals.
Unless otherwise required under the Act, ordinarily it will not be
necessary for a Fund to hold annual meetings of stockholders. As a result, a
Fund's stockholders will not consider each year the election of Board members
or the appointment of auditors. However, a Fund's Board will call a meeting
of its stockholders for the purpose of electing Board members if, at any
time, less than a majority of the Board members then holding office have been
elected by stockholders. Under the Act, stockholders of record of not less
than two-thirds of a Fund's outstanding shares may remove Board members of
such Fund through a declaration in writing or by vote cast in person or by
proxy at a meeting called for that purpose. Under each Fund's By-Laws, the
Board members are required to call a meeting of stockholders for the purpose
of voting upon the question of removal of any such Board members when
requested in writing to do so by the stockholders of record of not less than
10% of such Fund's outstanding shares. Stockholders wishing to submit
proposals for inclusion in a Fund's proxy statement for a subsequent
stockholder meeting should send their written submissions to the principal
executive offices of the Fund at 200 Park Avenue, New York, New York 10166,
Attention: General Counsel.
NOTICE TO BANKS, BROKER/DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the appropriate Fund, in care of The Shareholders
Services Group, Inc., a subsidiary of First Data Corporation, Attention:
[NAME OF FUND], P.O. Box 9119, Quincy, Massachusetts 02269-9947, whether
other persons are the beneficial owners of the shares for which proxies are
being solicited from you, and if so, the number of copies of the proxy
statement and other soliciting material you wish to receive in order to supply
copies to the beneficial owners of shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN EACH ENCLOSED PROXY CARD IN THE ENCLOSED STAMPED
----
ENVELOPE.
Dated: September 1, 1995
Page 9
EXHIBIT A
FORM OF
NEW MANAGEMENT AGREEMENT
[NAME OF FUND]
200 PARK AVENUE
NEW YORK, NEW YORK 10166
__________, 1995
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund") herewith confirms
its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting
the same in investments of the type and in accordance with the limitations
specified in its charter documents and in its Prospectus and Statement of
Additional Information as from time to time in effect, copies of which have
been or will be submitted to you, and in such manner and to such extent as
from time to time may be approved by the Fund's Board. The Fund desires to
employ you to act as its manager.
In this connection it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe
to be particularly fitted to assist you in the performance of this Agreement.
Such person or persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons shall be paid by
you and no obligation may be incurred on the Fund's behalf in any such
respect. We have discussed and concur in your employing on this basis Mellon
Equity Associates to act as the Fund's index manager (the "Index Manager") to
provide day-to-day management of the Fund's investments.
Subject to the supervision and approval of the Fund's Board, you
will provide investment management of the Fund's portfolio in accordance with
the Fund's investment objective and policies as stated in its Prospectus and
Statement of Additional Information as from time to time in effect. In
connection therewith, you will supervise the continuous program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Fund's assets conducted by the Index Manager. You will furnish to the Fund suc
h statistical information, with respect to the investments which the Fund may
hold or contemplate purchasing, as the Fund may reasonably request. The Fund
wishes to be informed of important developments materially affecting its
portfolio and shall expect you, on your own initiative, to furnish to the
Fund from time to time such information as you may believe appropriate for
this purpose.
In addition, you will supply office facilities (which may be in your
own offices), data processing services, clerical, accounting and bookkeeping
services, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; prepare reports
to the Fund's stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities; calculate
the net asset value of the Fund's shares; and generally assist in all aspects
of the Fund's operations. You shall have the right, at your expense, to
engage other entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such entity enters
into an agreement with you in form and substance reasonably satisfactory to
the Fund. You agree to be liable for the acts or omissions of each such
entity to the same extent as if you had acted or failed to act under the
circumstances.
You shall exercise your best judgment in rendering the services to
be provided to the Fund hereunder and the Fund agrees as an inducement to
your undertaking the same that neither you nor the Index Manager shall be
liable hereunder for any error
Page A-1
of judgment or mistake of law or for any loss suffered by the Fund, provided
that nothing herein shall be deemed to protect or purport to protect you or
the Index Manager against any liability to the Fund or to its security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder, or
to which the Index Manager would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
under its Index Management Agreement with you or by reason of its reckless
disregard of its obligations and duties under said Agreement.
In consideration of services rendered pursuant to this Agreement,
the Fund will pay you on the first business day of each month a fee at the
annual rate of *1% of the value of the Fund's average daily net assets for the
preceding month. Net asset value shall be computed on such days and at such
time or times as described in the Fund's then-current Prospectus and Statement
of Additional Information. The fee for the period from the date of hereof to
the end of the month hereof shall be pro-rated according to the proportion
which such period bears to the full monthly period, and upon any termination
of this Agreement before the end of any month, the fee for such part of a
month shall be pro-rated according to the proportion which such period bears
to the full monthly period and shall be payable upon the date of termination
of this Agreement.
For the purpose of determining fees payable to you, the value of the
Fund's net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of the Fund's net assets.
You will bear all expenses in connection with the performance of
your services under this Agreement and will pay all fees of the Index Manager
in connection with its duties in respect of the Fund. You will also pay for,
or otherwise arrange for the payment of, the custody services to be provided
to the Fund by Boston Safe Deposit and Trust Company. All other expenses to
be incurred in the operation of the Fund (other than those borne by the Index
Manager) will be borne by the Fund, except to the extent specifically assumed
by you. The expenses to be borne by the Fund include, without limitation, the
following: organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
you or any of your affiliates, Securities and Exchange Commission fees and
state Blue Sky qualification fees, advisory fees, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to
existing stockholders, costs of stockholders' reports and meetings, and any
extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
and, with the prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Fund, the Fund may deduct from the fees to
be paid hereunder, or you will bear, such excess expense to the extent
required by state law. Your obligation pursuant hereto will be limited to the
amount of your fees hereunder. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be, on
a monthly basis.
The Fund understands that you and the Index Manager now act, and
that from time to time hereafter you or the Index Manager may act, as
investment adviser to one or more other investment companies and fiduciary or
other managed accounts, and the Fund has no objection to your and the Index
Manager's so acting, provided that when the purchase or sale of securities of
the same issuer is suitable for the investment objectives of two or more such
companies or accounts which have available funds for investment, the
available securities will be allocated in a manner believed to be equitable
to each company or account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by the Fund or the
size of the position obtainable for or disposed of by the Fund.
-----------------
* Dreyfus Edison Electric Index Fund, Inc. _ .245
Dreyfus Stock Index Fund _ .245
Peoples Index Fund, Inc. (to operate under the name Dreyfus S&P 500 Index
Fund) _ .295
Peoples S&P MidCap Index Fund, Inc. (to operate under the name Dreyfus MidCap
Index Fund)_ .395
Page A-2
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict your right or the right of any of your affiliates to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
Neither you nor the Index Manager shall be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except for a loss resulting
from willful misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement and, in the case of the Index
Manager, for a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under its Index Management
Agreement. Any person, even though also your officer, director, partner,
employee or agent, who may be or become an officer, Board member, employee or
agent of the Fund, shall be deemed, when rendering services to the Fund or
acting on any business of the Fund, to be rendering such services to or
acting solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even though paid by
you.
This Agreement shall continue until May 14, 1997, and thereafter
shall continue automatically for successive annual periods ending on May 14th
of each year, provided such continuance is specifically approved at least
annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of the Fund's outstanding
voting securities, provided that in either event its continuance also is
approved by a majority of the Fund's Board members who are not "interested
persons" (as defined in said Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty, on 60 days' notice,
by the Fund's Board or by vote of holders of a majority of the Fund's shares
or, upon not less than 90 days' notice, by you. This Agreement also will
terminate automatically in the event of its assignment (as defined in said
Act).
The Fund recognizes that from time to time your directors, officers
and employees may serve as directors, trustees, partners, officers and
employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities
may include the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into investment advisory or other
agreements with such other entities. If you cease to act as the Fund's investm
ent adviser, the Fund agrees that, at your request, the Fund will take all
necessary action to change the name of the Fund to a name not including
"Dreyfus" in any form or combination of words.
The Fund is agreeing to the provisions of this Agreement that limit
the Index Manager's liability and other provisions relating to the Index
Manager so as to induce the Index Manager to enter into its Index Management
Agreement with you and to perform its obligations thereunder. The Index
Manager is expressly made a third party beneficiary of this Agreement with
rights as respects the Fund to the same extent as if it had been a party
hereto.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
[NAME OF FUND]
By:__________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
Page A-3
EXHIBIT B
FORM OF
NEW INDEX MANAGEMENT AGREEMENT
THE DREYFUS CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166
____________, 1995
Mellon Equity Associates
500 Grant Street
Pittsburgh, Pennsylvania 15258
Dear Sirs:
As you are aware, [Name of Fund] (the "Fund") desires to employ its
capital by investing and reinvesting the same in investments of the type and
in accordance with the limitations specified in its charter documents and in
its Prospectus and Statement of Additional Information as from time to time
in effect, copies of which have been or will be submitted to you, and in such
manner and to such extent as from time to time may be approved by the Fund's
Board. The Fund employs The Dreyfus Corporation ("Dreyfus") pursuant to a
written agreement (the "Management Agreement"), a copy of which has been
furnished to you. Dreyfus desires to employ you to act as the Fund's index
manager.
In this connection, it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe
to be particularly fitted to assist you in the performance of this Agreement.
Such person or persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons shall be paid by
you and no obligation may be incurred on the Fund's behalf in any such
respect.
Subject to the supervision and approval of Dreyfus, you will provide
investment management of the Fund's portfolio in accordance with the Fund's
investment objective and policies as stated in the Fund's Prospectus and
Statement of Additional Information as from time to time in effect. In
connection therewith, you will supervise the Fund's investments and, if
appropriate, the sale and reinvestment of the Fund's assets. You will furnish
to Dreyfus or the Fund such statistical information, with respect to the
investments which the Fund may hold or contemplate purchasing, as Dreyfus or
the Fund may reasonably request. The Fund and Dreyfus wish to be informed of
important developments materially affecting the Fund's portfolio and shall
expect you, on your own initiative, to furnish to the Fund or Dreyfus from
time to time such information as you may believe appropriate for this
purpose.
You shall exercise your best judgment in rendering the services to
be provided hereunder, and Dreyfus agrees as an inducement to your
undertaking the same that you shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by the Fund or Dreyfus,
provided that nothing herein shall be deemed to protect or purport to protect
you against any liability to Dreyfus, the Fund or the Fund's security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
In consideration of the services rendered pursuant to this
Agreement, Dreyfus will pay you, on the first business day of each month, out
of the management fee it receives from the Fund and only to the extent
thereof, a fee calculated daily and paid monthly at the annual rate of .095
of 1% of the value of the Fund's average daily net assets for the preceding
month.
Page B-1
Net asset value shall be computed on such days and at such time or
times as described in the Fund's then-current Prospectus and Statement of
Additional Information. The fee for the period from the date hereof to the
end of the month hereof shall be pro-rated according to the proportion which
such period bears to the full monthly period, and upon any termination of this
Agreement before the end of any month, the fee for such part of a month shall
be pro-rated according to the proportion which such period bears to the full
monthly period and shall be payable within 10 business days of the date of
termination of this Agreement.
For the purpose of determining fees payable to you, the value of the
Fund's net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of the Fund's net assets.
You will bear all expenses in connection with the performance of
your services under this Agreement. You also will pay, out of your fee to be
received hereunder or from other sources available to you, for the custody
services to be provided to the Fund by Boston Safe Deposit and Trust Company.
All other expenses to be incurred in the operation of the Fund (other than
those borne by Dreyfus) will be borne by the Fund, except to the extent
specifically assumed by you. The expenses to be borne by the Fund include,
without limitation, the following: organizational costs, taxes, interest,
loan commitment fees, interest and distributions paid on securities sold
short, brokerage fees and commissions, if any, fees of Board members who are
not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of you or Dreyfus or any affiliate of you or
Dreyfus, Securities and Exchange Commission fees and state Blue Sky
qualification fees, advisory fees, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees, outside auditing
and legal expenses, costs of independent pricing services, costs of
maintaining the Fund's existence, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing stockholders, costs
of stockholders' reports and meetings, and any extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to the Fund's Management Agreement, but excluding interest,
taxes, brokerage and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses) exceed the expense limitation
of any state having jurisdiction over the Fund, Dreyfus may deduct from the
fees to be paid hereunder, or you will bear such excess expense on a pro-rata
basis with Dreyfus, in the proportion ("Your Proportion") that the index
management fee payable to you pursuant to this Agreement bears to the fee
payable to Dreyfus pursuant to the Management Agreement, to the extent
required by state law. If Dreyfus fails to receive any portion of its fees
under the Management Agreement, for any reason other than Dreyfus' voluntary
waiver of such fees, your fee under this Agreement shall be reduced by Your
Proportion of the amount which Dreyfus shall not have received. If Dreyfus
waives receipt of any portion of its fees under the Management Agreement,
your fee under this Agreement shall be reduced by Your Proportion of the
amount which Dreyfus shall have waived, provided that in no event will any
such waiver reduce the fee to be paid to you hereunder below the annual rate
of .055 of 1% of the value of the Fund's average daily net assets during the
period of such waiver. Dreyfus agrees to notify you in advance of any such
waiver. Your obligations pursuant to this paragraph will be limited to the
amount of your fees hereunder. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be, on
a monthly basis.
Dreyfus understands that you now act, and that from time to time
hereafter you may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and Dreyfus has no
objection to your so acting, provided that when purchase or sale of
securities of the same issuer is suitable for the investment objectives of
two or more companies or accounts managed by you which have available funds
for investment, the available securities will be allocated in a manner
believed by you to be equitable to each company or account. It is recognized
that in some cases this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtainable for or disposed of
by the Fund.
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such services and nothing contained herein shall be deemed to limit
or restrict your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature.
Page B-2
You shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund or Dreyfus in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
your officer, director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any business of the Fund, to be
rendering such services to or acting solely for the Fund and not as your
officer, director, partner, employee, or agent or one under your control or
direction even though paid by you.
This Agreement shall continue until May 14, 1997, and thereafter
shall continue automatically for successive annual periods ending on May 14th
of each year, provided such continuance is specifically approved at least
annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of the Fund's outstanding
voting securities, provided that in either event its continuance also is
approved by a majority of the Fund's Board members who are not "interested
persons" (as defined in said Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty (i) by Dreyfus upon 60
days' notice to you, (ii) by the Fund's Board or by vote of the holders of a
majority of the Fund's shares upon 60 days' notice to you, or (iii) by you
upon not less than 90 days' notice to the Fund and Dreyfus. This Agreement
also will terminate automatically in the event of its assignment (as defined
in said Act). In addition, notwithstanding anything herein to the contrary,
if the Management Agreement terminates for any reason, this Agreement shall
terminate effective upon the date the Management Agreement terminates.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE DREYFUS CORPORATION
By:_________________________
Accepted:
MELLON EQUITY ASSOCIATES
By:__________________________
Page B-3
